The PGA Tour is now in the crosshairs of the United States House of Representatives after its merger with LIV Golf, and could soon lose the tax exemption that saves them millions of dollars every year.
The PGA Tour shocked the golf world on Tuesday when it was announced they and the DP World Tour had agreed to a completely unexpected merger with their bitter rival LIV Golf. Mergers between sports leagues are nothing new and that is how fans got the AFC and NFC in the NFL, and the ABA joining the NBA filled out the league in major ways nationally. However, this merger was quite different.
Related: PGA Tour and LIV Golf agree to shocking merger ending 2-year golf rivalry
The rivalry between the PGA Tour and LIV Golf was heated because LIV was able to lure away many top PGA stars with massive signing bonuses and tournament payouts. They were able to do that because the league is funded by the Saudi Arabian Public Investment Fund, which is an arm of the absurdly wealthy Saudi government. A government that’s had countless human rights violations.
Furthermore, the Saudi’s connection to the murder of reporter Jamal Khashoggi and the 9/11 attacks was often referenced by PGA Tour Commissioner Jay Monahan and other executives for the tour when explaining the ugly links LIV created for the sport. However, in the end, the PGA completely changed course by merging with its rival and is expected to get serious funding from the Saudi PIF.
Congress targets PGA Tour with ‘No Corporate Tax Exemption for Professional Sports Act’
That funding and the new relationship do not sit well with many members of the United States Congress, and it seems several of them are now looking to hurt the PGA Tour where it hurts most, in its bank accounts.
On Thursday, Sports Illustrated reported that California Rep. John Garamendi (D), has put forth a new bill dubbed the “No Corporate Tax Exemption for Professional Sports Act.” The purpose of the bill is to go after powerful sports leagues, like the PGA Tour, that avoid paying any federal corporate income tax using an existing loophole in the tax code.
“I find it particularly obnoxious that they would be benefiting from this exemption with this merger, and that’s why we’re carrying this bill,” Garamendi told the outlet. “We’re gonna do everything we can to end this last remaining tax loophole for professional sports associations.”
Garamendi claims he expects a “significant” amount of congressional members to sign the bill and has already garnered interest from members of the Senate.
“We’ve just now seen the merger of the three biggest, most prominent leagues, the PGA (Tour), LIV, and then the European Tour. So we’ve seen the elimination of competition, we now have a monopoly in professional golf. And from the point of view of a wannabe professional golfer, they’re going to have no choice. And even monopolies ought to be paying their taxes.”
– California Rep. John Garamendi (D)
In a time where it can be hard to have Democrats and Republicans agree on much in Congress, it seems this issue has unified them, and that is very bad news for the PGA Tour. The tour earned over a billion dollars in 2021 and avoided millions in tax bills via the current loophole.