Federal Investigation Launched into the PGA Tour and LIV Golf Deal

The PGA Tour’s plan to establish a new professional golf entity in collaboration with Saudi Arabia-backed LIV Golf is facing significant scrutiny from lawmakers on Capitol Hill.

Earlier this month, the PGA Tour surprised everyone by announcing its partnership with LIV Golf’s parent organization, the Saudi Arabian Public Investment Fund (PIF). The aim of this collaboration is to create a for-profit golfing league, with the PIF providing a confidential capital investment from its $620 billion wealth fund. However, concerns have been raised that this Saudi funding is an attempt to enhance the Gulf nation’s global public image, despite being notorious for its human rights abuses.

Lawmakers have launched investigations into the proposed deal, with at least three expressing concerns. One legal concern is that the deal may violate federal antitrust laws by creating a monopoly in the world of organized golf, where the most talented golfers would exclusively compete.

“A merger would effectively give the newly formed entity monopoly power over golfers,” wrote Democratic Senators Elizabeth Warren and Ron Wyden in a letter to Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter.

Lawmakers are also concerned about the optics of hosting tournaments on U.S. soil funded by Saudi Arabia, a country with a dismal human rights record.

“We are confident that once all stakeholders learn more about how the PGA TOUR will lead this new venture, they will understand how it benefits our players, fans, and sport while protecting the American institution of golf,” said the league in a statement responding to the concerns.

Dismal human rights record

Senators Wyden, Blumenthal, and others have pointed out Saudi Arabia’s alarming record of human rights violations, including the arbitrary detention and torture of individuals, as reported by Amnesty International.

Human rights activists and those supporting 9/11 families have criticized the PGA Tour for partnering with LIV Golf, accusing them of assisting Saudi Arabia in “sportswashing” its human rights abuses.

Wyden, who chairs the Senate Finance Committee, mentioned that the PGA Tour’s tax-exempt status in the U.S. may be in jeopardy due to their association with the authoritarian regime.

Senator Wyden has initiated an investigation to gather more information about the financial and leadership structure of the for-profit entity resulting from the deal. Senator Richard Blumenthal has also expressed interest in obtaining similar details about the new entity.

“Not a merger”

The PGA Tour and PIF’s plan came as a surprise to the golfing world, especially since both organizations were involved in an ongoing antitrust lawsuit prior to the announcement. Although they initially presented the plan as a merger, PGA Tour Commissioner Jay Monahan clarified in a letter to lawmakers that it is not a merger.

Regardless of whether it is a merger or not, this deal brings together two major competitors. LIV Golf had caused divisions within professional golf when it offered multi-million-dollar salaries to attract PGA Tour players. In response, the PGA Tour banned its players from participating in LIV tournaments, leading to a bitter rivalry between the two camps. The new arrangement aims to replace this rivalry with a dominant league.

“The PGA Tour boldly presented the deal as an agreement to ‘merge commercial operations under common ownership’,” wrote Senators Warren and Wyden in their letter to the Department of Justice. “Even though the PGA Tour has since attempted to backtrack by removing the word ‘merge’ from their press release, the impacts of the deal cannot be erased. It would result in a monopoly over professional golf operations in the U.S. and potentially worldwide.”

The Department of Justice has informed the PGA Tour that they are also investigating the deal, according to the Wall Street Journal.