A $1 Billion Investment From Saudi Arabia Will Not Sell Off US Golf, Says PGA Tour's COO In Senate Hearing

How does a sports organizer and presenter become the focus of a U.S. Senate investigation into homeland security?

A recently announced partnership between golf's main pro tournaments is raising eyebrows in Capitol Hill.

The deal, which critics have described as a merger, gives unprecedented control of the sport to Saudi Arabia's Sovereign Wealth Fund.

On Tuesday, the Senate held a hearing featuring key men in PGA Tour's leadership. The institution dominated professional golf tournaments since 1929. In recent years, PGA's existence came under threat from the rise of LIV Golf, a Saudi Arabia-backed tournament founded in 2021 that risked dethroning PGA from almost a century of leadership as the organizer of pro golf tournaments.

Sen. Richard Blumenthal's opening words made a special emphasis on the fact that LIV Golf is 93% owned by the Public Investment Fund of Saudi Arabia.

"Today's hearing is about much more than the game of golf. It's about how a brutal, repressive regime can buy influence and indeed even take over a cherished American institution to cleanse its public image," said Blumenthal, who chairs the Senate Committee on Homeland Security & Governmental Affairs.

The Senator made mention of Saudi Arabia's many reported human rights violations, which include killing journalists, jailing and torture of government dissidents, backing the war in Yemen and supporting "other terrorist activities including the 9/11 attacks."

Family members of 9/11 victims were present at the hearing.

The deal between PGA and LIV came as a surprise, as the two bodies were locked in a legal battle after PGA announced it would suspend any player that played in LIV’s tournament. The proposed deal, not yet signed, would resolve any legal dispute between the two tournaments.

Blumenthal denounced PGA for shifting its position after being LIV's most outspoken critic since the founding of the tournament in 2021.

The committee is considering the partnership a risk to national security as it allows unprecedented control over a sport to Saudi Arabia, a regime that is considered not to conform to U.S. values and economic interests.

Blumenthal said the institutions in concern are vital to national interests as "sports are central to our culture and society," and "to have them taken over by a repressive foreign regime is a matter of national security."

Another issue is how assets acquired by PGA Tour as a nonprofit organization will now be transferred into LIV Golf, which is for profit.

PGA Tour COO Ron Price served as the main representative of the organization as PGA Commissioner Jay Monahan is currently on medical leave. LIV Golf CEO Greg Norman did not attend the hearing although he was summoned by the Senate for the event.

According to the Senate's research, the PGA tour will be equity-dominated by Saudi Arabia's Public Fund after the agreement. This includes the presence of Yasir Al-Rumayyan, governor of Saudi's Public Fund, on its board and prohibits PGA leadership from speaking out against Saudi Arabia or its fund. 

These accusations were denied by Price, who said that every decision taken by the PGA Tour had been made to protect the organization.

While negotiations towards a definitive agreement are still underway, the framework agreement contains "safeguards that ensure the tour will operate fundamentally as it does today," controlling its own operations and the board of the new PGA Tour subsidiary.

The new subsidiary that would come out of the deal between the two organizations would receive an investment of "north of $1 billion" from Saudi Arabia's Public Investment Fund, according to Price. The sum had not been disclosed before the hearing.

Once LIV Golf erupted into the golf scene in 2021, PGA Tour saw its historic leadership over the sport questioned. The underdog league, with full financing from the Saudi Sovereign Wealth Fund, began recruiting PGA Tour players. Those players were penalized by the PGA, which received an antitrust lawsuit from LIV, which claimed it was holding a monopoly over the sport.

Price said PGA was losing tens of millions in litigation costs, and though it had secured a favorable position in the litigation, there was no guarantee it would win, and LIV still had the opportunity to gain dominance of the sport.

As per Price's statement, PGA Tour decided to pair with LIV Golf in an effort to save its future, cancel the lawsuit and reunite the sport once again into one organization.

PGA Board Member Jimmy Dunne, who was also a witness of the hearing, said "The tour will continue to manage the game, retaining majority government control and majority economic control," appointing a majority of the board of directors.

The Department of Justice's antitrust division is launching a separate investigation into the partnership.

Photo by Courtney Cook on Unsplash.