Calling Saudi Arabia “the dominant owner” and telling PGA Tour COO Ron Price and policy board director Jimmy Dunne that Saudi money “is the reason why you surrendered,” Sen. Richard Blumenthal (D-Conn.) set the tone for Tuesday’s sometimes acrimonious hearing about the future of men’s professional golf.
Members of the Permanent Subcommittee on Investigations, part of the Homeland Security and Government Affairs Committee, grilled Price and Dunne about why the PGA Tour, despite sharply criticizing LIV’s Saudi ties and suggesting golfers who joined LIV were disloyal, nonetheless struck a deal with the rival golf league’s funder, Saudi Arabia’s Public Investment Fund (PIF), which is backed by more than $700 billion.
Price and Dunne largely kept to the same overarching talking point: Even though the PGA Tour was decisively winning its litigation with LIV, it could not economically compete with LIV over the long run. Cutting a deal with Saudi Arabia, they put it, was the only way to stop an “existential threat” from materializing and ending opportunities for golfers, tournaments and PGA Tour-affiliated charities.
Price and Dunne, along with Sen. Ron Johnson (R-Wisc.), repeatedly described LIV as an “irrational economic” actor since it could compete at a massive financial loss and without a profit motive. To that point, LIV could offer golfers much more money and, backed by hundreds of billions of dollars, LIV could essentially keep doing that forever, regardless of the lawsuit’s outcome.
Dunne bluntly opined, “LIV could have destroyed us,” especially since the PGA Tour and LIV were competing over “only a couple of hundred of players” who are good enough to play at the highest level. The PGA Tour’s success in the litigation, Dunn and Price explained, gave it some leverage in talks with LIV and PIF governor Yasir Al-Rumayyan.
Two senators in particular, subcommittee chair Blumenthal and Sen. Josh Hawley (R-Mo.), seemed decidedly unpersuaded by Price and Dunne.
Blumenthal warned that if sports leagues are “going to sell out to countries that can throw out hundreds of billions of dollars,” those leagues will sacrifice democratic values and institutional norms.
He chastised the PGA Tour for partnering with a country led by “an autocratic, repressive regime” that “kills its own people.” Blumenthal says there is “mounting evidence” the Saudi government was complicit in the Sept. 11 terrorist attacks.
Blumenthal also unfavorably compared the PGA Tour to the NBA, which “stood by Daryl Morey” after he retweeted a post promoting democracy in Hong Kong “even though China imposed serious costs” on the NBA.
Blumenthal spent considerable energy asking Price and Dunne about the role of nondisclosure agreements in the arrangement with LIV and PIF.
He noted the deal appears to contemplate NDAs that would bind what golfers can publicly say. Blumenthal pressed the two men for assurances that golfers can “speak out” on Saudi human rights and LGBTQ matters without risk of being punished since those statements might violate Saudi law. Price attempted to downplay that concern as unrealistic and emphasized the PGA Tour is committed to free speech. But he couldn’t supply Blumenthal—who repeatedly said the Saudis will have control because of their role as funders—with such an assurance.
Blumenthal also pressed for specificity on the amount of money Saudi Arabia would provide. Price said the number is being negotiated, but it projects to be “north of one billion dollars.”
Hawley struck a similar tone in his questioning, except his focus was on the PGA Tour’s ties to China. Hawley repeatedly asked about PGA Tour China, which the PGA Tour has previously described as part of a 20-year agreement between itself and China to hold events in China. The deal, which was struck in 2017 and involved an investment from Yao Ming’s private equity firm, contemplated a payment of $45 million to the PGA Tour, according to Hawley. Hawley questioned why the arrangement is not detailed in 990 forms the PGA Tour must file as a tax-exempt 501(c)(6) entity.
In response to Hawley, Price said the PGA Tour has not had an active relationship with Chinese partners since 2019, has no plans to resume one and is not receiving money. Hawley wasn’t convinced. He asked if the suspension in the relationship was only because of the COVID-19 pandemic rather than a move to walk away from the business relationship. Price didn’t offer a clear explanation.
Like Blumenthal, Hawley underscored the dangers of American sports leagues doing business with adversary countries. Hawley questioned why the PGA Tour would partner with China when it has ”evil policies” and ”treats its own people as slaves.” Hawley also talked about China’s response to Morey’s tweet to say the country’s communist government “has systematically attempted to use U.S. sports organizations as leverage” and for “sportswashing.”
Senator Alex Padilla (D-Calif.) also pressed Price and Dunne on the impact of their dealings for golfers.
“What about the players?” Padilla asked. He demanded to know whether PGA Tour players “who were loyal” to the PGA Tour will “be made whole.” Padilla further wanted to know what will happen to the PGA Tour golfers who left for LIV.
In response, Price cautioned there is no final deal, and he separately mentioned antitrust regulators are studying it. But Price noted that there are task groups studying potential compensation for golfers who were loyal. As to golfers who left the PGA Tour, Price said they would need to follow established procedures for seeking re-admission.
Other senators were more supportive of the PGA Tour or critical of the hearing taking place.
Johnson defended the PGA Tour’s decision as necessary to keep the league going and called it a “win-win” for all involved. He added he would rather see Saudi Arabia partner with the U.S. than with Russia or China.
Sen. Rand Paul (R-Ky.) suggested the hearing was a waste of the Senate’s time and a reflection of mistaken priorities. He questioned why the subcommittee would hold a hearing on private golf leagues forming a union when it held no hearing for a recent sale of hundreds of millions of dollars’ worth of U.S. arms to Saudi Arabia.
The hearing also revealed that LIV CEO Greg Norman will be out of a job if the deal goes through. Price confirmed the contents of what Blumenthal termed a “side agreement” in that, as Price put it, “if we move to a definitive agreement, the LIV Golf assets of which Greg Norman is currently the commissioner will move” to a subsidiary controlled by the PGA Tour. It’s unclear if and how Norman would be compensated in that transaction.
