US Senate opens investigation into new partnership between PGA Tour and LIV Golf

CNN

By Matt Foster, CNN

(CNN) — The US Senate opened an investigation into the proposed merger between the PGA Tour and LIV Golf’s owners, Saudi Arabia’s Public Investment Fund (PIF), on Monday.

Democratic Sen. Richard Blumenthal issued both organizations with letters in his role as chairman of the Permanent Subcommittee on Investigations.

Last week, the PGA Tour made the shock announcement that it and the European-based DP World Tour would partner with LIV Golf, unifying the trio under a new, yet-to-be-named, commercial entity and consequently ending a feud that has dogged the men’s professional game for the past year.

The letter to the PGA Tour is addressed to its commissioner, Jay Monahan, while chief executive Greg Norman received the letter to LIV Golf. The letters detail the causes for concern and subsequently request documentation relating to the new agreement and how it came to be formed, as well as records “referring” to the dispute between the organizations prior to the proposed partnership.

In a statement, the PGA Tour said, “We are confident that once Congress learns more about how the PGA TOUR will control this new venture, they will understand the opportunities this will create for our players, our communities and our sport, all while protecting an American golf institution.”

LIV Golf declined to comment when asked by CNN if it had received the letter.

Both of Blumenthal’s letters note “PIF’s role as an arm of the Saudi government” combined with the PGA Tour’s “sudden and drastic reversal of position concerning LIV Golf” elicit “serious questions regarding the reasons for and terms behind the announced agreement.”

The letters speak of Saudi investment in the sport as being described as “sportswashing,” a term referring to governments using high-profile sporting events to project a favorable image of their country around the world, often to draw attention away from alleged wrongdoing.

The correspondence also refers to the Gulf state’s “deeply disturbing human rights record at home and abroad.”

The Senate has requested LIV Golf hand over documents detailing the organization’s corporate structure, while the PGA Tour records relating to its tax-exempt status under Section 510(c)(6) and how that will be affected by the partnership were called for.

Both the PGA Tour and LIV Golf have until June 26 to hand over the requested documentation, per the letters.

The investigation doesn’t come as a surprise, with Blumenthal and other Senate Democrats expressing their concern over the partnership soon after the initial announcement.

Senate Finance Chairman Ron Wyden said last Wednesday: “I’m certainly going to be digging into this. This looks to me like a cash grab, plain and simple, and it raises very troubling questions, and we’ll be digging into it.”

Blumenthal called for the Justice Department intervention and suggested Monahan should resign. “There’s an ongoing Department of Justice investigation, I would intensify it and focus not only on the anti-trust issues, but also on the potential foreign registration questions,” he said on Wednesday.

“I think the commissioner has been so discredited that he can hardly present a credible voice for [the PGA Tour]. I think he has really failed not only the fans and the consumers involved, but also the players involved in [the PGA Tour] who made major financial sacrifices.”

Sen. Chris Murphy said: “I think it’s a really serious thing to have a foreign dictatorship in charge of a major US sports league. This is a watershed moment and I think we need to treat it as such.”

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