Sens. Elizabeth Warren (D-MA) and Ron Wyden (D-OR) sent a letter Tuesday to Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter pleading them to further inspect the PGA Tour's deal with Saudi Arabia's Public Investment Fund to house commercial operations under a new entity.
In the letter, which was obtained by ESPN, Warren and Wyden wrote the deal would "enable the Saudi government's efforts to 'sports wash' its egregious human rights record" and "raises an array of potential legal and regulatory issues, including relating to the PGA Tour's non-profit tax status and antitrust law."
The senators argued the proposed deal violates the Clayton Act, which aims to regulate business practices and prohibits anticompetitive mergers and acquisitions, as well as the Sherman Antitrust Act, which prohibits actions to limit interstate commerce and competition in a marketplace.
"A merger also would give the newly formed entity monopsony power over golfers," Warren and Wyden wrote. "When LIV was still a threat to the PGA Tour's dominant position over golf tournaments in the United States, the two were in fierce competition for golfers and offered increasingly higher tournament prizes as a result. This merger-to-monopoly intentionally eliminates LIV as a potential competitor and would likely cause the new entity to reverse the pattern of newly increased tournament prizes for its golfers."
The Federal Trade Commission continues to hold an aggressive stance against mergers and acquisitions. Deals to fall through at the hands of the Department of Justice and FTC include: Lockheed Martin's acquisition of Aerojet, Penguin Random's House takeover of Smith & Schuster and most recently the merger between American Airlines and JetBlue last month.
Meanwhile, PGA Tour commissioner Jay Monahan sent a letter to congressional members last week claiming the Tour was "left on our own" to combat the growing influence of Saudi Arabia's PIF in professional golf before the sides agreed to join forces under a new single, for-profit entity.
In a June 9 letter obtained by the Associated Press, Monahan wrote that the United States' "complex geopolitical relations with the Kingdom of Saudi Arabia" curbed external assistance the Tour sought from congressional members in fending off PIF golf operations (LIV Golf), putting the Tour at risk of "another decade of expensive and distracting litigation" and threatening its long-term existence.
Earlier this week, Sen. Richard Blumenthal (D-CT) opened an investigation into the deal. Blumenthal, chairman of the Permanent Subcommittee on Investigations (PSI), is evaluating whether the two sides can legally come together in the deal. He cited the Tour's "drastic reversal" on its stance against the PIF as raising "serious questions regarding the reasons for and terms behind the announced agreement."
The PGA Tour has backtracked ever so slightly since announcing the deal last Tuesday; the league even removed the terminology "merge" from the initial press release. Still, what has been written and what has been said is already out there for members of Congress to scrutinize.
"During this intense battle, we met with several Members of Congress and policy experts to discuss the PIF's attempt to take over the game of golf in the United States, and suggested ways that Congress could support us in these efforts," Monahan wrote in the letter to lawmakers.
"While we are grateful for the written declarations of support we received from certain members, we were largely left on our own to fend off the attacks, ostensibly due to the United States' complex geopolitical alliance with the Kingdom of Saudi Arabia. This left the very real prospect of another decade of expensive and distracting litigation and the PGA TOUR's long-term existence under threat."
