PGA Tour-LIV Golf Alliance May Take A Year To Finalize If Consummated

Shockwaves are still reverberating around the astonishing announcement of a deal reached just twelve days ago that will knot the PGA Tour, LIV Golf series and Europe’s DP World Tour together in a tidy bow.

Convalescing PGA Tour Commissioner Jay Monahan has characterized the brokered détente as ‘not a merger’ but the deal descriptor is irrelevant to lawmakers and regulators, much more concerned about the implications of the new entity being backed by Saudi Arabia’s $620 billion public investment fund (PIF) and given effective monopsony power over the business of professional men’s golf.

Unsurprisingly, in swift order the justice department launched an investigation with several senators also initiating probes, including most recently Senate Finance Committee Chairman Ron Wyden, D-Oregon.

“The PGA Tour’s involvement with PIF raises significant questions about whether organizations that tie themselves to an authoritarian regime that has continually undermined the rule of law should continue to enjoy tax-exempt status in the United States,” Wyden wrote in a letter to PGA Tour leadership last week.

In cases of controversial mergers, it’s the mandate of regulatory bodies and government agencies to investigate in order to ensure fairness, transparency and compliance with antitrust laws. When you have rival sports leagues engaged in a bitter war of words and lawsuits for almost two years before pulling an about face and breaking bread as new besties, the optics alone beg scrutiny.

“We had nasty litigation between the PGA Tour and LIV and vice versa where the parties called each other pretty nasty terms—‘monopolist’, ‘improper,’ ‘lack of human rights’, and ‘stooges for a foreign government.’ Now, all of a sudden, they kiss and make up in secret without telling the membership,” Mark Conrad, an associate professor of law and ethics and director of the Sports Business Initiative at Fordham University’s Gabelli School of Business, says.

The athletes, the stakeholders who were kept completely in the dark about the negotiations, were not exactly shy about airing their grievances.

“The general feeling is that a lot of people feel a bit of betrayal from management,” Jon Rahm said ahead of the U.S. Open and “I’m guessing the LIV teams were struggling to get sponsors and the PGA Tour couldn’t turn down the money. Win-win for both tours but it’s a big lose for [those] who defended the tour for last two years,” Byeong Hun An tweeted.

The deal isn’t exactly getting a thumbs up in the court of public opinion in this country. It could potentially be in limbo for as long as a year as the DOJ conducts its investigation and it wouldn’t be surprising if European antitrust regulators take a hard look at this too.

“If anything, antitrust regulators in Europe have been stricter in certain respects, look at Google
GOOG
, so I don’t expect they will sit down and play dead,” Conrad says.

There are really three possible outcomes to pro-golf’s attempt to come together. The new entity navigates the gauntlet of regulatory, legal and political issues and the deal is eventually consummated, a settlement is reached that makes some significant changes in order to appease regulators or the deal is derailed.

If It Falls Apart

We really are too early in the process to speculate which eventuality has the highest odds of coming to fruition, but even if the latter scenario plays out, it doesn’t mean professional golf will be clouded in gloom.

“If the whole thing falls apart and you have two competing organizations, is that so bad? When you are competing, you tend to be more creative. That’s the reason why we have antitrust laws. Competition is considered generally, with exceptions, pretty good and it wouldn’t be the end of the world if it does collapse,” Conrad says.

But don’t underestimate Yasir Al-Rumayyan and PIF’s legal brain trust. Just because the arrangement may feel like a shotgun wedding from an outsider perspective, it doesn’t mean they didn’t have the foresight to dot their i’s and cross their t’s so that the particulars and framework of the deal hold up to the glare of regulatory scrutiny.

When the Saudis were conceptualizing LIV Golf, perhaps they took a page out of their gulf nation neighbor Qatar’s playbook. When Qatar won the bid for and then staged the last World Cup, they navigated their way through a slew of political heat centered around the treatment of migrant workers and lack of LGBTQ freedoms.

“When all was said and done, FIFA had record revenues. When all was said and done, there was great soccer. When all was said and done, there was obviously political hypocrisy but basically the soccer fans didn’t give a damn. They wanted good soccer and it leads into an incredible World Cup in North America in 2026. So, with the criticisms that we’ve bandied about, they did pretty well and I suspect the Saudis are looking at that and thinking—money talks and it can talk loud,” Conrad says.

Money can also buy good publicity for a country looking to rehabilitate their global image while continuing to diversify their economy beyond hawking hydrocarbons.

“Sportswashing is a very big factor and sports as propaganda is very old from the 1936 Olympics on. There is always the possibility that when the dust settles on this thing, the Saudis will be a player in golf whether that’s a part of the PGA Tour, LIV or some other entity. They are not going to go away,” he adds.