LOS ANGELES — Two US senators are urging Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter to scrutinize the PGA Tour’s planned alliance with DP World and Saudi Arabia’s Public Investment Fund and to oppose the deal if it reduces competition in violation of federal law. Antitrust laws.
In a letter sent to Garland and Kanter on Tuesday, obtained by ESPN, Sens. Elizabeth Warren of Massachusetts and Ron Wyden wrote that, although the details of the proposed alliance are unclear, “red flags regarding antitrust concerns are clear.”
The senators wrote that the proposed alliance “is possible[s] The Saudi government’s efforts to “sportswash” its scandalous human rights record” and “raise a host of potential legal and regulatory issues, including with regard to the PGA Tour’s nonprofit tax status and antitrust law.”
According to Warren and Wyden, they have previously expressed concerns about the Saudi monarchy’s history of “egregious” human rights abuses, including allegations that it “routinely harass and cruelly prosecutes individuals for peaceful expression or association; executes individuals (including children) for alleged Robbery and drug-related crimes after rigged trials, including increasingly through mass executions; and the extrajudicial killing of US resident Jamal Khashoggi, a Washington Post journalist.
The senators noted that the PGA Tour, in a federal counterclaim filed against the LIV Golf League, which is funded by Saudi Arabia’s sovereign wealth fund, argued before a federal judge that “LIV is not a rational economic actor, competing fairly to start a golf tour.” , and they are willing to lose billions of dollars to profit from it [U.S. golfers] And golf “sportswashes” the Saudi government’s unfortunate reputation for human rights abuses.
“The PGA-LIV deal will make an American organization complicit — and force American golfers and their fans to join in that complicity — in the Saudi regime’s latest attempt to sanitize its abuses by pouring money into major sports leagues,” the senators wrote.
In the letter, the senators said the proposed new entity, which would combine the business activities of the PGA Tour and PIF, violates sections of the Clayton Act and the Sherman Antitrust Act, which prohibit the restriction of trade, commerce and illegal mergers of companies. and acquisitions that lead to monopolies.
“The PGA-LIV deal, as outlined in the June 6 announcement, would be a clear violation if it were a joint venture,” Warren and Wyden wrote. “It would give the PGA Tour and the PIF control of all significant aspects of U.S. commercial golf operations, including contracts with U.S. golfers and their opportunities to compete, television rights, cost of attending elite golf events, and merchandise.”
The Justice Department had previously opened an investigation into the PGA Tour’s alleged monopolistic business practices, some of which were outlined in a federal antitrust lawsuit filed in August by 11 golfers suspended for the tour for competing in LIV Golf tournaments without a conflicting event. release.
Sen. Richard Blumenthal, D-Conn., told PGA Tour Commissioner Jay Monahan and LIV Golf CEO and President Greg Norman in letters Monday that the Senate Permanent Subcommittee on Investigations, which Blumenthal chairs, has opened a review of the planned alliance. The PGA Tour and LIV Golf League have until June 26 to submit the documents requested by the committee.
On Wednesday, Warren and Wyden argued that the planned deal is no different from the recent merger attempt between American Airlines and JetBlue Airways. Last month, a federal judge ordered the airlines to end their alliance.
“The PGA-LIV deal will make an American organization complicit — and force American golfers and their fans to join in that complicity — in the Saudi regime’s latest attempt to sanitize its abuses by pouring money into major sporting leagues.”
Sens. Elizabeth Warren and Ron Wyden, in a letter to the attorney general
According to the senators, the proposed golf partnership violates Section 2 of the Sherman Act, which makes it illegal to “monopolize any portion of … a trade or trade.” Last week, Monahan told reporters the deal would allow his tour to “take the opponent off the board” and “be able to control the direction going forward.”
“The merger would also give the newly formed entity monopoly power over golfers,” Warren and Wyden wrote, describing “monopoly” when an entity has disproportionate influence over the market. When the LIV was still a threat to the PGA Tour’s dominant position on golf tournaments in the United States, the two were in fierce competition to golfers and offered increasingly higher tournament prize money as a result. New to golfers.”
After initially describing its agreement with DP World and the Public Investment Fund as one that would “merge business operations under common ownership”, the PGA Tour subsequently changed language and removed the word “merger” in the title of a press release announcing the deal.
“While the PGA Tour has apparently attempted to retract its initial statement by removing the word ‘merger’ from the press release announcing the deal, its implications cannot be erased: it will lead to a monopoly of professional golf operations in the United States and possibly beyond,” the Senators wrote. .
In a letter to US senators on Friday, Monahan said the federal government’s inaction over Saudi Arabia’s entry into men’s professional golf led him to agree 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.”