LOS ANGELES – Commissioner Jay Monahan has told congressional members the PGA Tour was “left on our own” to fend off Saudi Arabia’s bid to take over the sport with LIV Golf because of the United States’ geopolitical alliance with the kingdom.
Monahan sent the letter to various lawmakers on June 9, three days after the PGA Tour's stunning announcement of an agreement with Saudi Arabia's sovereign wealth fund and the European tour to pool commercial business and rights in a new company.
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The agreement, while still not finalized, would end all litigation between the PGA Tour and the Public Investment Fund. In the last year, LIV Golf had lured away some of golf's biggest stars with signing bonuses of $100 million or more, prompting the PGA Tour to respond by pouring millions into its own tournament purses.
“During this intense battle, we met with several Members of Congress and policy experts to discuss the PIF’s attempt to take over the game of golf in the United States, and suggested ways that Congress could support us in these efforts,” Monahan wrote. "While we are grateful for the written declarations of support we received from certain members, we were largely left on our own to fend off the attacks, ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia.
“This left the very real prospect of another decade of expensive and distracting litigation and the PGA TOUR’s long-term existence under threat.”
Three days after Monahan's letter — first reported by Politico and obtained by The Associated Press — the leader of a Senate subcommittee demanded records from the PGA Tour and Saudi golf interests amid “serious questions” on how the agreement came about.
Sen. Richard Blumenthal, D-Conn., the chairman of the Senate Permanent Subcommittee on Investigations, also said he wanted to hear the PGA Tour's plan to keep tax-exempt status.
It was not clear to whom Monahan sent his letter because that was redacted, though it was believed not every member of Congress received it.
“We believe that we did everything we could possibly do to defend what we stand for, including spending tens of millions of dollars to defend ourselves from litigation instigated by LIV Golf — significant funds diverted away from our core mission to benefit our players and generate charity,” Monahan said.
He said the tour secured a federal court ruling that PIF was not protected under the Foreign Service Sovereignty Act because a judge had said the Saudi wealth fund was doing commercial business in the U.S. That ruling has been appealed to the 9th U.S. Circuit Court of Appeals in Denver, extending the antitrust lawsuits through at least the middle of next year.
Monahan said the agreement was not a merger with LIV Golf, a 48-man league that has a team component and plays eight of its 14 tournaments in the United States.
The announcement last week was for PIF, the PGA Tour and European tour to pool their business interests — that includes PIF-funded LIV Golf. Still unclear is whether LIV Golf continues after this year and how players who defected from the PGA Tour could return.
Monahan has referred to the agreement only as a framework, and even in a hostile player meeting last week at the Canadian Open, he could not offer many details.
In his letter to lawmakers, Monahan said the agreement would allow the PGA Tour to run tournaments as before, with him as commissioner and New York attorney Ed Herlihy as the chairman of the board.
Monahan would be CEO of the new for-profit company — he described it as a subsidiary of the PGA Tour — with Yasir Al-Rumayyan as the company's chairman. Al-Rumayyan is the governor of Saudi's wealth fund.
Monahan, Al-Rumayyan, Herlihy and Jimmy Dunne — the PGA Tour board member who helped broker the deal — would form the executive committee.
“The PGA Tour will at all times hold the majority of the Board seats and be in control of this new entity, regardless of the size of PIF’s investment,” Monahan said, adding PIF would be a minority investor.
“At its core, the PIF is investing in the PGA Tour as it has invested in other U.S.-based companies,” he said. “The PGA Tour and its tournaments will continue to operate as they do today, generating significant charitable and economic impact in the communities where they are played.”
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