Details are beginning to emerge about the ongoing merger controversy that is rocking the world of professional golf.
Key Details
- On June 6, PGA Tour commissioner Jay Monahan announced a merger with Saudi-backed LIV Golf and Europe’s DP World Tour.
- In the following weeks, multiple Congressional and Department Of Justice statements confirmed that prominent Democratic politicians are eager to scrutinize, investigate, and penalize the merger.
- On Tuesday, CNBC released a five-page memo revealing details about the proposed merger, noting that the three entities plan to create a for-profit subsidiary of PGA Tour that will manage commercial assets for tours, leaving PGA Tour to manage competitions.
- PGA Tour will be given a permanent controlling interest over the new entity’s board of directors.
- Also Tuesday, PGA Tour held a policy board meeting in Detroit, discussing the ongoing litigation surrounding the merger, particularly over disagreements with LIV Golf.
Why It’s Important
After three weeks of controversy, the first details of the PGA Tour’s plans are beginning to come into focus. This has not stopped federal scrutiny, as a Senate hearing is still scheduled to be held on July 11 to discuss the state of the merger with representatives from all three entities.
The merger has brought condemnation from the government due to its association with Saudi-Arabian politicians with records of human-rights violations. LIV Golf is controlled in part by the Saudi Crown Prince Mohammed bin Salman, who has been accused of attempting to use the league to improve his country’s image.
The Problems
The deal could still fall apart for non-governmental reasons. Both PGA Tour and LIV have active outstanding litigation filed against each other over anti-trust violations, in addition to multiple lawsuits, which were discussed at Tuesday’s meeting, CNBC notes.
“Management, with input from our Player Directors, has now begun a new phase of negotiations to determine if the tour can reach a definitive agreement that is in the best interests of our players, fans, sponsors, partners, and the game overall,” says a Tuesday statement from PGA Tour spokesman.
If the deal falls through, PGA Tour stands to face the scrutiny of its own players. The lack of a deal could place PGA Tour in a funding nightmare that shakes many of its players’ faith in the organization. Many players could leap towards other leagues like LIV for better financial opportunities, Yahoo Sports notes.
Notable Quote
“I would say I felt appreciation that we got to this point where we’re working together because it makes me confident with where the game of golf is headed in the future. We felt like it would be about two years roughly before we got to that point. It took a year and a half or six months quicker than I thought it would be,” says LIV player Phil Mickelson, who broke his silence on the matter in a statement to ESPN last week.
