Topline
The Justice Department told the PGA Tour it will investigate the recently announced merger between the golf giant and the Saudi-backed LIV Golf league because of antitrust concerns, the Wall Street Journal reported Thursday, more than a week after the former rivals surprised the world with the announcement they were merging.
The Justice Department told the PGA Tour it will investigate the recently announced merger between ... [+]
Key Facts
The review by the Justice Department makes it unlikely that a transaction between the golf entities will take effect for some time, the Journal reported, citing people familiar with the matter.
The Justice Department had already been investigating a number of golf entities, including the PGA Tour, for antitrust concerns, the Journal reported.
Also on Thursday, Sen. Ron Wyden (D-Ore.), who chairs the Senate Finance Committee, announced a “wide-ranging” investigation into the merger that could threaten the PGA’s tax-exempt nonprofit status.
Forbes could not immediately reach PGA Tour or LIV Golf for comment, and the Justice Department declined to comment.
News Peg
Earlier this month, PGA Tour and LIV Golf signed an agreement to combine the commercial businesses and rights into a new company that will have its own name. The PGA will control the majority of the new board, but the governor of the Public Investment Fund—the Saudi wealth fund that runs LIV—will serve as chairman. The PIF, the Saudi wealth fund, has significant power in the new entity. It will be able to refuse any outside capital invested, and will have “the exclusive right to further invest in the new entity,” according to a press release announcing the deal.
Key Background
LIV broke onto the golf scene in 2022 as a direct competitor to the PGA Tour with the help of billions of dollars from the Saudi investment fund. With that money, the new golf league recruited some of the PGA Tour’s best known golfers. That challenge to the PGA’s dominance in the golf world led to a lengthy and messy legal fight. Eventually, the PGA Tour barred its members from playing in LIV events which ultimately caused some of its winningest golfers—including Phil Mickelson and Dustin Johnson—to be suspended. Mickelson was among a number of LIV golfers who then sued the PGA for violating antitrust law. The golf entities also sued each other in federal court: LIV said PGA broke federal antitrust laws by attempting to prevent golfers from switching tours, and the PGA claimed LIV convinced players to illegally break their PGA contracts. But the merger agreement announced earlier this month ended all pending litigation.
Tangent
Earlier this week, the Senate’s investigation subcommittee announced it was looking into the merger, seeking information on the “risks posed by a foreign government entity assuming control over a cherished American institution.” Sen. Richard Blumenthal (D-Conn.), asked for documents and communications from PGA Tour commissioner Jay Monahan and LIV commissioner Greg Norman related to the surprise merger. The inquiry is separate from Wyden’s Thursday announcement.
Further Reading
PGA Tour And Saudi-Backed LIV Golf Agree To Sudden Merger (Forbes)
Senate Probes Saudi-Backed LIV-PGA Merger—Questioning Its Non-Profit Status (Forbes)
