PGA Tour-LIV alliance faces government scrutiny

PGA Tour-LIV alliance faces government scrutiny

LOS ANGELES — The U.S. Senate’s Permanent Subcommittee on Investigations has opened a review of the PGA Tour’s planned alliance with the DP World Tour and Saudi Arabia’s Public Investment Fund.

Sen. Richard Blumenthal (D-Conn.), chairman of the subcommittee, notified PGA Tour commissioner Jay Monahan of the inquiry in a letter Monday. The PGA Tour, DP World Tour and Saudi Arabia’s sovereign wealth fund (PIF) announced on Tuesday that they’re forming a new for-profit entity that will combine their commercial businesses, including the LIV Golf League, which PIF is funding.

Blumenthal sent a nearly identical letter to LIV Golf CEO and commissioner Greg Norman on Monday.

“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 a letter to Monahan.

Blumenthal noted that PIF, with assets of more than $700 billion, was created by the Saudi Arabian monarchy and operated by a board under the guidance of Crown Prince Mohammad bin Salman. PIF governor Yasir Al-Rumayyan, who will serve as chairman of the new golf entity, is one of Bin Salman’s close friends and confidants.

“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,” Blumenthal wrote. “PIF has announced that it intends to use investments in sports to further the Saudi government’s strategic objectives.”

Blumenthal and other politicians have criticized the Saudis’ billion-dollar investments into sports, including Formula 1, England’s Premier League and professional golf, as a form of “sportswashing” to soften the country’s image around the world, given the monarchy’s history of human rights abuses and its role in the murder of Washington Post journalist Jamal Khashoggi in 2018.

“[P]rior to this agreement, PGA Tour was one of the loudest critics of LIV Golf’s affiliation with Saudi Arabia,” Blumenthal wrote.

The PGA Tour has said the new agreement with PIF would not affect its operations. The tour said it would continue to operate as a tax-exempt nonprofit and would control its scheduling, sanctioning of events, rules and competition. Blumenthal told Monahan that the tour’s alliance with the Saudis might put its tax-exempt status at risk.

“This assertion raises additional questions about the terms of the agreement and whether a foreign government may indirectly benefit from provisions in U.S. tax laws meant to promote not-for-profit business associations,” Blumenthal wrote.

In the letters to Monahan and Norman, Blumenthal requested myriad documents and communication related to the relationship between the PGA Tour, LIV Golf and PIF; a copy of the agreement and any plans for the new entity; Monahan’s communication with others “concerning risks to PGA Tour posed by LIV Golf, ownership of LIV Golf, and Saudi Arabia’s influence on LIV Golf;” those related to any dispute between the PGA Tour and PIF, LIV Golf, Monahan or Al-Rumayyan; records relating to the Tour’s tax-exempt status; documents produced by the Tour in response to any inquiry or investigation by law enforcement or a regulatory agency; and the tour’s and new entity’s organizational charts.

The PGA Tour and the LIV Golf League have until June 26 to produce the documents to the subcommittee, according to the letter.

Shortly after the stunning deal was announced Tuesday, Blumenthal said in a statement: “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. 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.”

Sen. Elizabeth Warren (D-Mass.) also expressed concerns about the proposed alliance and said she’ll be watching its structure closely. In a statement to Time, Warren said the PGA was “selling out to the Saudi regime to draw attention from its atrocious human rights record with a new golf monopoly.”

The U.S. Department of Justice is also conducting an investigation into the PGA Tour’s alleged monopolistic behavior. The investigation was launched after 11 LIV Golf players filed a federal antitrust case against the PGA Tour. The new alliance ends all court proceedings between the PGA Tour and PIF, according to a news release announcing the deal.

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