(Washington) Saudi Arabia’s sovereign wealth fund could invest more than $1 billion in the proposed alliance between its circuit, LIV Golf, and the PGA. So said a PGA leader before a US Senate committee in Washington. But the proposed merger has sparked mistrust and outrage at the growing influence of Saudis in world sport.
Responding to sometimes hostile, sometimes accommodating questions, PGA Chairman and CEO Ron Price told senators that the Saudis’ investment in the new circuit has yet to be finalized. The ongoing “discussions” could, however, lead to an investment “in excess of 1 billion”, he said.
This statement – during a hearing that sometimes showed the unease of Congress at this tsunami of foreign money in golf – reveals the extent of Saudi ambitions in international sport, already visible in soccer and Formula 1. However, the hearing also showed the vagueness of the framework agreement which has upset professional golf since its announcement on June 6.
PHOTO EVELYN HOCKSTEIN, REUTERS
Ron Price, CEO of the PGA Tour, and Jimmy Dunne, who sits on the board of directors, appeared before a Senate committee on Capitol Hill, which is reviewing the proposed merger with the LIV Golf Tour.
The agreement in principle is little more than a draft aimed at the creation of a new company uniting the activities of the LIV Golf, PGA and DP World (formerly European Circuit) circuits. But apart from the commitment to end litigation, the agreement contains few firm commitments. The parties hope to reach a real contract by the end of the year.
Speaking to the Senate Standing Sub-Committee on Tuesday, Mr. Price said: “Normally, a contract is not negotiated in public, but we are committed to trying to move from a framework agreement to a final agreement. »
No choice, says PGA
According to Mr. Price, the success of the agreement is essential to the survival of the PGA Tour, which weighs a fraction of the value of the investment fund. According to PGA estimates, the legal costs and tenfold increase in purses to retain the best would quickly become unsustainable.
James J. Dunne III, who sits on the board of the circuit and was involved in negotiating the original deal, said the management of the investment fund “wants to destroy the circuit” and has “an unlimited horizon and funds unlimited” to do so.
“We knew a long-term fight would be bad,” Dunne said during the hearing, which took place in a packed room in the Capitol that has seen confirmation hearings from the Supreme Court and the Supreme Court. 9/11 Commission.
PGA Tour executives have argued that the deal, while tentative, puts them in a position to handle the day-to-day operations of professional golf. Tour Commissioner Jay Monahan has been named CEO of the new company, which is expected to be called PGA Tour Enterprises, and the Tour is expected to take a majority of the company’s board seats.
MM. Price and Dunne were much less eager to explain how future PGA Tour Enterprises chairman Yasir al-Rumayyan, who heads the Saudi fund, will act. They were less likely, too, to explain the implications of a deal granting broad investment rights for the Riyadh-based fund that has grown in power and value in recent years.
Uncertainties
It is not certain that a final agreement will be reached. Last Saturday, a member of the PGA Tour’s board of directors, former AT&T CEO Randall Stephenson, resigned. In a letter announcing his departure, Mr. Stephenson writes that he cannot “objectively assess nor conscientiously support” the concept of an agreement “currently being negotiated by management”.
If the board ends up backing a more binding deal, the deal could come head-to-head with Justice Department antitrust officials, who may oppose the deal. Mr. Price said last Tuesday that the department had made clear its intention to review the deal.
The framework agreement has already prompted two Senate investigations, a bill in the House of Representatives to revoke the PGA Tour’s tax exemption and Tuesday’s hearing. However, the hearing showed that the opposition in Congress cannot do much, except serve as a forum for grievances: the senators did not even agree on whether or not the procedure was useful.
“You capitulated because of the money”
Connecticut Democratic Sen. Richard Blumenthal has slammed the PGA for its recent flip-flop, which condemned Saudi money in golf just weeks ago.
PHOTO PATRICK SEMANSKY, ASSOCIATED PRESS
Connecticut Democratic Senator Richard Blumenthal. Behind him, a poster quoting golfer Jon Rahm, who spoke of “betrayal”.
“You capitulated because of the money”, launched Mr. Blumenthal, president of the subcommittee, to MM. Price and Dunne. He also denounced “the hypocrisy” and the power of money, which can “incite individuals and institutions to betray their values and their supporters”, or which, perhaps, reveals the very absence of these values. . Other sports and institutions “could fall prey, if their leaders only think about money”, he added.
Other elected officials were more conciliatory. Wisconsin Republican Senator Ron Johnson said there was “nothing wrong with the PGA Tour negotiating its survival.”
This article was published in the New York Times.