(Washington) Saudi Arabia’s sovereign wealth fund could invest more than $1 billion in the proposed alliance between its circuit, LIV Golf, and the PGA. So said a PGA executive before a US Senate committee in Washington. But the proposed merger has sparked mistrust and outrage at the growing influence of Saudis in world sport.
Responding to sometimes hostile, sometimes accommodating questions, PGA Chairman and CEO Ron Price told senators that the Saudi investment in the new circuit has yet to be finalized. Ongoing “discussions” could, however, lead to an investment “in excess of 1 billion”, he said.
This statement – during a hearing that sometimes reflected Congress’s unease at the tsunami of foreign money in golf – reveals the extent of Saudi ambitions in international sport, already visible in soccer and Formula 1. However, the hearing also showed the vagueness of the framework agreement which has upset professional golf since its announcement on June 6.
The agreement in principle is little more than a draft for the creation of a new company uniting the activities of the LIV Golf, PGA and DP World (formerly European Circuit) circuits. But apart from the commitment to end litigation, the agreement contains few firm commitments. The parties hope to reach a real contract by the end of the year.
Speaking to the Senate Permanent Subcommittee on Investigation on Tuesday, Mr. Price said, “Usually you don’t negotiate a contract in public, but we are committed to trying to move from a framework agreement to a final agreement. »
According to Price, the success of the deal is essential to the survival of the PGA Tour, which weighs a fraction of the value of the investment fund. According to PGA estimates, the legal costs and tenfold increase in purses to retain the best would quickly become unsustainable.
“We knew a long-term fight would be harmful,” Dunne said during the hearing, which took place in a packed room in the Capitol that has previously hosted confirmation hearings from the Supreme Court and the Supreme Court. 9/11 Commission.
PGA Tour executives have argued that the deal, while tentative, puts them in a position to handle the day-to-day operations of professional golf. Tour Commissioner Jay Monahan has been named CEO of the new company, which is expected to be called PGA Tour Enterprises, and the Tour is expected to hold a majority of the company’s board seats.
MM. Price and Dunne were much less eager to explain how future PGA Tour Enterprises chairman Yasir al-Rumayyan, who leads the Saudi fund, will act. They were less likely, too, to explain the implications of a deal granting broad investment rights for the Riyadh-based fund that has grown in power and value in recent years.
It is not certain that a final agreement will be reached. Last Saturday, a member of the PGA Tour board of directors, the former CEO of AT
The framework agreement has already prompted two Senate investigations, a bill in the House of Representatives to revoke the PGA Tour’s tax exemption and Tuesday’s hearing. The hearing, however, showed that the opposition in Congress can do little more than serve as a platform for grievances: Senators even disagreed on whether or not the procedure was useful.
Connecticut Democratic Senator Richard Blumenthal has criticized the PGA for its recent flip-flop, which condemned Saudi money in golf just a few weeks ago.
“You capitulated because of the money,” Mr. Blumenthal, chairman of the subcommittee, told Messrs. Price and Dunne. He also denounced the “hypocrisy” and power of money, which can “induce individuals and institutions to betray their values and their supporters”, or which, perhaps, reveals the very absence of these values. . Other sports and institutions “could fall prey, if their leaders only think about money,” he added.
Other elected officials have been more conciliatory. Wisconsin Republican Senator Ron Johnson said there was “nothing wrong with the PGA Tour negotiating its survival.”