U.S. Dept. of Justice said to probe PGA-LIV merger
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The Justice Department has notified the PGA Tour that it will review its merger agreement with Saudi Arabia's LIV Golf over antitrust concerns, the Wall Street Journal reported on Thursday.
Why it matters: The review adds another potential obstacle to the agreement, and likely extends the time with which the two sides were hoping to close it.
Of note: Indeed, the Washington D.C. pushback against the deal is gaining steam.
- In addition to the DOJ, the volume of noise coming from Democratic lawmakers over the deal's antitrust concerns and ties to the Saudi kingdom is growing.
Of note: When the deal was announced, Saudi Arabia's Public Investment Fund governor Yasir Al-Rumayyan said it would take a few weeks to complete. The WSJ reported that closing the deal could take at least a year, citing an anonymous PGA Tour executive.
- The DOJ and LIV declined to comment. The PGA did not immediately return a call seeking comment.
Zoom in: Three Democratic senators have either opened investigations into the deal or pushed the Department of Justice to scrutinize it.
- In a joint letter to Attorney General Merrick Garland and DOJ antitrust chief Jonathan Kanter, Sens. Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.) wrote the deal "would make a U.S. organization complicit" in the Saudi's efforts to "sportswash" its human rights abuses, as well as "have a substantial adverse impact on competition, violating several provisions of U.S. antitrust law."
- Specifically, the senators argued the proposed deal violates two provisions of the Sherman Act and another provision of the Clayton Act.
- On Monday, Sen. Richard Blumenthal (D-Conn.) opened an investigation into the deal over concerns that a foreign government would have control over a major U.S. institution.
- The proposed arrangement has also been met with criticism by Sen. Chris Murphy (D-Conn.) and Rep. Chip Roy (R-Texas).
The other side: The PGA Tour has stressed to Congress that it does not consider its deal with LIV to be a merger.
- "Let me be clear that despite numerous reports, this arrangement is not a merger between the PGA TOUR, LIV Golf, and the PIF," PGA Tour commissioner Jay Monahan wrote in a letter to Congress last week, shortly after the deal was announced. The PIF "will be a minority investor in the new commercial entity, while the PGA Tour will be the majority equity investor."
- In a follow-up statement sent this week, a PGA Tour spokesperson said, "We are confident that once Congress learns more about how the PGA Tour will lead this new venture, they will understand the opportunities it creates for our players, our communities, and our sport while protecting the American institution of golf."
The bottom line: Despite Al-Rumayyan's wishes, this deal is far from being done. And now he has to finish it without one of the deal's chief architects.
Editor's note: This story was updated to reflect that LIV declined to comment.
