LOS ANGELES — The U.S. Department of Justice has opened a review of the PGA Tour’s planned alliance with the DP World Tour and Saudi Arabia’s Public Investment Fund, according to a report Thursday by The Wall Street Journal.
The news comes one day after U.S. Sens. Elizabeth Warren (D-Mass.) and Ron Wyden of (D-Ore.) urged U.S. Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter to scrutinize the deal and take action if it violates federal antitrust laws.
The Wall Street Journal reported that a senior PGA Tour official notified employees this week that the outcome of the deal “likely won’t be known for at least a year,” and that a regulatory review could take longer than that.
“We are confident that once all stakeholders learn more about how the PGA Tour will lead this new venture, they will understand how it benefits our players, fans, and sport while protecting the American institution of golf,” the PGA Tour said in a statement.
Wyden, chairman of the U.S. Senate Finance Committee, also notified PGA Tour executives Thursday that his committee is opening a wide-ranging investigation.
Wyden is seeking clarification of the framework of the deal, including financial and leadership structure; evidence of the PGA Tour’s compliance as a 501(c)(6) tax-exempt organization; an explanation of Ed Herlihy’s “simultaneous roles as chairman of the PGA Tour Board of Directors and a partner/co-chair of Wachtell Lipton, the law firm reportedly representing the PGA Tour in the deal; and an assessment of the deal’s implications for “national security, data privacy and censorship of individuals involved in the Tour.”
In a letter to PGA Tour commissioner Jay Monahan and other executives, Wyden wrote he had “serious questions about any compensation arrangements, formal or informal, proposed as part of this merger framework intended to personally and financially benefit the already lavishly compensated officers and employees of the PGA Tour.”
Wyden noted the PGA Tour’s most recent tax forms reported that Monahan earned nearly $14 million in 2021. The tour and affiliated organizations paid 19 officers and employees more than $1 million annually and spent more than $63 million in salaries for “top staff,” according to Wyden.
“In addition, IRS filings and public reporting indicate that Commissioner Monahan and other Tour officials make extensive personal use of the PGA [Tour]-owned jet for trips in the United States and abroad,” Wyden’s letter said. “It is difficult to rationalize how any further increases in compensation to Tour executives would be in the best interest of the PGA Tour or further the Tour’s tax-exempt purpose.”
Justice Department officials were already scrutinizing the PGA Tour’s alleged monopolistic practices, which were outlined in a federal antitrust lawsuit filed by 11 LIV Golf League players in August. They accused the PGA Tour of using its monopoly powers to quash competition and discourage vendors, media companies and others from working with the new circuit being financed by Saudi Arabia’s sovereign wealth fund.
In a letter to Garland and Kanter, Warren and Wyden wrote that the “PGA-LIV deal would make a U.S. organization complicit — and force American golfers and their fans to join this complicity — in the Saudi regime’s latest attempt to sanitize its abuses by pouring funds into major sports leagues.”
Sen. Richard Blumenthal (D-Conn.), chairman of the U.S. Senate’s Permanent Subcommittee on Investigations, notified Monahan and LIV Golf CEO and commissioner Greg Norman on Monday that his subcommittee had opened an inquiry into the planned alliance.
“I am a former U.S. attorney, a federal prosecutor, and state attorney general who has enforced antitrust law, and I think there’s a clear case to be investigated — and very likely made — here about antitrust violation,” Blumenthal told ESPN on Wednesday. “Remember, we’re having two major entities, comparable to Ford and GM becoming one? An end to competition? That’s a classic violation of the competitive protection laws in this country, so I think an investigation is well warranted.”