Senators will have their first chance on Tuesday to question the PGA Tour over its surprise decision to partner with LIV Golf, a once-bitter rival under scrutiny for its ties to Saudi Arabia.
The agreement, announced in June after seven weeks of rushed negotiations, ended a flurry of lawsuits the leagues had filed against one other but sparked outrage among Democrats concerned the proposed merger will give the Saudis too much influence over American sports.
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The PGA had lobbied Congress for two years to stop the upstart league from gaining a foothold in the United States. But in a striking reversal, it will now testify before the same lawmakers it courted to argue in favor of its merger with LIV.
Two PGA executives, Chief Operating Officer Ron Price and board member Jimmy Dunne, will speak before the Senate Homeland Security Committee’s investigative panel, chaired by Sen. Richard Blumenthal (D-CT).
Blumenthal had invited Yasir al Rumayyan, a Saudi businessman who will head the new joint entity, as well as LIV CEO Ralph Norman, but the two declined to attend, citing scheduling conflicts.
Senators hope to use the hearing to learn more about the proposed deal but may be frustrated by what they hear.
The PGA will retain a majority stake in a new, for-profit umbrella company that will house both league’s assets, and the two sides have signed nondisparagement clauses.
Little else has been settled between PGA and LIV, however, as the two sides have until the end of the year to come to a final arrangement.
Blumenthal wants to explore the deal as it stands today and whether there was any “improper conduct or wrongdoing” at play.
"The agreement, so far, is filled with holes and gaps, is more of an agreement to agree than an actual agreement," he told reporters on Monday, "and we want to know more about the specifics of what it means for the future of golf."
The subcommittee received the five-page framework governing the proposed merger late last month on top of roughly 300 pages of documents from the PGA. Saudi Arabia’s sovereign wealth fund, which controls LIV Golf, has also sent thousands of pages of documents, according to Sen. Ron Johnson (R-WI), the ranking Republican on the panel.
But more than a fact-finding exercise, the hearing will channel long-simmering Democratic anger toward Saudi Arabia.
Senators have called for President Joe Biden to reevaluate the United States’s relationship with Riyadh over its human rights abuses, in particular the apparent 2018 murder of Washington Post journalist Jamal Khashoggi, which the CIA concluded was ordered by Saudi Arabia’s crown prince.
Tensions with the oil-rich country have grown steadily higher since then over its decision not to increase petroleum output in the face of high gas prices.
"I'm deeply concerned about the national interest that's implicated when a cherished, iconic sports institution is taken over by one of the most repressive governments in the world, which was responsible for the war in Yemen, killing journalists, imprisoning and torturing dissidents, and supporting terrorist activities like 9/11," Blumenthal said.
Democrats believe the kingdom’s interest in golf is an attempt at “sportswashing,” or cleaning up its image on the world stage through investments in sports. Saudi Arabia has also spent millions globally on soccer and reportedly eyed the purchase of Formula 1 racing.
But lawmakers have also warned that the golf merger poses antitrust and even national security concerns.
LIV, which came onto the scene last year, had accused the PGA of exerting monopoly power with its decadeslong dominance in the sport. Meanwhile, the PGA accused LIV of anticompetitive behavior with its lucrative contracts, meant to lure players away from PGA tournaments.
Now, both sides have the task of arguing that an even larger entity does not merit intervention by regulators.
The Justice Department opened an antitrust investigation into the merger last month after Sens. Ron Wyden (D-OR) and Elizabeth Warren (D-MA) penned a letter to the DOJ calling for one.
Around the same time, Wyden, the chairman of the Senate Finance Committee, opened his own investigation into the agreement on national security grounds, raising concerns that it would provide the Saudis access to sensitive real estate.
He also announced he would soon introduce legislation to remove the tax-exempt status of the Saudis’ $700 billion wealth fund.
Republicans are not nearly as concerned about the proposed merger, arguing the government should stay out of professional sports.
Johnson has made much the same argument but more recently expressed an interest in playing a “constructive role” in repairing the fissure in American golf.
He told the Milwaukee Journal Sentinel that the antitrust concerns are a “legitimate issue” but predicted the courts will allow the merger to go through.
If the PGA cannot finalize an agreement with LIV in the next six months, their partnership will end, barring an extension.
But the PGA, which increasingly viewed its litigation with LIV as costly and unsustainable, has a strong interest in seeing the deal through.
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The tour’s commissioner, Jay Monahan, acknowledged the PGA’s about-face would open him up to scrutiny but insisted the new arrangement would “supercharge” its “pro-competitive model."
“I recognize that people are going to call me a hypocrite. Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA Tour and our players,” he said shortly after the deal was announced. “I accept those criticisms, but circumstances do change.”