LOS ANGELES — Three days before a US Senate subcommittee opened an investigation into the PGA Tour’s planned alliance with Saudi Arabia’s Public Investment Fund and DP World Tour, PGA Tour commissioner Jay Monahan told US senators in a letter that the federal government’s inaction for an action that may have caused it. agreeing to the controversial partnership.
“While we are grateful for the written statements of support we have received from each other [congressional] Members, we are largely left alone to fend off attacks, ostensibly due to the United States’ complex geopolitical alliance with Saudi Arabia. Litigation and the existence of the PGA Tour under threat.”
On June 6, the PGA Tour announced that it was forming a new entity with Saudi Arabia’s sovereign wealth fund (PIF) and the DP World Tour. The Governor of the Public Investment Fund, Yasser Al-Rumayyan, will serve as Chairman of the Board of Directors of the new company. Monahan will be CEO. The PGA Tour will continue to operate on its own, though Al-Rumayyan will join the Tour’s policy board.
“After a divisive two-year battle including the intense tie that divided our great sport, we have decided on an arrangement that will end the division and grow the sport of golf, while preserving the PGA Tour as the primary organizing entity for men’s professional golf tournaments,” Monahan wrote. From numerous reports, this arrangement is not an amalgamation of the PGA Tour, LIV Golf and PIF.”
Monahan described the new company as a subsidiary of the PGA Tour, whereby the tour would at all times occupy a majority of the board seats and would be in control of this new company, regardless of the size of the PIF’s investments. The PIF will be a minority investor in the new entity, Monahan said, “while the PGA will be the majority equity investor.”
“The PIF is intrinsically invested in the PGA Tour because it invests in other US-based companies,” Monahan wrote in the letter, which was first obtained by Politico. “The PGA Tour and its tournaments will continue to operate as they do today, creating a charitable and economic impact in the communities in which they are played.”
On Monday, Connecticut Sen. Richard Blumenthal sent a letter to Monahan and LIV Golf CEO and Commissioner Greg Norman, informing them that the US Senate Permanent Subcommittee on Investigations had opened a review of the planned alliance. PIF funds LIV Golf, which has lured several former grand champions, including Phil Mickelson and Dustin Johnson, away from the PGA Tour with guaranteed contracts worth up to $200 million.
“The PGA Tour agreement with PIF regarding LIV Golf raises concerns about the role of the Saudi government in influencing this effort and the risks posed by a foreign government entity taking control of a cherished American institution,” Blumenthal wrote in his letters to Monahan and Norman. “The Public Investment Fund announced that it intends to use investments in sports to advance the strategic goals of the Saudi government.”
Blumenthal also questioned whether the PGA Tour could continue to operate as a tax-exempt non-profit organization due to its association with the Saudis.
The US Department of Justice opened an investigation into the PGA Tour’s alleged monopolistic business practices last year.
The planned partnership will end legal actions the golf courses have against one another, according to a press release announcing the deal.
Contacted by ESPN, antitrust lawyers and experts said they believe the DOJ will also closely study the PGA Tour’s planned alliance structure with the PIF and DP World Tour.
“Instead of a foreign-funded entity taking over the management of an American sport,” Monahan wrote, “the end result is that the PIF has agreed to operate within the existing golf ecosystem as a minority investor with full control of the PGA Tour.” “The PGA Tour is, and will continue to be, an American institution dedicated to players and generating charity in the communities in which we play.”