U.S. Senate opens investigation into partnership between PGA Tour and Saudi Arabia
The United States Senate has opened a probe into the proposed partnership between the PGA Tour and Saudi Arabia’s Public Investment Fund (PIF).
In a letter to PGA Tour commissioner Jay Monahan, Connecticut Senator Richard Blumenthal of the Permanent Subcommittee on Investigations asked for records and communications between the tour and the PIF. According to Blumenthal, the deal “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.” The alliance could be reviewed by the Committee on Foreign Investment in the United States, which analyzes mergers regarding potential threats to the nation’s security.
“While few details about the agreement are known, PIF’s role as an arm of the Saudi government and the PGA Tour’s sudden and drastic reversal of position concerning LIV Golf raise serious questions regarding the reasons for and the terms behind the announcement agreement,” Blumenthal wrote.
Last week the PGA Tour and PIF, along with the DP World Tour, announced “a landmark agreement to unify the game of golf, on a global basis.” The move came on the one-year anniversary of the formal launch of LIV Golf in London, and 10 months after 11 LIV Golf members filed an antitrust lawsuit against the PGA Tour. The PGA Tour, DP World Tour and LIV Golf announced they will mutually end all pending litigation between the entities. Additionally, the organizations will work cooperatively to allow a process for any LIV players to reapply for PGA Tour and DP World Tour membership following the 2023 season.
However, the tour remains involved in a probe by the Justice Department that was spurred by the advent of LIV Golf. The DOJ investigation has also spread to include other golf entities, including Augusta National Golf Club, the PGA of America and the USGA, which is hosting this week’s U.S. Open.
Blumenthal has threatened to strip the tour’s tax-exempt status over the Saudi deal, although the proposed partnership between the tour and PIF would be a for-profit entity. Blumenthal is also not the only government official to raise questions about the agreement. Following last Tuesday’s announcement Senator Chris Murphy (D-Conn.) weighed in by tweeting, “So weird. PGA officials were in my office just months ago talking about how the Saudis' human rights record should disqualify them from having a stake in a major American sport. I guess maybe their concerns weren't really about human rights?”
This is not the first time the PGA Tour has faced government scrutiny. In the early 1990s, the Federal Trade Commission concluded a four-year investigation into whether the tour violated antitrust laws—partially due to a rule stipulating permission for a conflicting-event release, which the tour has invoked this year to suspend those who have defected to LIV Golf. At the time, the FTC recommended federal action, but none was ultimately taken, a circumstance credited to the work of then-PGA Tour Commissioner Tim Finchem (a lawyer himself who worked in President Jimmy Carter’s administration) and the tour’s lobbying mastery. Coincidentally, this clashed with LIV Golf CEO Greg Norman’s first try to challenge the PGA Tour through his attempt to launch the World Tour.