Topline
PGA Tour executive Ron Price and board member Jimmy Dune claimed to a Senate panel on Tuesday that the PGA faced “a real threat” in its litigation against LIV Golf that preceded its decision to merge with the controversial, Saudi-backed entity and argued that going through with the proposed deal would help the PGA maintain control of the game, even though the deal has faced widespread criticism and is the subject of a Justice Department investigation.
PGA Tour COO Ron Price and PGA Tour Policy Board member Jimmy Dunne are sworn in during a Senate … [+]
Key Facts
Tuesday’s hearing by the Senate Homeland Security Committee’s Permanent Subcommittee on Investigations involved questions from senators over how the PGA could approve the pending deal given the PGA’s past criticisms of LIV, along with the Saudi Arabian government’s human rights violations.
Both Dune and Price assured the panel the deal would involve the PGA being completely in control of the new entity, and that continuing the “expensive, disruptive, and divisive” litigation against LIV would have resulted in the Saudi-backed group becoming the leader of professional golf, leaving the PGA with no choice but to pursue the deal.
Senators had mixed feelings on the deal, as some, like Sen. Ron Johnson (R-Wis.) pointed out the PGA was indeed unfairly matched financially in the fight against the Saudis, and that they were right to view LIV as “an existential threat.”
Others, like Sen. Richard Blumenthal (D-Conn.), the subcommittee chairman, argued the hearing was about stopping a “brutal, repressive” regime from gaining influence, and expressed that the subcommittee would be further looking into the deal and questioning other potential witnesses in the future.
Key Background
Launched in 2021, LIV Golf is financially supported by Saudi Arabia’s sovereign wealth fund and made headlines when its massive contracts began luring big-name golfers away from the PGA Tour, which has long dominated professional golf in the United States. The PGA responded to the competition by barring its players from playing in LIV events and countersuing LIV for paying golfers to break their contracts, resulting in a series of antitrust litigation. The rivalry between the two reached a stunning conclusion in June, when the sides announced an agreement to merge. The proposed deal would end all pending litigation, as well as create “a new, collectively owned, for-profit entity,” according to the announcement. While the PGA will control the majority of the new board, the governor of the Public Investment Fund—the Saudi wealth fund that runs LIV— will serve as chairman. Under the original agreement, which is still being negotiated, the PIF would also have the “the exclusive right to further invest in the new entity,” as well as refuse any capital invested into the new entity.
Big Number
More than $1 billion. That’s how much Price revealed on Tuesday that Saudi Arabia’s Public Investment Fund could be committing to the new entity, although details of the deal are still being finalized.
Further Reading
PGA Tour Reps Reveal Saudi PIF Plan To Contribute ‘North Of $1 Billion’ To Fund New Golf Entity (Forbes)
PGA Tour And Saudi-Backed LIV Golf Agree To Sudden Merger (Forbes)
Senate Probes Saudi-Backed LIV-PGA Merger—Questioning Its Non-Profit Status (Forbes)
Source: https://www.forbes.com/sites/isabelbekele/2023/07/11/pga-leadership-defends-choice-to-back-liv-deal-in-senate-hearing/