Sen. Richard Blumenthal (D-CT) has opened an investigation into the PGA Tour's proposed deal with Saudi Arabia's Public Investment Fund announced last Tuesday. Blumenthal, chairman of the Permanent Subcommittee on Investigations (PSI), has requested documentation from the PGA Tour and its commissioner, Jay Monahan, to determine the legality of the organizations coming together to control the game of professional golf.
"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 in his request.
The deal struck between the PGA Tour and the PIF, the financial backers of LIV Golf, put an end to all litigation between the two parties. The PGA Tour was reportedly $50 million in the hole with legal fees, and the agreement quickly provided relief from such spending. This comes at a time when the U.S. Department of Justice was already investigating the PGA Tour for its antitrust practices.
"We are confident that once Congress learns more about how the PGA Tour will control this new venture, they will understand the opportunities this will create for our players, our communities and our sport, all while protecting an American golf institution," the Tour said in a statement.
Blumenthal is seeking to review the following documentation:
- Records relating to the relationship between the PGA Tour and LIV Golf not limited to the agreement
- Records relating to the relationship between the PGA Tour and Saudi Arabia's PIF, including communication between any representatives
- Records relating to the new agreement and all records related to the "new, collectively owned, for-profit entity"
- Communication between PGA Tour commissioner, PGA Tour Board of Directors, PGA Tour Player Advisory Council and/or PGA Tour executive leadership concerning LIV Golf
- Records relating to any dispute between PGA Tour and PIF, LIV Golf, Jay Monahan or Yasir Al-Rumayyan
- Records relating to PGA Tour's tax-exempt status under 510(c)(6) of the Internal Revenue Code
- Records produced in response to any investigation by law enforcement regarding the agreement, PGA Tour's communication with LIV Golf or PIF and PGA Tour's tax-exempt status
- Organizational charts and those made for the new entity
Many legal experts have cited the 1914 Clayton Act as a potential speed bump this deal will need to roll through. The Clayton Act aims to regulate business practices and prohibits anticompetitive mergers and acquisitions. That makes Monahan's remarks at the Canadian Open all the more head scratching.
"I felt very good about the changes we've made and the position that we were in, but ultimately, to take the competitor off of the board -- to have them exist as a partner, not an owner -- and for us to be able to control the direction going forward," Monahan told reporters Tuesday.
Where this deal goes from here remains to be seen. It will take some time for the PGA Tour to get this approved by its policy board, only to then have to deal with additional scrutiny from lawmakers. The terms of the agreement remain undeveloped at best, and the devil will surely lie in the details.
"The PGA Tour has spent two years lambasting Saudi sports-washing and paying lip service [to] the integrity of the sport of golf, which will now be used unabashedly by the Kingdom to distract from its many crimes," Blumenthal said in a statement soon after the announcement of the deal last week. "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."
