PGA Tour official: LIV deal 'should not' violate US antitrust laws

PGA Tour officials defended their decision to make peace with Saudi-backed LIV Golf before US lawmakers on Tuesday, saying they believe a proposed deal to merge the two entities would not violate antitrust laws and avoids a takeover of professional golf.

The hearing comes more than a month after the PGA Tour reached an agreement with LIV Golf to end all litigation between the two sides and engage in a merger that includes the creation of a new golf entity funded by Saudi Arabia's Public Investment Fund (PIF).

PGA Tour Chief Operating Officer Ron Price told lawmakers that the tour has been notified that antitrust regulators are going to look at the agreement.

"We believe that it should not violate antitrust rules, but we plan to fully cooperate with that investigation," Price said.

The merger, as proposed, would put the PGA Tour, DP World Tour, and LIV Golf under one new collectively owned entity.

Saudi Arabia's PIF would initially be the exclusive investor for the new entity, sparking concerns over Saudi involvement in the American sports entity. There are discussions of PIF funding the new entity with an investment "north of $1 billion," Price said.

Price testified with PGA board member Jimmy Dunne, who helped broker the deal with LIV Golf. They told lawmakers they had few other options than to work with LIV Golf's funder, PIF.

The PGA Tour officials also noted that while the announcement framed the merger as definitive, no binding agreement had been reached.

"My fear is if we don't get an agreement...They are already putting billions of dollars into golf," Dunne said. "They have an unlimited amount of money. That will make [players] move because [the PGA Tour] isn't that big. It's only a couple hundred players."

The PGA Tour is expecting to produce roughly $2.1 billion in revenue, per Price, with nearly $1 billion of that money going directly to player payouts at tournaments in 2023.

Marc Edelman, a law professor at City University of New York, said in an interview last month that the US Justice Department is on good grounds to investigate under its authority to look into agreements that likely lessen competition — and to block it.

"What we have here…is a two-to-one merger," he said, explaining that in the market to host touring golf events the proposed merger would whittle down two major competitors to one. Whether or not the DOJ would factor in Europe's DP World Tour, he said, is unknown.

"Two-to-one mergers are regularly challenged and regularly broken up," Edelman said. "And it takes somewhat extraordinary circumstances for mergers of that nature to be allowed."

Money has become a central part of the story of why the PGA Tour feels it was forced into an agreement as it tried to keep pace with LIV Golf, which began poaching players from the PGA Tour in 2022.

LIV built its reputation by pouring millions of dollars into the business and uprooting traditional golf with loud music at the tee boxes and a team play format. The upstart league offered lucrative contracts to players, with multiple contracts reportedly worth more than $100 million.

Richard Blumenthal, a Democratic senator from Connecticut who chairs the Senate's Homeland Security Committee's Permanent Subcommittee on Investigations, acknowledged the PGA Tour would need more funding to keep pace with LIV's player contracts but questioned if the PGA Tour could have found funding elsewhere.

"We would still face the threat of a $700 billion fund recruiting our players and operating a league in an irrational economic manner," Price said.

Senator Rand Paul, a Republican senator from Kentucky, said while Saudi Arabia may be using its investment in American sports to hide its alleged human rights abuses, Congress lacks constitutional authority to intervene in its private contracts.

"Antitrust shouldn’t be involved with associations," Paul said. "It shouldn’t be involved with the PGA."

Several US senators have expressed uneasiness over the prospect that the Saudi government could leverage its PGA Tour partnership to soften an "egregious" human rights record and unfairly benefit from US tax laws.

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