PGA Tour defends LIV Golf deal in Senate hearing

on Jul11
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Sen. Ron Johnson: We can't look to PGA Tour to be the only party to hold the Saudis accountable

The PGA Tour on Tuesday defended its controversial deal with the Saudi-backed LIV Golf league before senators, as scrutiny of the agreement intensifies.

Representatives from LIV Tour and Saudi Arabia’s Public Investment Fund wasn’t present at the hearing because CEO Greg Norman is out of the country, according to a spokesperson. PGA Tour operating chief Ron Price and policy board independent director Jimmy Dunne testified before the Senate Homeland Security Committee’s subcomittee on investigations.

Dunne and Price said they believed the PGA Tour would benefit the most from the proposed deal. Dunne said that if a deal were to get done, the tour would “definitely stay intact and becomes more powerful,” and added he hoped PIF Governor Yasir Al-Rumayyan would have “a more productive role in the game of golf” in a more constructive way.

Price also said the tour didn’t seek out the Saudis.

“We are in a situation where we faced a real threat … you could go elsewhere for $1 billion, $3 billion, maybe $50 billion,” he said. “We could do it but if we went down that path, we would end up giving up total control.”

The Senate panel is probing the agreement, which would merge the commercial operations of the golf leagues. The proposed deal with LIV has triggered questions regarding the future of the tour and its players’ sponsorships.

The tour rakes in billions of dollars between sponsorships and media rights deals that air its events on television. The PGA Tour has a nine-year deal, which began in 2022, with Comcast, Paramount Global and Disney that brings in $700 million in annual fees, according to previous reports. The PGA tour also signed a 12-year $2 billion deal with Warner Bros. Discovery in 2018 for international TV rights, although it was restructured earlier this year.

The June merger announcement shocked the sports world, with many critics on Capitol Hill accusing LIV, which is funded by the PIF, of “sportswashing,” or spreading government influence through sports.

“Today’s hearing is about much more than the game of golf…It is about how a brutal, repressive regime can buy influence – indeed even take over – a cherished American institution simply to cleanse its public image,” Sen. Richard Blumenthal, D-Conn., said in a statement. “A regime that has killed journalists, jailed and tortured dissidents, fostered the war in Yemen, and supported other terrorist activities, including 9/11. It’s called sportswashing.”

A spokesperson for Blumenthal said the committee is preparing to hear testimony from Norman as well as tour golfers sometime in the future.

While the subcommittee’s chair, Blumenthal, is a critic of the deal, ranking member Sen. Ron Johnson, R-Wis., took a softer tone.

“I hope the hearing gives the PGA the opportunity to describe the challenge it faces in operating and managing professional golf,” Johnson told CNBC’s “Squawk Box” on Tuesday. “The PGA was faced with an existential threat and this is what they’re trying to do to preserve the game of golf and the purity of the competition at the highest level.”

In a framework agreement, the proposed deal shows it would create a for-profit subsidiary of the PGA Tour, and the new entity would manage commercial assets for all the tours. The PGA Tour would manage competitions, and has said it is leading the negotiations to reach a finalized deal.

Johnson on Tuesday said the focus should be on the negotiations leading to a deal in order to preserve the game of golf, adding the tour was faced with “an existential threat” before reaching this early agreement with PIF.

Concerns about Saudi influence

Critics have also pointed to the Saudi government’s ties to the 9/11 attacks, which the Saudis have denied, and the killing of Washington Post journalist Jamal Khashoggi, accusing the Saudis of “sportswashing.” Since its inception, LIV has faced such criticism, and protesters have targeted its events, particularly family members of those who perished in the Sept. 11, 2001, terrorist attacks.

Fifteen of the 19 hijackers that day were from Saudi Arabia, and Osama bin Laden, the mastermind behind the attacks, was born in the country. It has been concluded by U.S. officials that Saudi nationals helped to fund the terrorist group al-Qaeda, although the investigations didn’t find that the Saudi officials were complicit in the attacks.

“Listen I have the deepest sympathy for the 9/11 families. I understand the issue of ‘sportswashing.’ I don’t think there’s enough billions of dollars for the Saudis to wash away the stain of the brutal [Jamal] Khashoggi murder,” Johnson said on CNBC Tuesday.

“But the reality is we all buy oil. We drive cars. We are the ones filling up the coffers of the [Public] Investment Fund. I would rather have the Saudis invest their oil wealth in the U.S., rather than China or Russia, that’s just a reality of the world,” Johnson added.

Earlier on Tuesday, Blumenthal called out the Saudi ties and how a year before the deal was announced PGA Tour Commissioner Jay Monahan spoke out on such controversies.

Blumenthal, like the group 9/11 Families United, pointed to Monahan’s comments during an earlier interview with CBS Sports, when he said he had discussed these controversies with tour players.

“I think you’d have to be living under a rock not to know there are significant implications,” Monahan said during the interview. “I would ask any player who has left or any player who would consider leaving, ‘Have you ever had to apologize for being a member of the PGA tour?'”

Following the deal announcement, Monahan said he expected to be called a hypocrite and that he accepted the criticism, especially after PGA Tour players voiced their shock and anger. Monahan has been on a leave of absence, due to an unspecified medical condition, but is expected to return on July 17.

While the tour has defended the proposed deal as being the best foot forward for the game of golf, especially in light of the expensive litigation and severe competition presented by LIV, it had yet to acknowledge the controversial ties to Saudi Arabia until Tuesday’s hearing.

“Of course, we expect many questions about who we are dealing with,” Dunne said before the subcommittee on Tuesday. He went on to say he lost 66 friends and colleagues at his firm during the Sept. 11 attacks.

Dunne then added that if the deal goes through he has “nothing to gain except the sense of pride that we helped unite the game we love.”

This is a developing story. Check back for updates.

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