WASHINGTON – Progressive lawmakers are urging the Department of Justice to probe the merger between the PGA Tour and its Saudi-backed rival LIV Golf, if not block it outright, over concerns that it would create a monopoly in the professional golf industry amid fears the new entity would empower an authoritarian regime’s efforts to launder their reputation through sports.
“The PGA sellout — its monopolistic merger with LIV — clearly merits DOJ scrutiny. A reported antitrust investigation, already underway, has higher stakes now — along with possibly new issues,” tweeted Sen. Richard Blumenthal (D-Conn.), a top antitrust advocate who serves on the Senate Judiciary Committee.
Under the surprise agreement announced Tuesday, the two organizations will combine into a new “for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game’s best players.” The announcement follows months of tension between players and officials in the two rival organizations.
With the encouragement of the left and even a handful of conservatives, the Biden administration has worked to revitalize antitrust enforcement in the United States, appointing skeptics of corporate consolidation to key posts at the Federal Trade Commission and the Justice Department. Challenging the high-profile merger of LIV and the PGA Tour could be a way for those progressives to leave a major mark on the American cultural landscape.
Public Investment Fund, which funds LIV Golf and is controlled by Saudi Arabia’s crown prince Mohammed bin Salman, is “prepared to invest billions” of dollars into the new entity. The Saudis have been accused of covering up their government’s human rights violations, including the murder of Washington Post journalist Jamal Khashoggi, by investing in sports.
“If Ford and GM were to combine in this way, there’d be a DOJ investigation... conceivably the Department of Justice could block it,” Blumenthal said in an interview with HuffPost. “There are a variety of steps they could take short of blocking it, like require certain conditions, but I think an investigation is certainly well merited.”
Tim Wu, a professor at Columbia University who previously served as a top antitrust adviser to President Joe Biden, also suggested the deal could face regulatory scrutiny.
“I’m not sure what antitrust lawyers advised the PGA-LIV deal but just who would advise waving a red cape in the face of this Justice Dept?” Wu tweeted.
The deal happened with stunning speed, and Bloomberg reported Tuesday no antitrust lawyers were involved in its culmination.
The American Economic Liberties Project, a progressive antitrust group, noted the rise of LIV Golf led to higher tournament prizes.
“The consequences for golfers and their fans could be devastating and stunt innovation in the sport,” said Katherine Van Dyck, the group’s senior legal counsel. “Unless Congress grants this new venture some sort of antitrust exemption, there is no way this deal would survive legal scrutiny. Antitrust enforcers in the United States, Europe, and the U.K. have a clear path to block it.”
Congress has granted limited antitrust exemptions to the big four American professional sports leagues: the National Football League, National Basketball Association, National Hockey League and Major League Baseball.
Another government body that could get involved in reviewing the merger is the Committee on Foreign Investment in the United States or CFIUS. The U.S. Treasury-led panel oversees transactions involving foreign investment in the United States to determine their impact on national security.
“It seems like another classic case for CFIUS,” Sen. Chris Murphy (D-Conn.) said. “It seems tailor-made for a process that tries to get to the bottom of what the Saudis are getting out of this.”
Sen. Mitt Romney (R-Utah) similarly suggested that CFIUS could take a look at the deal.
“Now that Saudi Arabia is looking at soccer, that gives me concern,” Romney said.
Beyond golf, soccer has been the most visible target of Saudi sportswashing attempts. In recent days, the country has spent hundreds of millions to draw French soccer superstars N’Golo Kante and Karim Benzema to the country’s domestic league, though Inter Miami frustrated their efforts to star global superstar Lionel Messi. The Public Investment Fund has also purchased Newcastle United, a team in the English Premier League, and poured tens of millions into the club’s budget.
White House officials have repeatedly declined to weigh in on the matter this week. “We’re going to let the two parties speak for themselves,” White House press secretary Karine Jean-Pierre told reporters on Wednesday. Both Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell declined to weigh in on the merger.
When asked about the merger on Tuesday, according to a pool report, Biden pantomined swinging a golf club and said only: “I’m planning on playing in the PGA.”