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Mark Schlabach, ESPN Senior Writer
LOS ANGELES — Two U.S. senators are urging Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter to scrutinize the PGA Tour’s planned alliance with the DP World Tour and Saudi Arabia’s Public Investment Fund and to oppose the deal if it reduces competition in violation of federal antitrust laws.
In a letter sent to Garland and Kanter on Tuesday, a copy of which was obtained by ESPN, Sens. Elizabeth Warren, D-Mass., and Ron Wyden, D-Ore., wrote that although details of the proposed alliance are unclear, “the red flags regarding antitrust concerns are clear.”
The senators wrote that the proposed alliance “enable[s] the Saudi government’s efforts to ‘sportswash’ its egregious human rights record” and “raises an array of potential legal and regulatory issues, including relating to the PGA Tour’s non-profit tax status and antitrust law.”
According to Warren and Wyden, they have previously voiced their concerns about the Saudi monarchy’s history of “atrocious” human rights violations, including allegations that it “routinely harasses and harshly prosecutes individuals for peaceful expression or association; executes individuals (including children) for robbery and drug-related crimes after rigged trials, increasingly including through mass executions; and directed the extrajudicial murder of U.S. resident Jamal Khashoggi,” a Washington Post journalist.
The senators noted that the PGA Tour, in a federal countersuit filed against the LIV Golf League, which is being financed by Saudi Arabia’s sovereign wealth fund, argued to a federal judge that “LIV is not a rational economic actor, competing fairly to start a golf tour. It is prepared to lose billions of dollars to leverage [U.S. golfers] and the sport of golf to ‘sportswash’ the Saudi government’s deplorable reputation for human rights abuses.”
“The PGA-LIV deal would make a U.S. organization complicit — and force American golfers and their fans to join this complicity — in the Saudi regime’s latest attempt to sanitize its abuses by pouring funds into major sports leagues,” the senators wrote.
In the letter, the senators argued that the proposed new entity, which would combine the commercial activities of the PGA Tour and PIF, violates sections of the Clayton Act and the Sherman Antitrust Act, which prohibit the restraint of trade and commerce and unlawful corporate mergers and acquisitions that result in monopolies.
“The PGA-LIV deal, as described in the June 6 announcement, would be a clear violation if it is a joint venture,” Warren and Wyden wrote. “It would give the PGA Tour and PIF control over all significant aspects of U.S. commercial golf operations, including contracts with U.S. golfers and their opportunities to compete, television rights, cost of attendance to elite golf events, and merchandise.”
The Department of Justice had previously opened an investigation into the PGA Tour’s alleged monopolistic business practices, some of which were outlined in a federal antitrust lawsuit filed in August by 11 golfers who were suspended by the tour for competing in LIV Golf tournaments without conflicting-event releases.
Sen. Richard Blumenthal, D-Conn., notified PGA Tour commissioner Jay Monahan and LIV Golf CEO and chairman Greg Norman in letters Monday that the Senate’s Permanent Subcommittee on Investigations, which Blumenthal chairs, had opened a review of the planned alliance. The PGA Tour and LIV Golf League have until June 26 to produce documents requested by the committee.
On Wednesday, Warren and Wyden argued that the planned deal is no different from a recent attempted merger between American Airlines and JetBlue Airways. Last month, a federal judge ordered the airlines to end their alliance.
“The PGA-LIV deal would make a U.S. organization complicit — and force American golfers and their fans to join this complicity — in the Saudi regime’s latest attempt to sanitize its abuses by pouring funds into major sports leagues.”
Sens. Elizabeth Warren and Ron Wyden, in letter to attorney general
The proposed golf partnership, according to the senators, would violate Section 2 of the Sherman Act, which makes it illegal “to monopolize any part of … trade or commerce.” Last week, Monahan told reporters that the deal would allow his tour to “take the competitor off the board” and “to be able to control the direction going forward.”
“A merger also would give the newly formed entity monopsony power over golfers,” Warren and Wyden wrote, with “monopsony” describing when one entity has a disproportionate influence on the market. “When LIV was still a threat to the PGA Tour’s dominant position over golf tournaments in the United States, the two were in fierce competition for golfers and offered increasingly higher tournament prizes as a result. This merger-to-monopoly intentionally eliminates LIV as a potential competitor and would likely cause the new entity to reverse the pattern of newly increased tournament prizes for its golfers.”
After initially describing its agreement with the DP World Tour and PIF as one that would “merge commercial operations under common ownership,” the PGA Tour later altered the language and removed the word “merger” in the headline of a news release that announced the deal.
“While the PGA Tour apparently has attempted to backtrack from its initial statement by removing the word ‘merge’ from the press release announcing the deal, its impacts cannot be erased: it would result in a monopoly over professional golf operations in the U.S. and potentially beyond,” the senators wrote.
In a letter to U.S. senators Friday, Monahan said the federal government’s inaction regarding Saudi Arabia’s entry into professional men’s golf caused him to agree to the controversial partnership.
“While we are grateful for the written declarations of support we received from certain [congressional] members, we were largely left on our own to fend off the attacks, ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia,” Monahan wrote. “This left the very real prospect of another decade of expensive and distracting litigation and the PGA Tour’s long-term existence under threat.”