US Senate investigating PGA Tour-LIV Golf merger because of Saudi concerns

The June 6 merger announcement was a “sudden and drastic reversal of a position concerning LIV Golf”. Photo / AP

The United States Senate is investigating the PGA Tour’s shock merger with LIV Golf, citing concerns over Saudi Arabia’s “deeply disturbing human rights record”.

Democrat Richard Blumenthal, chairman of the chamber’s permanent subcommittee on investigations, demanded communications between executives that led to the sudden pact.

While former president Donald Trump last week welcomed a “big, beautiful and glamorous deal”, a host of senior figures in Washington have expressed dismay at an agreement. Blumenthal, who has written to PGA Tour commissioner Jay Monahan and LIV Golf chief executive Greg Norman, also asked for records related to the Tour’s non-profit status, an apparent warning that its tax-exempt standing could be challenged, with a two-week deadline to provide documentation.

As part of a deal to create a global operation featuring the world’s top players backed by Saudi Arabia’s massive wealth, all sides dropped all lawsuits involving LIV Golf.

The June 6 merger announcement was a “sudden and drastic reversal of a position concerning LIV Golf”, wrote Blumenthal in reference to the commissioner previously speaking out strongly against LIV.

He added: “PGA Tour’s agreement with PIF regarding LIV Golf raises concerns about the Saudi Government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution.”

PGA Tour commissioner Jay Monahan. Photo / AP

LIV Golf and the PGA Tour are yet to respond to the letter from Blumenthal, who asked for an outline of corporate structure and records of any disputes between the corporate heads and any other stakeholders by June 26.

Congress cannot block the agreement simply by opening an investigation, but scrutiny and public hearings could be politically damaging for the sport.

The Justice Department, which is already scrutinising the antitrust lawsuit regarding the PGA Tour’s efforts to prevent players from defecting to LIV, could also look into how the merger deal was brokered and, if deemed necessary, step in to halt the agreement.

Treasury secretary Janet Yellen told CNBC last week that it was not immediately obvious that the PGA merger with LIV was a matter of national security. But senator Ron Wyden, chairman of the Senate finance committee, said US officials should determine whether the deal would give the Saudis “improper control or access to US real estate”.

Meanwhile, Phil Mickelson is facing a trademark infringement claim over the logo of his HyFlyers LIV Golf team. An apparel company in Argentina named Cool Brand Supply last week filed a lawsuit to a New Jersey district court claiming that the logo was “nearly identical” to its own.