The U.S. Department of Justice notified the PGA Tour that it will investigate the circuit’s planned alliance with the Saudi group funding LIV Golf over antitrust worries, The Wall Street Journal reported Thursday.
The report comes a day after U.S. Sens. Elizabeth Warren and Ron Wyden urged the DOJ to review the merger, announced last week. Wyden, chair of the Senate Finance Committee, also notified PGA Tour executives Thursday that his committee will be opening an investigation.
That came on the heels of the Senate Permanent Subcommittee on Investigations, chaired by Sen. Richard Blumenthal, announcing a probe into the merger earlier this week.
The Justice Department already was looking into the PGA Tour and alleged monopolistic practices after a federal antitrust lawsuit was filed by 11 LIV golfers in August. A partnership between the sides would end litigation.
Tour executives informed employees the merger could take at least a year to complete and possibly longer with the investigations, per the Journal.
In a letter to the Senate earlier this week, PGA Tour commissioner Jay Monahan blamed congressional inaction for the decision to ally with LIV Golf and Saudi Arabia’s Public Investment Fund.
“While we are grateful for the written declarations of support we received from certain [congressional] members,” the letter read, “we were largely left on our own to fend off the attacks, ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia. This left the very real prospect of another decade of expensive and distracting litigation and the PGA Tour’s long-term existence under threat.”
PIF governor Yasir Al-Rumayyan would chair the resulting new company, while Monahan would be the CEO.
Monahan has since been hospitalized with an undisclosed medical condition.
The PGA Tour operates as a tax-exempt organization, while the PIF and LIV lured multiple PGA veterans with guaranteed contracts over $200 million. The gray areas in the merger appear to be significant from a legal and operational perspective.
Monahan said the PGA Tour will continue to “operate as its own entity,” but Al-Rumayyan would hold a seat on the Tour board.
Blumenthal sent letters to Monahan and LIV CEO Greg Norman on Monday citing “concerns” the government plans to raise around the PIF and use of profit from the investment in the new alliance.
A key motive for the alliance is dissolving existing litigation between the rivals, which likely would end the discovery phase of any trial either side faced. However, the Department of Justice is in the midst of an investigation of the PGA Tour’s alleged monopolistic business practices and discovery could be possible in the U.S. Senate’s Permanent Subcommittee on Investigations review that was just launched to study the out-of-nowhere pact.
–Field Level Media