Last month’s announcement that the PGA Tour and Saudi Araibia-backed rival LIV Golf plan to merge rocked the sports world.
Now Congress is getting involved. A key Senate subcomittee is holding a hearing next week to learn more about the proposed merger of the two golf giants and the European Tour and the finances behind it – particularly with many details of the deal still yet to be released.
The launch of LIV Golf tore the golf world apart, with the PGA Tour declaring that players who joined the rival league could no longer compete in its events. But the merger agreement last month ended the competition, which not only played out on golf courses, but also in courtrooms – and the court of public opinion.
Now the Senate’s Permanent Subcommittee on Investigations is holding a hearing Tuesday to probe the proposed merger.
“The hearing will hopefully give the PGA an opportunity to describe the challenges they face in managing professional golf and coexisting with LIV,” Wisconsin Sen. Ron Johnson, the subcommittee’s ranking member, said in a statement.
Lawmakers are focused on the role of Saudi Arabia’s Public Investment Fund, which supported LIV Golf as a direct investor, in the newly merged venture.
Ahead of the hearing, the subcommittee’s chairman Sen. Richard Blumenthal, D-Conn., cited critics who charge that Saudi Arabia is investing in sports to soften the country’s image amid accusations of human rights abuses at home and abroad.
“Prior to this agreement, PGA Tour was one of the loudest critics of LIV Golf’s affiliation with Saudi Arabia,” Blumenthal wrote in a letter to PGA Tour Commissioner Jay Monahan.
In the letter, Blumenthal said the hearing would explore “the risks associated with a foreign government’s investment in American cultural institutions and the implications of this planned agreement on professional golf in the United States going forward,” among other issues, including whether or not the PGA Tour should retain its tax-exempt status after the deal goes through.
“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.
The subcommittee’s hearing is expected to be closely watched, but the investigation is already facing obstacles as the head of the Saudi Investment Fund refuses to testify voluntarily. LIV Golf is also declining to have its commissioner Greg Norman, one of the world’s great golfers, testify on its behalf.
