PGA officials were in the hot seat on Tuesday as they faced lawmakers questions about the tour’s abrupt reversal that led to a deal with Saudi-backed rival LIV, despite months of criticism over the human rights record of the Saudi gpvernment.
At a hearing of the Senate Homeland Security Permanent Subcommittee On Investigations, PGA COO Ron Price, pressed to provide an estimate of just how much the Saudi Arabian Public Investment Fund would contribute to a new entity, said that “north of $1 billion” was being discussed, but that negotiations on a final agreement were ongoing.
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Price and Jimmy Dunne, board member of the PGA Tour, said that the new entity would still be controlled by the PGA. They each stressed to lawmakers that the PGA decided to enter into the agreement rather than face years of litigation and a division among its athletes, as well as the threat posed by the rival LIV league, backed with $800 billion in assets.
But Sen. Richard Blumenthal (D-CT), the chairman of the subcommittee, blasted the deal, saying that it was “about much more than a game of golf. It’s about how a brutal, repressive regime can buy influence, indeed take over, a cherished American institution.”
The deal came as a surprise when it was announced in June, given the intensity of the animosity between the pro tours as well as the rhetoric from PGA Commissioner Jay Monahan. The proposed union came as a surprise even to many top PGA Tour players, notably Rory McElroy and others who had publicly assailed LIV.
Blumenthal announced an investigation, saying that the “sudden and dramatic reversal” of the PGA’s position “raise serious questions regarding the reasons for and terms behind the announced agreement.”
Under the terms of the deal, the Saudi Public Investment Fund will invest in a new subsidiary of the PGA Tour, which is still unnamed and will be a for-profit entity. The PGA will control a majority of board seats of the new entity, with the PIF a minority investor. Monahan will serve as CEO of the new venture.
Over the weekend, Randall Stephenson, the former chairman and CEO of AT&T, resigned from the policy board of the PGA over the weekend, writing that he opposed the deal. The Washington Post reported that Stephenson wrote in a letter that the framework agreement “is not one that I can objectively evaluate or in good conscience support, particularly in light of the U.S. intelligence report concerning Jamal Khashoggi in 2018.” Khashoggi was The Washington Post columnist and Saudi dissident who was murdered at the Saudi consulate in Istanbul.
Tuesday’s hearing was held in one of the Senate’s largest meeting rooms, and families of 9/11 victims, critical of the PGA-LIV deal, wore golf hats with the words “9/11 Justice” on them.
Blumenthal raised concerns that the agreement framework included a non-disparagement clause, and pressed the two PGA officials to make a commitment that the final deal “will not prevent players or executives from commenting or criticizing the kingdom of Saudi Arabia.” Price and Dunne said that they would not recommend such a deal point to the PGA policy board.
Sen. Ron Johnson (R-WI), the top Republican on the committee, was sympathetic to the PGA’s position against the much better funded LIV. “From a commercial standpoint, it is not a fair fight,” he said. “And the PGA Tour accurately viewed LIV as a existential threat.”
He added, “Sports washing is also a legitimate issue, but no amount of money can wash away the stain of the brutal Khashoggi assassination and other human rights abuses. But it would be grossly unfair to expect the PGA Tour to bear the full burden of holding Saudi Arabia accountable. After all, anyone who drives a car or uses oil based products has helped fill the coffers of the Saudi Public Investment Fund.”
More to come.
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