PGA Tour is now facing investigation from the Department of Justice, after announcing its intention to merge with Saudi-owned LIV Golf.
Key Details
- On June 6, PGA Tour commissioner Jay Monahan announced a merger with LIV Golf.
- On June 7, Representative John Garamendi (D-CA) proposed the No Corporate Tax Exemption For Professional Sports Act in retaliation.
- On June 12, Senator Richard Blumenthal (D-CT) opened a congressional inquiry into the details of the merger.
- On June 15, the Justice Department announced that it will investigate the merger over antitrust concerns, The Wall Street Journal reports.
- Additionally, Senator Ron Wyden (D-OR) announced plans on Thursday for a large investigation that could affect PGA Tour’s 501(c)(6) tax-exempt status.
- PGA Tour commissioner Jay Monahan is currently on a leave of absence due to a “medical crisis.”
- PGA Tour released a statement late on Thursday defending the merger.
Why It’s Important
PGA Tour has faced nearly two weeks of intense federal scrutiny over its decision to attempt to merge with LIV Golf, with many figures in government concerned that pairing an American sports league with a Saudi-backed company would compromise the integrity of a valued American brand, placing it in alignment with a foreign government infamous for human-rights abuses.
As we previously reported, 501(c)(6) status does not indicate that PGA Tour is a charitable organization, but it does operate as a non-profit organization that publicly discloses its revenues. Partnering with Saudi Arabia creates concerns about transparency. Representative Garamendi’s bill threatens to strip PGA Tour of its tax status.
The government’s antitrust measures and inquiries have already begun to bog down the process, with PGA Tour executives telling their employees that these obstacles could slow the merger for at least a year. PGA Tour says it sees the deal as a means of stabilizing the sport between multiple competing leagues. However, it still faces intense pressure from the U.S. government, which will most certainly attempt to stop the deal from moving forward without intense transparency and compliance.
“We are confident that once all stakeholders learn more about how the PGA Tour will lead this new venture, they will understand how it benefits our players, fans, and sport while protecting the American institution of golf,” says a representative of the PGA Tour.
