WASHINGTON – US lawmakers began an investigation on Thursday into the shock merger of the PGA Tour and the DP World Tour with the Saudi backers of LIV Golf, taking aim at tax breaks.
US Senate Finance Committee chairman Ron Wyden, a Democrat from Oregon, sent a letter to PGA Tour commissioner Jay Monahan and other tour leaders asking for the same thing many players seek – details about the new deal. Mr Wyden also raised concerns over Saudi Arabia’s human rights issues.
“The PGA Tour’s involvement with PIF (Saudi’s Public Investment Fund) raises significant questions about whether organisations that tie themselves to an authoritarian regime that has continually undermined the rule of law should continue to enjoy tax-exempt status in the United States,” he wrote.
“In addition, I believe it is critical that lawmakers understand what risks this arrangement may pose to America’s national interests, particularly with respect to foreign investment in US real estate, such as locations neighbouring military facilities or sensitive manufacturing centres, and how you plan to mitigate those risks.”
Mr Wyden’s inquiry came on the same day the Wall Street Journal reported that the US Department of Justice has started a review on the planned merger over antitrust concerns.
On Monday, US Senate sub-committee on investigations chairman Richard Blumenthal informed Monahan and LIV chief commissioner Greg Norman his panel had started an inquiry as well over antitrust issues.
That had been among the issues in a legal fight between the PGA Tour and LIV Golf that was due for court next May, but duelling lawsuits were wiped out under terms of the merger deal.
The PGA Tour would remain a non-profit organisation while the PIF would be the investors in a connected for-profit group, in which equity would reportedly be rewarded to players who stayed with the PGA Tour rather than jumping to record purses and guaranteed deals from LIV Golf.
Monahan, who is on medical leave, has been criticised over the hypocrisy of scolding the Saudis and players who joined LIV Golf only to partner with them, something he said he did for the good of the sport to end the PGA-LIV feud.
“The details that have emerged about the merger agreement thus far also raise broader questions about the appropriateness of the continued tax exemption of the PGA Tour,” Mr Wyden added.
“It’s incumbent on Congress to review whether the tax exemption provided to sports leagues is appropriate in the case of a foreign autocracy seeking to acquire substantial influence in a US sports institution for the clear purpose of trying to cleanse the regime’s public image.”
Mr Wyden, who seeks a reply by Friday, wants to know about compensation for PGA Tour officials under the deal, noting that Monahan made nearly US$14 million (S$18.7 million) in 2021 under recent tax filings and more than US$63 million was spent for “top staff” by the PGA Tour.
“I have serious questions about any compensation arrangements intended to benefit the already lavishly compensated officers and employees of the PGA Tour.
“It is difficult to rationalise how any further increases in compensation would be in the best interest of the PGA Tour or further the tour’s tax-exempt purpose.” AFP, REUTERS
