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      PGA Tour Wanted Greg Norman Ousted as Part of Saudi Deal

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      The American circuit’s efforts were made public in documents that Congress released on Tuesday.The PGA Tour sought the ouster of Greg Norman, the two-time British Open champion who became the commissioner of the insurgent LIV Golf league, as a condition of its alliance with Saudi Arabia’s sovereign wealth fund, according to records that a Senate subcommittee released on Tuesday.The tour and the wealth fund did not ultimately agree to the proposal — crafted as a so-called side letter to a larger framework agreement — and, for now, Norman remains atop LIV. But the deliberations reflect an enmity forged over decades of hostilities between the tour and Norman, one of the most talented players in professional golf history who often chafed at the sport’s economic structure.And they underscore the tensions that could linger if the deal closes.The glimpse into the negotiations between the tour and the wealth fund came as the Senate’s Permanent Subcommittee on Investigations began its first hearing into the arrangement, which calls for the business ventures of the tour, the wealth fund and the DP World Tour to be brought into a new, for-profit company.The plan is facing significant scrutiny in Washington, where some lawmakers have castigated the tour, once willing to condemn Saudi Arabia’s record of human rights abuses, for abruptly growing cozy with an arm of a coercive government. Beyond any congressional misgivings about the wealth fund’s ties to the Saudi government, Justice Department officials are also interested in whether the deal violates federal antitrust laws and whether they should try to block it.Senator Richard Blumenthal, Democrat of Connecticut, said in his opening statement on Tuesday that his subcommittee’s hearing was about “much more than the game of golf.”“It is about how a brutal, repressive regime can buy influence — indeed even take over — a cherished American institution to cleanse its public image,” Blumenthal, the subcommittee’s chairman, added, citing the kingdom’s record of killing journalists, abusing dissidents and having “supported other terrorist activities, including the 9/11 attack on our nation.”“It is also about hypocrisy, how vast sums of money can induce individuals and institutions to betray their own values and supporters, or perhaps reveal a lack of values from the beginning,” he continued. “It’s about other sports and institutions that could fall prey, if their leaders let it be all about the money.”The proceeding, held in a crowded Capitol Hill room that previously hosted Supreme Court confirmation hearings and meetings of the 9/11 Commission, included two senior PGA Tour leaders: the chief operating officer, Ron Price, and a board member who was intimately involved in the negotiations that led to the tentative deal that was announced on June 6.In an opening statement, Price argued that the tour, faced with the threat of competing with one of the world’s mightiest sovereign wealth funds, had little choice but to seek some measure of coexistence after months of acrimony in court and in jockeying for the allegiances of the world’s best players.“It was very clear to us — and to all who love the PGA Tour and the game of golf as a whole — that the dispute was undermining growth of our sport and was threatening the very survival of the PGA Tour, and it was unsustainable,” Price said. “While we had significant wins in litigation, our players, our fans, our partners, our employees and the charities we support would lose.”Tour leaders have acknowledged that with negotiations for a final agreement still unfolding, board approval is no certainty. Over the weekend, one member of the board, the former AT&T chief executive Randall Stephenson, resigned. In a letter about his exit, Stephenson said “the construct currently being negotiated by management is not one that I can objectively evaluate or in good conscience support.”Tour executives have been eager to show how the agreement leaves them positioned to run professional golf’s day-to-day operations. The tour’s commissioner, Jay Monahan, has been tabbed as the chief executive of the new company, expected to be called PGA Tour Enterprises, and the tour is expected to fill a majority of the company’s board seats.They have been far less keen to discuss how Yasir al-Rumayyan, the wealth fund’s governor, will serve as the chairman of PGA Tour Enterprises and how the framework agreement envisions sweeping investment rights for a Riyadh-based fund whose power and value have swelled in recent years.Neither al-Rumayyan nor Norman agreed to testify at Tuesday’s hearing, citing scheduling conflicts. But documents released by the subcommittee suggest that both will be factors in an inquiry that could last months.The effort to remove Norman was underway by May 24, when the PGA Tour board’s chairman, Edward D. Herlihy, sent a proposed side letter to Michael Klein, a banker working with the wealth fund. The proposal called for Norman, as well as a British outfit central to developing LIV, to “cease” working on LIV within a month of “the management transition to the PGA Tour.”Although Norman’s long-term fate has been uncertain — he was not a part of the negotiations that led to the preliminary deal, stoking questions about his relevance — it was not until Tuesday that it became clear that his future had been a subject of the talks.LIV did not comment on Tuesday, but three people with knowledge of the negotiations, who requested anonymity to discuss private talks, said the wealth fund had rejected the tour’s proposal.The documents that the Senate released also detail the deliberations over when and how to announce the deal; Klein was among the figures who said the tour and the wealth fund should not wait for a final agreement to disclose their newfound peace.And the records show how a British businessman with ties to the wealth fund and its advisers reached out to James J. Dunne III, now a tour board member and one of Tuesday’s witnesses, in December. In an email, the businessman, Roger Devlin, suggested that there could be a pathway to an armistice between the tour and the wealth fund.Dunne, at least at first, declined to engage in a substantive way.Devlin re-emerged in April, warning Dunne that there was “a window of opportunity to unify the game over the next couple of months” before, he thought, “the Saudis will doubledown on their investment and golf will be split asunder in perpetuity.”Although committee investigators told senators in a briefing memorandum that they did not know for certain how Devlin’s April message influenced Dunne, the tour board member contacted al-Rumayyan within days.Dunne, al-Rumayyan and a handful of others met in Britain soon after, starting negotiations that included a number of ideas that did not make it into the five-page text of the framework agreement. Those concepts, outlined in a presentation titled “The Best of Both Worlds,” included Tiger Woods and Rory McIlroy, who had pledged fealty to the tour, owning LIV teams and a “large-scale superstar” team golf event that would feature the world’s top men’s and women’s players.Although the initial deal between the tour and the wealth fund did not include some of those proposals, the final agreement is still being hammered out, a process that could take months.At least as of April, according to documents the Senate released, there was even talk of a deal including memberships for al-Rumayyan at Augusta National Golf Club and the Royal and Ancient Golf Club of St. Andrews — two of the most prestigious golf clubs in the world, but ones that are not controlled by the PGA Tour. More

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      Other Sports Faced Congress’s Glare. Now Golf Will Get Its Turn.

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      A Senate hearing on Tuesday is just one part of Washington’s scrutiny of the PGA Tour’s deal with Saudi Arabia’s sovereign wealth fund.Sports executives and players have sometimes defended themselves or patiently absorbed hours of fury. They have occasionally apologized or pleaded for help. They have shifted blame or used celebrity and childhood memory as a charm offensive. In other instances, they have lied or obfuscated or simply said little at all.PGA Tour leaders, who are expected to appear before a Senate subcommittee on Tuesday to discuss their circuit’s surprise alliance with Saudi Arabia’s sovereign wealth fund, have a menu of time- and pressure-tested options for facing a sports-curious Congress. The tactics they turn to will likely do much to influence whether Tuesday’s proceeding is a blip that leads to a day’s worth of headlines or a debacle that triggers far greater scrutiny.“The PGA would be smart to understand that they’re not calling them in to play patty-cake,” said J.C. Watts, who played quarterback at Oklahoma before representing a district in the state in Congress and, from 1999 to 2003, serving as a member of the Republican leadership in the House.“The constituents back home, they understand sports and they understand 9/11,” Watts added, referring to longstanding accusations that Saudi government operatives played a role in the 2001 attacks. “This is sports with a much deeper twist than your typical hearing.”That Congress, which has a long history of quizzing, hectoring and looming when it comes to sports, would step into golf’s fray felt like a certainty after the tour and the Saudi wealth fund announced a framework agreement on June 6. So far, that activity has taken the form of two Senate inquiries, a House bill to revoke the tour’s tax-exempt status, demands for the Justice Department and the Treasury Department to consider intervening and Tuesday’s hearing at the Senate’s Permanent Subcommittee on Investigations.The proceeding is the latest example of a congressional interest in sports that has led to a mixed record. Lawmakers and their investigators have unearthed information and sometimes provoked changes to the sports landscape, either through legislation or the grinding power of the congressional bully pulpit.“I think you’ve got to articulate your public policy purpose,” said Tom Davis, a former Republican congressman from Virginia who was instrumental in hearings nearly two decades ago about steroid use in baseball, which lawmakers depicted as a part of a national scourge. “That’s really what you’ve got to do. It can be a health thing, a tax equity thing, but you’ve got to articulate why Congress is involved, and it’s a high threshold.”Senator Richard Blumenthal of Connecticut said the “central” role that sports play in American society makes them especially important for Congress to scrutinize.Pete Marovich for The New York TimesA sports hearing, Davis warned, was “high-risk, high-reward, particularly at a time when Congress is not seen as productive.”Senator Richard Blumenthal, the Connecticut Democrat who is the subcommittee’s chairman, said sports’ “central” role in American society makes them especially important for Congress to scrutinize. The proposed Saudi role in golf, he signaled, was too much for Congress to ignore.“There really is a national interest in this cherished, iconic American institution, which is about to be taken over by one of the world’s most repressive governments,” he said in an interview.On Tuesday, the subcommittee will not hear from any of the three witnesses it originally sought. Jay Monahan, the PGA Tour commissioner, has been on medical leave for almost a month, though the tour said Friday that he would return next week. Yasir al-Rumayyan, the wealth fund’s governor, and Greg Norman, the commissioner of the Saudi-backed LIV Golf league, cited scheduling conflicts and declined to appear.“Suffice it to say, this hearing will certainly not be the last,” Blumenthal said. “We will have hearings after there is a final agreement, if appropriate, and there is a national interest in doing it.”After the tour announced Monahan’s planned return, a spokeswoman for Blumenthal, Maria McElwain, said that the subcommittee would be “following up with him regarding any remaining questions after Tuesday’s hearing.”Jay Monahan, the PGA Tour commissioner, will not appear before the Senate Committee to testify.Rob Carr/Getty ImagesBut the PGA Tour is hoping to avoid testifying after Tuesday, when Ron Price, its chief operating officer, will appear. Although Price did not negotiate the agreement announced last month, the tour board member who initiated the talks, James J. Dunne III, is also expected to testify.Price and Dunne may also be asked about the weekend resignation of Randall Stephenson from the tour’s board after more than a decade. In his resignation letter, Stephenson, the former chief executive of AT&T, cited “serious concerns with how this framework agreement came to fruition without board oversight.” He added that the deal was not one that he could “in good conscience support,” especially because American intelligence officials concluded that Saudi Arabia’s de facto ruler authorized the 2018 murder of the Washington Post columnist Jamal Khashoggi.“If you are not really nervous and anxious to make sure you are prepared, then you are probably not prepared,” said Travis Tygart, the chief executive of the U.S. Anti-Doping Agency, who has repeatedly testified before Congress. “It will, for sure, be the worst night of sleep that any witness is going to have.”Golf has scarcely been a topic of inquiry in congressional hearing rooms. The sport’s leaders have often handled their business in Washington behind closed doors, relying on a fount of good will and gentility. The tour faced a significant threat in the 1990s, when the Federal Trade Commission examined antitrust issues in golf before its inquiry fizzled amid a pressure campaign from Capitol Hill.Public appearances on the Hill have been more cheery. Arnold Palmer, for instance, addressed a joint meeting of Congress to pay tribute to Dwight D. Eisenhower, and Jack Nicklaus spoke to a House committee about character education.Other titans of professional sports have had less pleasant interactions in Washington. Lawmakers have examined everything from college football’s Bowl Championship Series (“It looks like a rigged deal,” President Biden, who was then a senator, said.) to sexual abuse, domestic violence and the N.F.L.’s investigation into the Washington Commanders.But baseball has drawn much of the attention from Congress, like when senators called a 1958 hearing on antitrust exemptions. (“Stengelese Is Baffling to Senators,” read a subsequent headline in The New York Times, which reported that Yankees Manager Casey Stengel had lawmakers “confused but laughing.”)Neither Greg Norman, left, the commissioner of the Saudi-backed LIV Golf league, nor Yasir al-Rumayyan, the wealth fund’s governor, will appear at the hearing Tuesday.Charles Rex Arbogast/Associated PressThe more recent proceedings about steroids in baseball featured a series of electrifying hearings, including one in 2005 when sluggers employed all manner of strategies during hostile questioning, and a 2008 spectacle that factored into the indictment of the celebrated pitcher Roger Clemens on charges of perjury, making false statements and obstruction of Congress. He was ultimately acquitted.For all of the commotion and skepticism, though, the cumulative pressure from Congress helped prod baseball into sweeping changes.The Senate subcommittee’s goals for golf are, for now, unclear.“What’s a win on this, outside of getting your mug on the news?” asked Davis, who, after leaving Congress, represented the former Commanders owner Daniel Snyder during a House inquiry. “Is it undoing this deal? Is it exposing some Saudi plot to come in and take over American golf?”The wealth fund has denied that it is using sports to try to repair the kingdom’s reputation as a human rights abuser and has instead asserted that it wants to diversify the Saudi economy and empower the country to play a greater global role. But the Saudi element could still help the Senate inquiry to develop staying power because it gives Congress something to explore beyond a seemingly mundane sports issue.“Usually when you’re taking about sports, you don’t have to talk about 9/11 families, you don’t have to talk about the Pentagon, you don’t have to talk about Flight 93,” Watts said. “In this case, the one opposition that rallies everybody is the Saudi money.”Blumenthal suggested in the interview that he expects Saudi Arabia’s history — in the interview, he accused the kingdom of being “actively complicit in terrorist activities, including 9/11” — to be a central theme of Tuesday’s proceeding and the unfolding inquiry.The panel cannot unilaterally block the deal from advancing, but members are well aware that a crush of revelations or damaging testimony could stir outrage and, perhaps more consequentially, nudge other parts of the federal government that could do more to stop the alliance.Tygart, the antidoping chief, recalled a meeting with a senator before a 2017 hearing, with the lawmaker making plain that he understood exactly how the event could shape public debate, even if it did not yield legislation.“I know,” Tygart remembered the senator telling him, “how much good can come out of witnesses sitting under the bright lights and squirming in their seats.” More

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      Embattled PGA Tour Commissioner Jay Monahan To Return July 17

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      Jay Monahan went on medical leave in June, days after he announced plans for the tour’s alliance with Saudi Arabia’s sovereign wealth fund.Jay Monahan, the PGA Tour commissioner, who went on medical leave last month as he and his organization faced outrage over a planned alliance with Saudi Arabia’s sovereign wealth fund, is expected to return to his position on July 17.Although Monahan, the commissioner since 2017, did not detail his condition in a brief memo to the tour’s board on Friday, he noted that recent years had been “grueling for us all” and that he had “experienced that toll personally in the days following the announcement of our framework agreement and encountered adverse impacts on my health.”He said that his health had “improved dramatically” since he went on leave on June 13. But Monahan’s timeline for his return means that he will miss, by six days, a Senate hearing in Washington to discuss the tentative deal with the wealth fund.When Monahan’s future was publicly uncertain, the Senate’s Permanent Subcommittee on Investigations had agreed to allow two other witnesses to represent the tour: its chief operating officer, Ron Price, and a board member, James J. Dunne III, who was involved in the negotiations that led to the agreement.According to two people familiar with the discussions, who requested anonymity to discuss the private negotiations, the tour suggested to the committee in recent days that Monahan would consider testifying if the Senate agreed to postpone the hearing. The committee declined and chose to move ahead with its plans for Tuesday.Monahan is not the only leading golf figure who will be absent on Tuesday. Yasir al-Rumayyan, the wealth fund’s governor and one of the pre-eminent forces behind the LIV Golf circuit, which fractured the PGA Tour, declined to appear at the hearing, citing scheduling conflicts. Greg Norman, LIV’s commissioner, also said he was unavailable on Tuesday.Senators have said they might question al-Rumayyan and Norman later, a possibility the subcommittee left open for Monahan after Friday evening’s announcement.“We are glad to hear that Mr. Monahan is recovered and look forward to following up with him regarding any remaining questions after Tuesday’s hearing,” said Maria McElwain, a spokeswoman for Senator Richard Blumenthal, Democrat of Connecticut and the subcommittee’s chairman.”We are excited and eager to speak with Mr. Price and Mr. Dunne on Tuesday,” McElwain added. “They are both positioned to have significant information to share, and we’re looking forward to a robust and revealing discussion.”Price and another senior tour executive, Tyler Dennis, have overseen day-to-day operations for the tour since June 13, when Monahan and the board issued a short statement saying that the commissioner was “recuperating from a medical situation.” In the weeks afterward, tour officials repeatedly declined to describe Monahan’s condition or the circumstances that had led to his ceding of power at one of professional golf’s most turbulent moments.By the time Monahan stepped away, though, he had absorbed days of harsh criticism over the pact with the wealth fund, whose money his tour had previously denigrated as tainted, an about-face that he acknowledged would prompt charges of hypocrisy.The final details of the alliance have not been negotiated, but the tentative deal’s outlines call for the PGA Tour, the wealth fund and the DP World Tour, previously known as the European Tour, to bring their golf businesses into a new, for-profit company. Tour executives have argued that the deal, if it closes, will allow the Florida-based circuit to keep control of the sport because Monahan will be the new company’s chief executive and the tour will control the majority of board seats.But al-Rumayyan will be the new company’s chairman. Moreover, the wealth fund is expected to have extensive investment rights in the new company, promising the Saudis significant influence.Before June 6, when the deal involving the tour and the wealth fund was announced, Monahan was among the most unsparing critics of Saudi Arabia’s foray into professional golf.“The PGA Tour, an American institution, can’t compete with a foreign monarchy that is spending billions of dollars in an attempt to buy the game of golf,” Monahan said in June 2022. “We welcome good, healthy competition. The LIV Saudi golf league is not that. It’s an irrational threat; one not concerned with the return on investment or true growth of the game.”Last month, hours after he had sat alongside al-Rumayyan for a television interview, he adopted a decidedly different tone, in part because tour leaders had effectively concluded that their battle with the wealth fund was unsustainable.“I recognize that people are going to call me a hypocrite,” Monahan said last month. “Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA Tour and our players. I accept those criticisms. But circumstances do change.”And the deal, he insisted, would allow the tour to work with the wealth fund in “a constructive and productive way.”Criticism rained down anyway. More

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      LIV Golf Resists Senate Request for Greg Norman’s Testimony on Saudi Deal

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      Less than two weeks before a planned hearing about a transaction that could reshape golf, lawmakers are struggling to assemble a witness list.The Capitol Hill meeting room has been booked, the senators’ calendars cleared. But less than two weeks before a Senate subcommittee wants to hold a hearing about the PGA Tour’s planned venture with Saudi Arabia’s sovereign wealth fund, the panel’s ambitions for high-profile witnesses are encountering significant resistance.There is almost no prospect that the wealth fund’s governor, Yasir al-Rumayyan, will voluntarily go before Congress, on July 11 or ever. The PGA Tour’s commissioner, Jay Monahan, is on medical leave. And LIV Golf, a Saudi-financed league, is balking at sending Greg Norman, who won two British Opens in the decades before he became the circuit’s commissioner and lightning rod, to speak to the Senate’s Permanent Subcommittee on Investigations.The dispute over witnesses, only weeks into the panel’s examination of the deal, suggests that the inquiry could be turbulent. Lawmakers are especially frustrated by LIV’s offer to send Gary Davidson, its acting chief operating officer, to the hearing instead of Norman.“We have requested testimony from Greg Norman, and unless there is a reasonable explanation for his absence — which we have not yet been provided — Greg Norman is who we expect to appear,” Maria McElwain, the communications director for Senator Richard Blumenthal, the Connecticut Democrat who chairs the subcommittee, said in a statement.LIV declined to comment on Friday, but a person familiar with the circuit’s thinking, who requested anonymity to discuss private negotiations with Congress, said the league believed that Davidson was more steeped in its day-to-day operations and the potential ramifications of the deal that has rocked golf since it was announced on June 6. Norman and Davidson were not involved in the secret talks that led to the deal.Under the structure envisioned in a five-page framework agreement signed behind closed doors on May 30, the business operations of the PGA Tour, LIV and the European Tour, known as the DP World Tour — such as television rights and sponsorships — would be brought into a new for-profit company. The plan calls for the PGA Tour to control a majority of the board’s seats, for Monahan to be the company’s chief executive, and for the tour to maintain authority over many professional golf tournaments.But Saudi Arabia’s wealth fund would have extensive investment rights, and al-Rumayyan is positioned to become the company’s chairman, assuring the Saudis of significant sway over men’s professional golf if the deal closes.The planned venture has drawn weeks of scorn and skepticism from Washington, where lawmakers have fumed over Saudi Arabia’s human rights record, much as the tour did before it looked to go into business with the wealth fund. Some lawmakers have threatened to strip the tour of its tax-exempt status, and the Justice Department’s antitrust regulators could spend months scrutinizing the deal before deciding whether they will try to block it.And, hewing to the congressional pastime of publicly haranguing sports executives over issues such as steroids and the rights of college athletes, the Senate quickly scheduled a hearing to examine the deal, even though the most substantial details, like the valuations of assets, may not be resolved for months.In letters last week, though, Blumenthal and Ron Johnson, a senator from Wisconsin who is the senior Republican on the subcommittee, invited Norman, Monahan and al-Rumayyan to appear and be prepared to “discuss the circumstances and terms” of the agreement, as well as “the anticipated role” of the wealth fund in professional golf in the United States.LIV Golf chief operating officer Gary Davidson, right, talks with the Australian golfer Wade Ormsby at a LIV event earlier this year.Scott Taetsch/LIV Golf/LIVGO, via Associated PressThe senators, who have not subpoenaed any executives, had hoped to firm up the witness list by the middle of this week, but on Friday their panel was still bargaining with the tour, the wealth fund and LIV.The hearing, if it happens, will be among the most significant opportunities to date for golf executives to ease concerns about the planned transaction. But the proceeding, like any appearance before Congress, carries risks. A single misstep could intensify the public firestorm or, perhaps more troublingly for the deal’s supporters, encourage government officials to take an even more exacting look at the pact. (Antitrust experts, for instance, have predicted that Monahan’s assertion on June 6 that the deal will “take the competitor off of the board” will intensify the Justice Department’s scrutiny.)Norman, in particular, has a history of drawing criticism. Last year, for instance, he played down Saudi responsibility for the murder of the Washington Post columnist Jamal Khashoggi, saying, “Look, we’ve all made mistakes.” In recent months, he has made relatively few public comments, and he and his representatives have declined interview requests from The New York Times.But when Blumenthal and Johnson wrote to him on June 21, they said the subcommittee “respectfully requests that you appear in-person to testify.” LIV executives said Norman would be traveling abroad at the time, and they privately objected to the commissioner being subjected to congressional inquiry without his PGA Tour counterpart enduring the same scrutiny, which seems likely given Monahan’s medical leave.Monahan’s indefinite absence has complicated the tour’s representation at the hearing. The two executives named to lead the tour on an interim basis, Tyler Dennis and Ron Price, were not involved in the deal talks.Al-Rumayyan, however, was. But his appearance on Capitol Hill was never considered probable. One of Saudi Arabia’s most influential figures, he rarely gives interviews outside of tightly controlled settings, and lawyers representing him and the Saudi government waged an aggressive fight to keep him from being deposed in golf-related litigation in the United States. (The litigation was dropped as a part of the tentative deal — one of the few binding components of the framework agreement — and al-Rumayyan never gave sworn testimony.)The wealth fund declined to comment on Friday. The tour, in a statement, said it was “cooperating with the subcommittee’s requests for information and having productive conversations with them about who will represent the PGA Tour on July 11th.”It added, “We look forward to answering their questions about the framework agreement that keeps the PGA Tour as the leader of professional golf’s future and benefits our players, our fans and our sport.”The wealth fund and the tour are deploying armies of lobbyists, lawyers and political fixers to try to smooth the deal’s path. Before going on leave to recuperate from a “medical situation” that the tour has declined to describe, Monahan wrote to lawmakers to defend the agreement. He also complained that Congress had not given the tour enough support to withstand a Saudi “attempt to take over the game of golf in the United States,” as he put it.“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,” Monahan wrote.It is not clear whether the Senate panel will escalate its efforts to secure testimony from Norman, or any of the other witnesses they requested, especially before the July 11 hearing. Most lawmakers are away from Washington for the Senate’s Independence Day break, and few are expected to return to Capitol Hill until the week of the hearing.The hearing’s current timing, though, could be fortuitous for golf leaders. Public attention will turn the following week to the British Open, which will be played at Royal Liverpool. Cameron Smith, who joined LIV not long after his victory last July on the Old Course at St. Andrews, will try to defend his title at golf’s last major tournament of the year. More

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      How the PGA Tour and Liv Golf Merger Could Collapse

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      The tentative agreement has been the talk of golf, but there is no guarantee the pact that aims to bring the tour and LIV Golf under one umbrella will overcome every threat.Golf’s big deal — a planned partnership between the PGA Tour and Saudi Arabia’s sovereign wealth fund — is not how big deals are ordinarily done.There were almost no outside bankers or lawyers involved in negotiations that led to a five-page framework agreement, and only so much input from the PGA Tour board. The initial pact had few binding clauses and did not assign values to assets. The plan that would, as the PGA Tour commissioner, Jay Monahan, put it, “take the competitor off of the board” came as the tour faced a Justice Department investigation over antitrust matters.“In some ways, this looks a little more like a settlement to me than an actual M&A deal,” said Suni Sreepada, a partner in the mergers & acquisitions group at Ropes & Gray who said the lack of definitive arrangements complicated the path to closing.“The fact that they were willing to publicly announce it does mean that the parties are pretty committed to doing something,” Sreepada said. “But I guess that leaves us with a question of who holds the leverage at this point? And how does this end up getting fleshed out?”If the agreement closes, it stands to reshape golf’s economic structure profoundly, bringing the business ventures of the PGA Tour, LIV Golf and the DP World Tour, formerly the European Tour, into a new company. The wealth fund is in line to have significant influence over investments in the company, which Monahan is poised to lead as chief executive.Despite the Saudi sway over the new company’s coffers, as well as the plan for the wealth fund’s governor, Yasir al-Rumayyan, to serve as the entity’s chairman, PGA Tour officials have insisted that the tour retains control over the competitions themselves. They also note that the tour, which had previously condemned wealth fund money as tainted and immoral, will control a majority of board seats.“We are confident that once all stakeholders learn more about how the PGA Tour will lead this new venture, they will understand how it benefits our players, fans and sport while protecting the American institution of golf,” the tour said this month.Those assurances have done little to curb outrage over the pact, which could still fall apart.Here are some of the obstacles the tour, whose board is meeting near Detroit on Tuesday, and the wealth fund will have to overcome during a process that could take months. If the deal is not done by Dec. 31, it could potentially collapse, allowing both sides to decide whether they want to “revert to operating their respective businesses.”The PGA Tour’s board could balk.The tour has an 11-member board that includes five players. The board’s chairman, Edward D. Herlihy, and a member, James J. Dunne III, were involved in the talks with the wealth fund, but others had little knowledge of the deal until the day it became public.The board must sign off on the agreement once the outstanding details are negotiated. Although Herlihy and Dunne are expected to vote for the pact they helped create, most other board members have been publicly silent or noncommittal.“I told myself I’m not going to be for it or against it until I know everything, and I still don’t know everything,” Webb Simpson, a board member who won the 2012 U.S. Open, said in a recent interview. And at a news conference on June 13, Patrick Cantlay, another player with a board seat, said “it seems like it’s still too early to have enough information to have a good handle on the situation.”Beyond the anticipated backing from Herlihy and Dunne, Rory McIlroy, who sits on the board, has indicated reluctant support for the deal, saying: “If you’re thinking about one of the biggest sovereign wealth funds in the world, would you rather have them as a partner or an enemy?”Other directors have not responded to messages or could not be reached for comment.With many of the agreement’s details still being negotiated, the board did not vote on the deal on Tuesday.The Justice Department could try to block the deal.The Justice Department was looking at professional golf before the deal was announced, with antitrust investigators examining the tour’s closeness with other leading golf organizations and its efforts to deter players from joining LIV.The proposed partnership did not extinguish the department’s interest. In fact, it appears to have strengthened it.Although the tour and the wealth fund have refused to characterize the transaction as a merger, antitrust experts say semantics may not matter. Even if the deal is structured as more of a partnership than an acquisition, the Justice Department could seek to block it, as it successfully did with JetBlue’s alliance with American Airlines.Monahan stirred more doubts in Washington with his public observation that a leading rival would no longer be a threat. Antitrust lawyers said the department could interpret his remark as evidence that the elimination of competition is the aim of the deal, not, say, improving the sport.But Monahan also said the agreement would help create “a productive position for the game at large.” The tour is expected to focus on this in the coming months, arguing that by combining resources and repairing the rift in professional golf, the proposed venture would offer fans the best of all worlds, including more competitions between the finest players on the planet.A LIV Golf event at the Trump National Golf Club in Washington, D.C., this year.Chris Trotman/LIV Golf, via Associated PressThe end of the tension could help persuade regulators to approve the deal, reasoning that it is good for consumers.“If I were the lifetime czar of antitrust in the United States, I would ban the deal and tell them go back and compete,” said Stephen F. Ross, who teaches sports law at Penn State and worked for the Justice Department and the Federal Trade Commission.But, he said, “the real world is that neither private litigation nor antitrust enforcers have ever been particularly good at policing competition between sporting entities to make sure that consumers’ preferences are respected.”The department could also scrutinize how the arrangement will affect professional golfers, given the Biden administration’s focus on workers. In its successful effort to block Penguin Random House’s takeover bid for Simon & Schuster, the department’s antitrust regulators cited the potential effects on author compensation.Even though professional golfers, who often earn millions of dollars in prize and sponsorship money, may appear to be a less sympathetic group of workers than others affected by corporate transactions, the department could be eager to build case law related to the labor consequences of deals.Congress wants the Committee on Foreign Investment in the United States to study the pact.The deal has been loudly criticized on Capitol Hill, and a Senate subcommittee has scheduled a July hearing. But a Senate hearing cannot stop the deal, and so some lawmakers have asked a Treasury Department-led panel to intervene.The Committee on Foreign Investment in the United States, or CFIUS, is an interagency panel that has broad latitude to scrutinize any transaction that could result in a foreign entity controlling an American business and threatening national interests. Control is interpreted broadly, and can exist even in an investment for a minority stake.A transaction involving golf tours would not immediately seem to trigger a CFIUS review; it does not involve critical technologies and most likely does not involve much sensitive personal data about U.S. citizens. Janet Yellen, the Treasury secretary, said earlier this month that it was “not immediately obvious” the deal involved national security concerns.The demands for a review have not detailed specific concerns besides a generalized distaste for a partnership between an American sports titan and an arm of a government “known for chilling dissent, jailing dissidents and enacting draconian punishments,” as Senator Sherrod Brown, Democrat of Ohio, and Representative Maxine Waters, Democrat of California, put it.But one possible reason to scrutinize the deal involves real estate since CFIUS can review agreements involving property close to sensitive military sites. One of the PGA Tour’s biggest assets that could be controlled by the new for-profit entity is the Tournament Players Club collection of more than 30 golf courses across the United States that are owned, licensed or operated by the PGA Tour. More

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      PGA Tour Board Meets To Discuss Merger With Saudi-Backed LIV Golf

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      The 11-member board did not vote on the surprise pact, whose most significant details are still being negotiated.The PGA Tour’s board, with its members gathered in the same room for the first time since a fraction of them negotiated a deal with Saudi Arabia’s sovereign wealth fund to reshape golf, signaled Tuesday that it intended to move ahead with the agreement and past an outcry that has stretched from clubhouse locker rooms to Capitol Hill.But it also made plain that closing the deal was no certainty.The board, as expected, did not vote on a deal stocked with tentative terms that call for a web of golf businesses — including the tour, the Saudi-backed LIV Golf circuit and the European Tour, now known as the DP World Tour — to be housed in a new company. The entity is expected to be flush with Saudi cash but, for now, under the day-to-day control of PGA Tour leaders. But executives hoped that the regular meeting of the board, which is expected to weigh the pact formally only once final terms are negotiated, would help stabilize the tour’s course during a turbulent run of internal division and global scrutiny.That period, executives and board members know, could last for months.Tour executives, the board said in a carefully worded statement Tuesday night, have “begun a new phase of negotiations to determine if the tour can reach a definitive agreement that is in the best of interests of our players, fans, sponsors, partners, and the game overall.”The board, wary of further alienating the players who make up the tour’s membership, some of whom were infuriated after being blindsided by news of the pact, said it was “committed to the safeguards in the framework agreement that ensure the PGA Tour would lead and maintain control of this potential new commercial entity.”The board’s meeting came three weeks after the surprise announcement of the deal, and one day after the tour gave a Senate subcommittee a copy of the five-page framework agreement. The tentative accord, signed in the early-morning hours of May 30 at a Four Seasons hotel in San Francisco, capped seven weeks of secret negotiations, but it was mostly notable for how few binding commitments it included — and how many consequential details remained to be sorted through.Although the tour and the wealth fund are expected to contribute their golf ventures, like LIV, into the new company, the deal’s architects signed the framework agreement so quickly that no valuations were included or, apparently, even completed in advance. The agreement does not quantify the scale of the wealth fund’s expected investment in the new company, though it offers an outline for its leadership structure and protects the Saudi fund’s investment rights.Its few binding clauses include a nondisparagement pledge covering the tour and the wealth fund (but not the players) and a truce that keeps the rival circuits from recruiting golfers from one another. If a final agreement is not in place by the end of the year, barring a mutual extension, the tour and the wealth fund can “revert” to their businesses without any financial penalty, like a breakup fee.Board approval, if it comes, does not guarantee that the deal will last. The Justice Department’s antitrust regulators are among the government officials examining the accord, and they could ultimately try to block it. The pact is also poised to draw scrutiny next month on Capitol Hill, where a Senate subcommittee has scheduled a hearing for July 11.But Tuesday’s meeting was seen as pivotal to the way forward for the tour and an 11-member board that includes five players and luminaries in business, law and finance. Only two members of the board, Edward D. Herlihy and James J. Dunne III, were involved in the negotiations that led to the deal, and it appears many board members did not know they were underway.The board meeting, held at a Detroit-area hotel, began in the early afternoon and stretched into the evening. A person familiar with the meeting, who spoke on the condition of anonymity to describe a private gathering, said it had not focused entirely on the deal; rather, the person said, the board also spent significant time on more technical matters of the sport, such as competition cuts and eligibility.The majority of the meeting focused on the framework agreement, though, with board members receiving a briefing from the tour’s bankers about how they will try to assign values to the circuit’s varied assets. Jay Monahan, the PGA Tour commissioner, was absent from the meeting in Dearborn; on June 13, the tour announced that he was going on leave as he recuperated from an unspecified “medical situation.”Board members did not comment as they left the meeting, allowing the statement to stand on its own. Only one player who sits on the board, Rory McIlroy, has publicly suggested any measure of support for the deal. In recent weeks, other players have said they wanted to learn more about the accord and what it would mean for the tour.But board members have been told in recent months that the tour could not afford to maintain its duel with LIV, the league founded with billions of dollars from the Saudi wealth fund that enticed some of the game’s biggest stars with guaranteed contracts and enormous prize money. The wealth fund was also facing some pressure as it confronted setbacks in a court battle against the tour, and as LIV struggled to attract audiences and attention in the United States for reasons beyond its financial backer.If the deal collapses, though, both sides have already secured a mutual victory: the dismissal of litigation in California after the tour, the wealth fund and LIV agreed to drop their clashing cases. The dismissals were made with prejudice, meaning that they cannot be refiled, even if the rest of the pact disintegrates.For as guarded as the tour’s statement was on Tuesday night, the dismissal of the litigation was mentioned in its very first sentence. More

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      Details of PGA Tour and Liv Golf Merger Reveal What’s Left to Settle

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      The five-page agreement provoked a furor but included only a handful of binding provisions.The PGA Tour’s tentative deal with Saudi Arabia’s sovereign wealth fund included only a handful of binding commitments — such as a nondisparagement agreement and a pledge to dismiss acrimonious litigation — leaving many of the most consequential details about the future of men’s professional golf to be negotiated by the end of the year.The five-page framework agreement was obtained Monday by The New York Times. The proposed deal, announced on June 6 by the tour and the wealth fund, the financial force behind the renegade LIV Golf circuit, has caused an uproar throughout the golf industry. But a review of the agreement points to the rushed nature of the secret, seven-week talks that led to the deal and the complex path that remains ahead for the new venture, a potential triumph for Saudi Arabia’s quest to gain power and influence in sports and, its critics say, to distract from its reputation as a human rights abuser.Most crucially, the tour and the wealth fund must still come to terms on the values of the assets that each will contribute to their planned partnership. Bankers and lawyers have spent recent weeks beginning the valuation process, but the framework agreement includes no substantive details of projected figures or even the size of an anticipated cash investment from the wealth fund.Instead, much of the agreement focuses on the basic structure of the new company that is to house what the accord describes as all of the “commercial businesses/rights” of the PGA Tour and the European Tour, now known as the DP World Tour.The wealth fund is expected to contribute its “golf-related investments and assets,” including the LIV circuit that split the sport, and will have the first opportunity to invest in the new company. The tentative agreement says that the PGA Tour is to maintain “at all times a controlling voting interest” in the new company, but that Yasir al-Rumayyan, the wealth fund’s governor, will serve as the chairman of the new joint entity. Jay Monahan, the PGA Tour commissioner who recently went on leave because of an unspecified “medical situation,” is in line to become its chief executive.The new company, according to the agreement, could pursue “targeted mergers and acquisitions to globalize the sport” and may look to incorporate “innovations from LIV,” such as the team golf concept that the league has championed since it debuted last year.Those provisions, though, are not binding until the tour and the wealth fund strike a final agreement. Instead, the only ironclad caveats of the agreement involve seeking the dismissal of litigation, a mandate fulfilled on June 16; a ban on recruiting players to rival circuits; a deadline of Dec. 31 to sign final accords, absent a mutual extension; and confidentiality and nondisparagement clauses.The effective gag agreement appears far-reaching and prohibits the tour and the wealth fund from “any defamatory or disparaging remarks, comments or statements” about the other side and any “ultimate beneficial owners” — a phrase that could be interpreted to include the Saudi government, which the tour had previously condemned for its human rights record.“I recognize everything that I’ve said in the past and in my prior positions,” Monahan, a leading architect of the deal, said this month. “I recognize that people are going to call me a hypocrite. Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA Tour and our players. I accept those criticisms, but circumstances do change.”Saudi officials have denied that their investments in sports, which include efforts in soccer, Formula 1 racing and boxing, are intended to sanitize the kingdom’s reputation. Instead, they have depicted those investments as a glossy component of a sweeping effort to diversify the country’s economy under Crown Prince Mohammed bin Salman, the kingdom’s de facto leader who is also the wealth fund’s chairman.Al-Rumayyan, the wealth fund’s governor, signed the agreement on behalf of the Saudis, with no evidence of direct involvement by Greg Norman, LIV’s commissioner.Monahan and Keith Pelley, the DP World Tour’s chief executive, effectively represented the golf establishment when they signed the deal behind closed doors in San Francisco on May 30. It was sprung upon almost the entire golf industry, including most of the PGA Tour’s board, a week later.The board, which has been considering the deal that it was largely shut out of negotiating, is expected to discuss the pact’s initial terms during a meeting in Detroit on Tuesday. The 11-member board is not believed to be planning a vote yet because the final nuances of the accord may not be hammered out for months.The deal faces scrutiny well beyond the tour’s board. In Washington, Justice Department officials and congressional investigators are preparing to pore over the details of the accord, which antitrust regulators could ultimately try to block. The tour shared a copy of the agreement with a Senate subcommittee on Monday evening, just more than two weeks before a hearing on Capitol Hill that many expect to become contentious.But tour executives concluded in recent months that the new economic order that LIV’s swift rise provoked — swelling legal bills, larger prize purses, a diluted product with the world’s most marketable players competing against one another only four times a year at golf’s major tournaments — was unsustainable. They sought a détente with the Saudis and found a receptive audience in and around the wealth fund, where some officials were frustrated by a series of legal setbacks connected to LIV and uneven success in gaining traction in the crucial American sports market.The second paragraph of the framework nodded toward the turmoil, with the tour and the wealth fund saying they were interested in “ending divisions.” Some elements of the deal amounted to olive branches. In one section, for instance, the two sides agreed to “cooperate in good faith and use best efforts” to bring secure Official World Golf Ranking accreditation for LIV events.The fate of LIV, which sapped the PGA Tour of some of its star players after offering exorbitant contracts and prize purses, is not included in a binding part of the deal. Instead, the new company, if it comes to pass, is expected to “undertake a full and objective empirical data-driven evaluation of LIV and its prospects and potential.”The framework does not outline any financial penalties if the deal does not ultimately progress, but it says the tour and the wealth fund “can revert to operating their respective businesses” if the agreement collapses. More

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      Rory McIlroy Just Misses a Hollywood Ending at the U.S. Open

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      Despite briefly sharing the lead with the eventual champion, Wyndham Clark, McIlroy settled for second but vowed he would get a fifth major title.It might have been fitting if someone from Holywood won this year’s U.S. Open at Los Angeles Country Club. But Rory McIlroy, born in the Northern Ireland town of Holywood, is not having that kind of year.On Sunday, McIlroy was chasing his first major championship title in nine years, a drought that continues to shadow a luminous career that began with four major titles from 2011 to 2014. In April, he missed the cut at the Masters Tournament. A month later, he finished tied for seventh at the P.G.A. Championship.Then, on June 6, McIlroy, the most vociferous loyalist supporting the PGA Tour in its feud with the Saudi-back LIV Golf circuit, learned only a few hours before news broke that the two tours had shockingly formed a business partnership.McIlroy, like almost all of the PGA Tour’s players, felt blindsided.But on Sunday, a buoyant, smiling McIlroy, 34, was again enthusiastically chasing another major title, in the final round of the 123rd U.S. Open. He birdied the opening hole and for most of the next four hours seemed poised to reel in the eventual tournament winner, Wyndham Clark, the third-round co-leader with Rickie Fowler.McIlroy, however, never birdied another hole, and in the end, Clark, after some nervous closing moments, outlasted McIlroy by a stroke as both golfers shot even-par 70s. It was McIlroy’s third runner-up finish at a major and his 10th finish in the top five of a major since 2014.“I fought to the very end, and I’m getting closer,” McIlroy said Sunday of his chase for a fifth major title, adding: “I just got to keep putting myself in these positions and, you know, sooner or later it’s going to happen for me.”McIlroy said he felt a link between his performance on Sunday and his second-place finish at last year’s British Open at St. Andrews.“The last two real chances I’ve had at majors have been pretty similar performances,” he said. “Not doing a lot wrong.”McIlroy’s pursuit went down to the final strokes of the event, as Clark, playing in the final group of the day, was forced to execute a two-putt from 60 feet on the 18th green to clinch the championship.“I fought to the very end, and I’m getting closer,” McIlroy said of his chase for a fifth major championship.Michael Madrid/USA Today Sports Via Reuters ConMcIlroy conceded that he was hoping for a miscue.“You don’t want to wish bad on anyone, but you’re really hoping for a three-putt,” he said. “You’re hoping to somehow get into a playoff to keep giving yourself a chance. You’re rooting for one guy, and that guy is yourself at that point. A mistake can give you a glimmer of hope.“But Wyndham was pretty much rock solid all day, and that was a great two-putt at the last.”McIlroy’s fourth round began auspiciously as he reached the green on the par-5, 585-yard first hole with his second shot and two-putted for an opening birdie that briefly moved him into a tie for the tournament lead.But he struggled to capitalize on that early momentum even as he registered par after par — a streak of 12 in all. He showed nerve in sinking several tense four-foot par putts but failed to get his approach shots close enough for easier birdie attempts.McIlroy was hanging on but could not convert any putt longer than seven feet throughout the middle of his round. On the eighth green, he pulled an eight-foot birdie putt well left of the hole, a missed opportunity that McIlroy specifically mentioned in his post-round news conference.At the par-3 ninth hole, McIlroy’s towering approach shot with an iron came to rest 14 feet from the flag. As he walked onto the green, fans in two packed grandstands implored him to make a fairly straightforward putt that would have put him in a tie with Clark, but again McIlroy could not seize the moment.McIlroy’s run of consecutive pars ended at the par-5 14th hole after his tee shot bounded into the rough left of the fairway. He was forced to lay up short of the green with a second shot, although he then faced a short wedge shot to the green.McIlroy later said he was choosing between two clubs for the shot, but he felt a wind gust just before he began his swing, and that impeded the shot’s momentum.“I had the right club, but I might have just had to wait an extra 15 or 20 seconds to let that little gust settle,” he said.McIlroy caught a break on No. 14 when his ball embedded in a grassy bank.Richard Heathcote/Getty ImagesMcIlroy’s golf ball landed about a foot short of perfect and failed to clear a large bunker protecting the front of the 14th green. The ball embedded in a grassy bank between the sand and the green.He was granted free relief in the grass to the right of the bunker, but his dicey, downhill chip to the green rolled 26 feet from the hole. That led to bogey, and McIlroy fell to nine under par, which extended Clark’s lead to two strokes.McIlroy closed with four routine pars.He was asked at the conclusion of his Sunday news conference if he was growing weary of answering questions about the nine-year wait for a fifth major championship victory. He conceded that it was exhausting but added: “At the same time, when I do finally win this next major, it’s going to be really, really sweet. I would go through 100 Sundays like this to get my hands on another major championship.” More