Two top PGA Tour officials plan to tell US lawmakers that Saudi Arabia would have little sway over the golf business if a proposed merger with LIV Golf goes through.
(Bloomberg) — Two top PGA Tour officials plan to tell US lawmakers that Saudi Arabia would have little sway over the golf business if a proposed merger with LIV Golf goes through.
The Senate Permanent Subcommittee on Investigations is holding a hearing on Tuesday that’s expected to explore what the PGA Tour-LIV combination would mean for the sport and for Saudi Arabia’s influence in the US.
Ron Price, PGA Tour’s chief operating officer, and Jimmy Dunne, a PGA Tour policy board member who helped negotiate the deal, will defend the pact by saying Saudi Arabia’s Public Investment Fund, LIV’s biggest backer, will be only a minority investor in the combined enterprise and that the US Tour will drive the future of the pro golf business, according to a person familiar with the PGA’s thinking.
The officials will assure lawmakers that PGA Tour has non-negotiable terms in its agreement that give it control of the combined entity, said the person, who declined to be identified discussing confidential strategy.
The announcement that the rivals would merge came as a surprise inside golf and to the world beyond the links. The two organizations had been warring in court and in public, with the PGA Tour accusing LIV of using sports to steer attention away from Saudi Arabia’s human-rights record.
Read more: PGA-LIV Filing Shows Undecided Nature of Historic Merger
The deal is a long way from completion — the two sides haven’t agreed to final financial terms, and it will have to get approval from regulators. The potential union has drawn skepticism from players as well as from antitrust experts and politicians in the US.
Lawmakers are likely to grill the PGA Tour officials on what led to the sudden decision to combine after months and months of acrimony. The merger, announced on June 6, was agreed to after a series of face-to-face meetings between PGA and LIV officials in the US and Europe.
“I hope we’re going to uncover a number of the key facts about what led to this total reversal and apparent sellout as many people have described it,” Senator Richard Blumenthal, the Connecticut Democrat who heads the investigations committee, told reporters Monday. “Leaving a feeling of betrayal among fans, sponsors, athletes, and the 9/11 families who stood by the PGA Tour.”
Skeptical Audience
Even before the merger deal was struck, lawmakers were vocal about their opposition to LIV Golf and even tried putting curbs on the upstart circuit, citing concern about its Saudi backing.
However, none of LIV’s top executives, or any officers from the Saudi Public Investment Fund, will be questioned Tuesday. Top LIV officials, including former golf pro Greg Norman and Yasir Al-Rumayyan, the head of the Saudi sovereign-wealth fund, won’t appear at the hearing.
Blumenthal said none of the documents the PGA Tour has provided about the merger indicate what the PIF is going to invest or the kind of control it’ll have.
“They may deny that there’s control on paper, but the agreement so far is filled with holes and gaps,” he said.
Representatives for LIV and PIF didn’t immediately respond to a request for comment on why the officials can’t attend.
Price, the PGA Tour operations chief, said in an op-ed in the Athletic on Monday the deal will ensure that the US-based group will continue to set the pace for pro golf.
“For two years, the question has been, who would lead professional golf forward? The answer provided by this work toward a definitive agreement is now clear: the PGA Tour,” he wrote. The PGA Tour will gain much-needed resources to improve the sport that will benefit golfers and fans, he added.
Price is filling in at the hearing for PGA Tour commissioner Jay Monahan, who has been on medical leave since last month. He is expected to return to his role on July 17.
Antitrust Concerns
In a nearly yearlong antitrust court feud between the PGA and LIV, the US Tour argued that LIV Golf lured its players away with “astronomical sums of money” in an effort to use the players “and the game of golf to sportswash the recent history of Saudi atrocities.”
Phil Mickelson and 10 other golfers sued the PGA Tour in August last year after they had been suspended for signing LIV contracts. LIV later took over the suit. The legal dispute was ended as part of the merger deal.
Still, the antitrust arguments raised in LIV’s lawsuit are likely to be explored by regulators as they consider whether to bless the merger. The Justice Department has been investigating the PGA Tour and LIV dispute since last summer, interviewing several golfers who had been suspended by the Tour for signing on with LIV.
Read more: Surprise LIV Golf-PGA Marriage Risks Antitrust Scrutiny
PGA and LIV notified the Justice Department of their merger plans after the deal was struck but before it was announced, according to a person familiar with the discussions.
The tours reached a five-page provisional agreement, shared with the Senate panel ahead of the hearing, but have yet to finalize the terms. The temporary agreement will end Dec. 31 if they haven’t agreed on definitive financial terms.
The provisional deal doesn’t contain precise valuations for the circuits’ assets, or details on how much the Saudi fund plans to invest, how players will be paid, or any changes to deals and commercial rights for sponsors and others that do business with the leagues.
The Justice Department is likely to focus on player compensation and changes to any sponsorships, antitrust experts said after the deal was announced. An agency spokesman declined to comment on Monday.
–With assistance from Jarrell Dillard.
(Updates with Blumenthal comment, in eighth paragraph.)
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