On the first Monday morning following a surprise announcement that claimed to end pro golf’s civil war — an announcement in which the PGA Tour announced a planned agreement with the Saudi Arabian Public Investment Fund — a U.S. Senator has opened a probe into the legality of such an agreement.
Senator Richard Blumenthal (D-CT) issued letters to both Jay Monahan and Greg Norman, the respective commissioners of the PGA Tour and LIV Golf, who both spent much of the last 18 months at odds. As of Tuesday morning last week, Monahan’s tour was now set to merge commercial interests with Norman’s tour and that of the DP World Tour, with investment from the Saudi PIF. Blumenthal is chairman of the U.S. Senate’s Permanent Subcommittee on Investigations.
Blumenthal spoke out initially about the deal a day later, issuing a statement that read, “The PGA Tour has spent two years lambasting Saudi sports-washing and paying lip service the integrity of the sport of golf, which will now be used unabashedly by the Kingdom to distract from its many crimes. The PGA Tour has placed a price on human rights and betrayed the long history of sports and athletes that advocate for social change and progress. I will keep a close eye on the structure of this deal and its implications.”
This week Blumenthal has already taken it a step further, requesting documents to be produced from both sides in the next two weeks to analyze the legality of such a partnership.
Here’s how the PGA Tour looked the day after everything changed
“While few details about the agreement are known, PIF’s role as an arm of the Saudi government and PGA Tour’s sudden and drastic reversal of position concerning LIV Golf raise serious questions regarding the reasons for and terms behind the announced agreement,” Blumenthal wrote to both.
“PGA Tour’s agreement with PIF regarding LIV Golf raises concerns about the Saudi government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution,” he later continued. “PIF has announced that it intends to use investments in sports to further the Saudi government’s strategic objectives.”
Each request from Blumenthal outlines a deadline of June 26, and asks for any and all documents and communications that could involve the agreement, LIV Golf, the PGA Tour, and of their subsidiaries and the PIF. That includes organizational charts of each tour as well as any proposed org. charts of the new, for-profit entity. It also includes any messaging or documents on behalf of the PGA Tour regarding its intention to remain a tax-exempt non-profit while creating the separate, for-profit company.
Last week’s announcement came with massive shock to PGA Tour players and also skepticism from various corners of the antitrust world that such a deal would be legal.
For starters, LIV Golf and the PGA Tour were embroiled in an antitrust lawsuit and also a tortious interference countersuit, both of which were moving slowly through discovery. The “framework agreement”, as it has been discussed by Monahan, dropped all pending litigation between the tours. Is it legal for a brand accused of being a monopoly to suddenly merge business interests with its most significant competition? That’s certainly among the questions Blumenthal’s subcommittee will be investigating.
