The PGA Tour announced its shocking new deal with LIV Golf Tuesday by issuing a press release under a bold headline that said it would “merge commercial operations under common ownership.”
That description and other details in the release led news outlets around the world to call it a “merger.” But by the end of the day Tuesday, that headline and that word – “merge” – were removed from that press release on the PGA Tour website.
And now the PGA Tour is saying its deal with LIV Golf and the DP World Tour is not a “merger.”
“I know it’s been called a merger as shorthand, but that is not accurate,” PGA Tour spokeswoman Laura Neal said in an email Thursday to USA TODAY Sports. “PGA TOUR Inc. remains intact as it was prior, as a 501c6 (tax-exempt organization). We have created a separate, commercial entity – underneath that structure.”
She said this entity will include the Tour’s commercial assets, the European DP World Tour, LIV Golf and other golf-related commercial businesses of the Saudi Arabian Public Investment Fund (PIF).
The same press release still says the agreement “combines” those businesses and rights into a “new collectively owned, for-profit entity.”
So isn’t that still a merger? And what does it matter anyway?
It depends whom is asked.
When is a merger not a ‘merger?’
The simple dictionary definition of “merge” is to combine into one. A merger is “any of various methods of combining two or more organizations,” according to Merriam-Webster’s dictionary.
Meanwhile, the same PGA Tour press release (now without the word “merge”) still says these businesses are being “combined” into one.
“The new entity (name TBD) will implement a plan to grow these combined commercial businesses,” the release stated.
That still doesn’t make it a merger to some who echo the Tour’s company line.
“This is NOT a ‘merger,’ ” Tour golfer Michael Kim said on Twitter. He said the Tour “still controls how and where the money goes.”
Golf.com also posted a “public service announcement” on Twitter Wednesday that said, ”The PGA Tour and DP World Tour did not merge with LIV Golf. They partnered up with the PIF.”
PGA Tour commissioner Jay Monahan also never used the words “merge,” “merger” or “combine” in a news conference about the deal Tuesday. He referred instead to being “partners” even though the press release quoted him as saying the partnership “combines” those businesses and assets.
So what’s going on here?
There are sensitivities related to government scrutiny of this deal for antitrust reasons, legal experts told USA TODAY Sports. Last year, LIV Golf and several golfers sued the PGA Tour for alleged antitrust violations, calling it a monopoly throughout their 118-page complaint. The U.S. Department of Justice also had been looking into possible anticompetitive practices of the PGA Tour after the Tour tried to fend off LIV Golf as a rival league and punish players for joining it.
By merging, the new combination could dominate golf and become an even bigger target for antitrust regulators, who could try to block or delay the deal.
Therefore the PGA Tour might like to avoid calling it a “duck,” even if it still quacks, walks and looks like one.
“The word ‘merger’ for antitrust purposes means both merger and acquisition,” Baruch College law professor Marc Edelman told USA TODAY Sports Thursday. “So, for antitrust purposes, none of this matters. It’s still an antitrust merger. This is what happens when you play telephone. The lawyers talk to business people who talk to the PR folks, who talk to the media. By that many steps down the road, the message is gibberish as the speaker doesn’t even understand the relevance.”
Penn State law professor Steve Ross called it “semantics” and noted there are “slight” differences in the proof the government needs to challenge mergers under Section 7 of the Clayton Act and agreements between rivals under Section 1 of the Sherman Act.
What about that press release?
USA TODAY Sports asked the PGA Tour about removing the word “merge” from a secondary headline in its initial press release.
Neal of the PGA Tour said she hadn’t been aware of the removal and asked her digital team about it. She said that team replied by saying it was simply an editorial decision to unclutter the page and avoid redundancy.
“We removed it because it basically said the same thing as the (main) headline,” the team said.
The main headline above it read, “PGA TOUR, DP World Tour and PIF announce newly formed commercial entity to unify golf.”
The Saudi Arabian PIF behind LIV Golf still is using the original press release with the word “merge,” as of Thursday afternoon.
And while speculation abounds about whether LIV Golf will continue to exist, that appears to be up to the board of directors of the new entity, which itself is a combination of the PGA Tour and the Saudi PIF, with PIF Governor Yasir Al-Rumayyan set to become chairman and Monahan the CEO, according to the press release.
The release said the PGA Tour still will appoint a majority of the board, while the PIF will initially be the “exclusive investor in the new entity, alongside the Tour, LIV Golf and the DP World Tour.” The PIF also will have a right of first refusal on any capital that may be invested in the new entity, including into the PGA Tour, LIV Golf and DP World Tour, the release stated.
Follow reporter Brent Schrotenboer @Schrotenboer. Email: bschrotenb@usatoday.com
