The Department of Justice will investigate the announced deal between the PGA Tour and Saudi-funded LIV Golf, according to a report by The Wall Street Journal on Thursday.
The newspaper reported that the Justice Department has already notified the PGA Tour of its intention to review the deal, citing antitrust concerns. The investigation, though expected, figures to prolong the proposed alliance between the PGA Tour, LIV Golf and the Europe-based DP World Tour − and, in theory, could upend the deal altogether.
A spokesperson for the Justice Department, which had previously been investigating the PGA Tour for possible anticompetitive practices in the wake of LIV’s emergence last year, declined to comment. A PGA Tour spokesperson did not immediately reply to an email from USA TODAY Sports seeking comment.
The Justice Department’s interest in the proposed merger, which would bring two of the largest factions in men’s professional golf under a singular corporate umbrella, follows an intense and expensive legal battle between the parties. LIV Golf sued the PGA Tour last year and has claimed, among other things, that the PGA Tour is a “monopoly power.”
The Justice Department review also comes amid a string of similar inquiries from Congress − including a new probe from the Senate’s finance committee.
Live Leaderboard: US Open Tournament Scores, Schedules, Pairings and More
The commitee’s chairman − Sen. Ron Wyden, D-Ore. − announced Thursday that the committee would be opening a “wide-ranging investigation” into the proposed merger between the golf tours, including several issues pertaining to Saudi Arabia’s Public Investment Fund (PIF), which will effectively bankroll the newly-created company.
STAY UP-TO-DATE: Subscribe to our Sports newsletter now!
In a letter to PGA Tour commissioner Jay Monahan and policy board chair Ed Herlihy, Wyden also asked the tour to provide information about how its executives will be compensated following the merger, while raising questions about a possible conflict of interest involving Herlihy, a prominent mergers and acquisitions attorney. Wyden’s letter asks, specifically, whether Herlihy’s firm Wachtell, Lipton, Rosen & Katz is representing the PGA Tour in the proposed deal − and, if so, how much it is being paid for those services.
“I have serious questions about any compensation arrangements, formal or informal, proposed as part of this merger framework intended to personally and financially benefit the already lavishly-compensated officers and employees of the PGA Tour,” Wyden wrote in the letter.
Sen. Richard Blumenthal, D-Conn., announced a separate but similar investigation into the proposed deal earlier this week. Blumenthal is chairman of the Senate’s permanent subcommittee on investigations.
Both probes cited Saudi Arabia’s track record of human-rights abuses, while asking questions about how, or whether, the PGA Tour will maintain its tax-exempt status following the merger. The PGA Tour has said it will remain a 501c6 (tax-exempt organization) even following the deal with LIV Golf.
Contact Tom Schad at tschad@usatoday.com or on Twitter @Tom_Schad.
