At the beginning of June, the leading golf organizations PGA Tour (USA) and DP World Tour (Europe) announced their merger with the Saudi Arabian series LIV Golf. The deal is not yet complete because the PGA board has to approve the merger. But hardly anyone doubts that it will finally be sealed. Unless the US Senate hearing in Washington, which sheds more light on the deal, creates enough pressure on the PGA to back out. Nothing is unthinkable. After all, six months ago nobody would have thought that the opposing organizations would even consider merging.
In addition to statements from PGA managers, emails and chat histories were available to the Senate committee to understand how the deal came about. The picture they painted is clear: Saudi Arabia has bought an entire sport with the help of its sovereign wealth fund PIF (Public Investment Fund) using extortionate methods and the use of almost unlimited financial resources.
“You can still fight the ‘sportswashing’, the Saudi monarchy, and hundreds of billions of dollars,” Democratic Party presiding Senator Richard Blumenthal appealed to the PGA. The senator made no secret of his contempt for the business: “It stinks a bit about the path we have taken because it is a capitulation, because it’s all about money,” he said.
Blumenthal, in his capacity as head of the Senate Standing Subcommittee on Investigations, initiated the review of the publicly puzzling process in the first half of June.
PGA, DP World Tour on the one hand and LIV Golf on the other unexpectedly merged early last month after more than a year of heated arguments over influence, players and tournaments. With the almost sensational agreement between the unequal partners, all disputes between the two camps ended in court. Suddenly, the allegations of human rights violations in the Arab country no longer played a role.
The Senate hearing also provided an initial assessment of the financial dimensions of the merger. When asked, Jimmy Dunne, one of the key negotiators from the PGA board in the negotiations with the Saudis, estimated the investment in the future competition format promised by PIF representatives at “more than one billion dollars”.
Dunne pointed out that the PGA had practically no chance against the financial power of the Saudi fund PIF. Without the deal, Dunne said, the future would have been clear: “If they just buy five players from us every year, they’ll take us out completely. They have endless money.” The legal costs that the PGA would have incurred in the dispute with the PIF alone would have led to bankruptcy. The result would have been a hostile takeover.
Sources: “n-tv”, “Süddeutsche Zeitung”, document from the US Senate.
