PGA Tour defends LIV Golf deal in Senate hearing

The PGA Tour on Tuesday defended its controversial deal with the Saudi-backed LIV Golf league before senators, as scrutiny of the agreement intensifies.

PGA Tour operating chief Ron Price and policy board independent director Jimmy Dunne testified Tuesday before the Senate Homeland Security Committee’s investigations subcomittee, while representatives from LIV Tour and Saudi Arabia’s Public Investment Fund weren’t present.

LIV CEO Greg Norman is out of the country, according to a spokesperson. A representative for the subcomittee said it is preparing to hear testimony from Norman as well as tour golfers in the future.

Dunne and Price said they believed the PGA Tour would benefit the most from the proposed deal. Dunne said that if a deal were to get done, the tour would “definitely stay intact and becomes more powerful,” and added he hoped PIF Governor Yasir Al-Rumayyan would have “a more productive role in the game of golf” in a more constructive way.

Price also said the tour didn’t seek out the Saudis. “We are in a situation where we faced a real threat … you could go elsewhere for $1 billion, $3 billion, maybe $50 billion,” he said. “We could do it but if we went down that path, we would end up giving up total control.”

The Senate panel is probing the agreement, which would merge the commercial operations of the golf leagues. The proposed deal with LIV has triggered questions regarding the future of the tour and its players’ sponsorships.

The tour rakes in billions of dollars between sponsorships and media rights deals that air its events on television. The PGA Tour has a nine-year deal, which began in 2022, with Comcast, Paramount Global and Disney that brings in $700 million in annual fees, according to previous reports. The PGA tour also signed a 12-year $2 billion deal with Warner Bros. Discovery in 2018 for international TV rights, although it was restructured earlier this year.

In a framework agreement, the proposed deal shows it would create a for-profit subsidiary of the PGA Tour, and the new entity would manage commercial assets for all the tours. The PGA Tour would manage competitions, and has said it is leading the negotiations to reach a finalized deal.

Documents obtained by the subcommittee show that PCP Capital Partners, an investment firm headquartered in the United Arab Emirates, proposed a long-term agreement to PGA Tour Policy Board Chairman Edward Herlihy and Dunne as early as April.

The proposal included an idea that would have superstars Tiger Woods and Rory McIlroy own LIV Golf teams and participate in at least 10 league events. McIlroy is one of the most outspoken critics of the PGA Tour’s LIV deal.

The subcommittee also discovered that PGA Tour officials requested to dismiss Norman and golf marketing agency Performance54 from LIV Golf after the completion of the deal. It is unclear which professional players, including McIlroy and Woods, had knowledge of the negotiations before the agreement was unveiled last month, according to the documents.

The June merger announcement shocked the sports world, with many critics on Capitol Hill accusing LIV, which is funded by the PIF, of “sportswashing,” or spreading government influence through sports.

“A regime that has killed journalists, jailed and tortured dissidents, fostered the war in Yemen, and supported other terrorist activities, including 9/11. It’s called sportswashing,” subcomittee chairman Sen. Richard Blumenthal, D-Conn., said in a statement.

Critics have also pointed to the Saudi government’s ties to the 9/11 attacks, which the Saudis have denied, and the killing of Washington Post journalist Jamal Khashoggi, accusing the Saudis of “sportswashing.” Since its inception, LIV has faced such criticism, and protesters have targeted its events, particularly family members of those who perished in the Sept. 11, 2001, terrorist attacks.

Fifteen of the 19 hijackers that day were from Saudi Arabia, and Osama bin Laden, the mastermind behind the attacks, was born in the country. It has been concluded by U.S. officials that Saudi nationals helped to fund the terrorist group al-Qaeda, although the investigations didn’t find that the Saudi officials were complicit in the attacks.

Former President Donald Trump took heat from 9/11 families over hosting LIV events at his courses. The league this week said it would hold its final event of the 2023 season in late October at Trump’s Doral course in South Florida, moving the competition from Saudi Arabia. Trump is the frontrunner for the 2024 Republican presidential nomination.

While Blumenthal is a critic of the deal, subcommittee ranking member Sen. Ron Johnson, R-Wis., took a softer tone.

“The PGA was faced with an existential threat and this is what they’re trying to do to preserve the game of golf and the purity of the competition at the highest level,” Johnson told CNBC’s “Squawk Box” before the hearing Tuesday.

“Listen I have the deepest sympathy for the 9/11 families. I understand the issue of ‘sportswashing.’ I don’t think there’s enough billions of dollars for the Saudis to wash away the stain of the brutal [Jamal] Khashoggi murder,” Johnson added. “But the reality is we all buy oil. We drive cars. We are the ones filling up the coffers of the [Public] Investment Fund. I would rather have the Saudis invest their oil wealth in the U.S., rather than China or Russia, that’s just a reality of the world.”

Earlier on Tuesday, Blumenthal called out the Saudi ties and how a year before the deal was announced PGA Tour Commissioner Jay Monahan spoke out on such controversies. Blumenthal, like the group 9/11 Families United, pointed to Monahan’s comments during an earlier interview with CBS Sports, when he said he had discussed these controversies with tour players.

“I think you’d have to be living under a rock not to know there are significant implications,” Monahan said during the interview. “I would ask any player who has left or any player who would consider leaving, ‘Have you ever had to apologize for being a member of the PGA tour?'”

Following the deal announcement, Monahan said he expected to be called a hypocrite and that he accepted the criticism, especially after PGA Tour players voiced their shock and anger. Monahan has been on a leave of absence, due to an unspecified medical condition, but is expected to return Monday.

While the tour has defended the proposed deal as being the best foot forward for the game of golf, especially in light of the expensive litigation and severe competition presented by LIV, it had yet to acknowledge the controversial ties to Saudi Arabia until Tuesday’s hearing.

“Of course, we expect many questions about who we are dealing with,” Dunne said before the subcommittee on Tuesday. He went on to say he lost 66 friends and colleagues at his firm during the Sept. 11 attacks.

Dunne then added that if the deal goes through he has “nothing to gain except the sense of pride that we helped unite the game we love.”