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The PGA TOUR logo is seen after play was suspended due to severe storms during Round 3 of THE PLAYERS TOURNAMENT held at THE PLAYERS Stadium at TPC Sawgrass on May 14, 2011 in Ponte Vedra Beach, Florida.
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The PGA Tour has begun its public defense of its deal with Saudi-backed LIV Golf ahead of a key Senate hearing scheduled for Tuesday.
The tour’s chief operating officer Ron Price, who is scheduled to testify on Tuesday, issued a statement editorial at The Athletic on Monday to defend the deal and explain why it is the best outcome for the future of golf. He also said that the agreement should not be considered a merger.
“Given the well-documented legal disputes that have arisen between the PGA Tour and the PIF, we understand the fair and valid questions raised by PGA Tour members, tour partners, the media, fans, and now Congress,” Price said in the editorial.
The piece comes days after a change to the PGA Tour’s policy board added another wrinkle to what could be a rocky road toward approval of the deal.
Former AT&T CEO Randall Stephenson resigned Saturday from the PGA Tour policy board, on which he has served since 2012. Stephenson stepped down as lawmakers are likely to launch a broad investigation into the merger between the PGA Tour and the LIV, starting with the Senate hearing Tuesday.
Sen. Richard Blumenthal and Sen. Ron Johnson, the chair and ranking member of the Senate Homeland Security Committee’s Permanent Subcommittee on Investigations, respectively, called the meeting on Tuesday. The senators asked officials from the tour and the Saudi Public Investment Fund to appear before the committee.
The tour said in a statement last week that while the Senators have requested testimony from PGA Tour commissioner Jay Monahan, independent director of Price Council and Policy Jimmy Dunn will appear instead. Monahan has been on leave due to an unspecified medical condition, but recently announced that he will return to his position on July 17.
PGA Tour Commissioner Jay Monahan speaks during the trophy ceremony during the final round of THE PLAYERS Championship at THE PLAYERS Stadium at TPC Sawgrass on March 12, 2023 in Ponte Vedra Beach, Florida.
Richard Heathcote | Getty Images Sport | Getty Images
said the PGA Tour representative in the latest statement.
He did not comment on the tour after Price’s op-ed on Monday.
The senators had said in an earlier letter that the subcommittee would consider the proposed deal and “the Saudi fund’s investment in golf in the United States, the risks associated with a foreign government’s investment in American cultural institutions, and the implications of this planned agreement for professional golf in the United States.” In the future “.
It is not known whether representatives of the Saudi Public Investment Fund will testify. PIF representatives did not respond to multiple requests for comment.
Defend the deal
Last month, the PGA Tour and LIV Golf at PIF, as well as the DP World Tour in Europe, agreed to merge. While specific terms and valuation of the deal were not announced, the early framework of the proposed deal shows it would create a for-profit subsidiary of the PGA Tour, and the new entity would manage the commercial assets of all the tours. The PGA Tour will administer the competitions.
The proposed deal came as a shock to the sports world — including the tour’s players — after months of tensions between the PGA Tour and LIV Golf, which led to both entities filing antitrust lawsuits against each other. All litigation between the two was quashed as part of the proposed deal.
Price, in an op-ed on Monday, acknowledged the deal was a surprise after two years of “unprecedented struggle.”
Negotiations are still ongoing and the framework ends litigation between the two entities. Price alleged that due to the confidential nature of the deal, “much of the initial reaction was negative, stained with misinformation or misunderstanding.”
“This is something we fully own and deeply regret. Going forward, we firmly believe that the more facts are discussed and understood, the more supportive our constituents will have for a potential final agreement – if one is reached – and we look forward to a positive and lasting impact at all levels of our game,” he said. Price in Monday’s editorial.
The two entities have been embroiled in antitrust lawsuits since last year. LIV sued the tour, alleging anti-competitive practices of banning its players, while the tour opposed, claiming that LIV was stifling competition.
Price has so far defended the FC as a positive outcome not only for the tour, but for professional golf as a whole. He said the agreement “provides clear, explicit, and lasting guarantees that the PGA Tour will drive the decisions that shape our future, and that we will control our operations, our strategy, and our mission continuity.”
He added that if the two sides reached an agreement, it would allow for more investment in players, events, stadiums, communities and technology. The Public Investment Fund said it would invest billions of dollars in the new entity.
Price also claimed that the deal was “not a merger”. The round would remain the same, he wrote, and that the newly formed subsidiary would include the Public Investment Fund as a non-controlling minority investor, as it has in “many other US companies.” The majority of the board members who lead PGA Tour Enterprises will be appointed by the tour and managed by Monahan.
Following the announcement, top player Rory McIlroy – who had repeatedly criticized LIV Golf during the years of acrimony – expressed outrage over the proposed deal being referred to as a merger.
Liv controversy
Controversy has surrounded LIV since its inception in 2022. The PIF is not publicly owned and is a sovereign wealth fund controlled by bin Salman. Critics have accused the fund of “sports laundering,” or using LIV and other sports investments to improve the oil-rich country’s image and divert attention from the kingdom’s history of human rights abuses.
In his resignation letter Saturday to his fellow board members, Stevenson cited one such alleged abuse.
The tour notified its members Sunday night of Stephenson’s departure from the policy board, according to a memo seen by CNBC. She indicated that “there is no specific time frame during which an independent successor director will be appointed.” The four remaining Independent Directors, in consultation with the five Board Directors and the PGA Director, will work together to fill this position.
He wrote in the memo that he had “serious concerns” about the proposed deal and whether he could objectively assess or support it because of a US intelligence report assessing Saudi Crown Prince Mohammed bin Salman. He ordered the murder of journalist Jamal Khashoggi in 2018. The warrant was earlier mentioned by The Washington Post.
Stevenson’s concerns about Saudi investment acceptance are similar to those expressed by others on the tour, besides politicians. Stephenson did not respond to requests for comment.
A US intelligence report from 2021 showed that the Saudi crown prince approved an operation to capture or kill journalist Khashoggi in 2018. The report indicated that bin Salman controlled decision-making in Saudi Arabia, as well as the participation of an advisor and key members. Details protecting the prince in the operation that killed Khashoggi, a critic of the royal family.
Lawmakers have raised doubts about the merger since Golf Tours announced it. Senior Senate Democrats have called out antitrust concerns and pushed for an investigation into the merger.
“Fans, players and concerned citizens have many questions about the planned agreement between the PGA Tour and LIV Golf,” Johnson said in a statement released last month.
While the Investigations Subcommittee has broad jurisdiction to investigate matters including corporate violations, committee hearings are relatively rare and typically constitute the early stage of a longer investigation. The merger session is the committee’s second this year.
Before scheduling the meeting, Blumenthal announced his intention to investigate the deal in light of Saudi Arabia’s human rights abuses.
When the deal was announced, Monahan acknowledged the shock and anger it had caused among the players.
LIV Golf’s events have been met with protests, especially from family members of those who died in the September 11, 2001 terrorist attacks. 15 of the 19 hijackers that day were from Saudi Arabia, and Osama bin Laden, the mastermind of the attacks, was born in the country. US officials concluded that Saudi nationals helped fund the terrorist group Al Qaeda, though investigations did not find that Saudi officials were complicit in the attacks.
Members of the 9/11 Families United group criticized the deal. They also called out Monahan for notes in an interview last summer, when he said he discussed 9/11’s connections with PGA Tour players and suggested the organization is on higher moral ground than LIV.
“I think you have to live under a rock not to know that there are significant ramifications,” Monahan said during an interview with CBS Sports. “I would ask any player who left or any player who might be considering leaving, ‘Have you ever apologized for being a member of the PGA Tour?'”
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