FILE PHOTO: May 26, 2023; Washington, DC, USA; Former President Donald Trump gestures to fans from a hospitality suite on the eighteenth green while standing next to Yasir Al-Rumayyan during the first round of the LIV Golf DC 2023 tournament at Trump National Golf Club in Sterling, Va. Mandatory Credit: Geoff Burke-USA TODAY Sports
WASHINGTON (Reuters) - Former president Donald Trump and other conservatives praised the planned merger of PGA Golf and Saudi-backed LIV, which would end an acrimonious battle for the world's top golfers, but some Democrats were less enthusiastic and the deal could face U.S. government probes, experts said.
The PGA Tour, DP World Tour and one-time bitter rivals LIV Golf circuit announced a landmark agreement on Tuesday to merge.
Veteran organizer PGA and newcomer LIV had fought over whether golfers who accepted LIV's bigger paychecks could also play in PGA tournaments, with some players also expressing distaste about LIV's backing by the Saudi Arabia Public Investment Fund (PIF) because of the country's human rights record, including the killing of journalist Jamal Khashoggi in 2018.
Yasir Al-Rumayyan, governor of the PIF, will be chairman of the new entity's board of directors.
Senator Richard Blumenthal, a Democrat, said he planned to keep a close eye on the deal and expressed surprise at the PGA's change of heart.
"The PGA Tour has spent two years lambasting Saudi sports-washing and paying lip service (to) the integrity of the sport of golf, which will now be used unabashedly by the Kingdom to distract from its many crimes," he said in a statement.
Senator Chris Murphy, another Democrat, tweeted: "So weird. PGA officials were in my office just months ago talking about how the Saudis' human rights crimes should disqualify them from having a stake in a major American sport. I guess maybe their concerns weren't really about human rights?"
But Trump, who owns three courses on LIV Golf's 14-event schedule for 2023, celebrated the deal in a Truth Social post. "Great news from Liv Golf. A big, beautiful, and glamorous deal for the wonderful world of golf," he wrote.
ANTITRUST SCRUTINY?
No details were given as to how the agreement will impact the current competitive golf landscape. LIV had been planning to run 14 events this year, including eight in the United States, with prize money of $405 million and further lucrative payouts for big name golfers to woo them away from the nearly century-old PGA. The PGA Tour had responded by dramatically raising prize money for some events.
The deal could well attract antitrust scrutiny because it could ultimately impact the incomes of the relatively small pool of top golfers that are targets for the tours. Last year, the Department of Justice successfully blocked a merger of two U.S. book publishers, arguing that the reduction in competition would hurt author incomes.
The department is already conducting an antitrust probe into professional golf, which included PGA's fight with LIV. It declined comment on Tuesday.
LIV was only founded in 2021, which could play in the deal's favor, said Seth Bloom of Bloom Strategic Counsel.
"I would assess it unlikely this would get opposed by the government mainly because it (LIV) hasn't been around very long," he said.
The deal could also be seen as good for consumers, according to Steve Ross, a sport antitrust expert at Pennsylvania State University's law school. "Allowing all the best golfers to participate at major events is responsive to consumer preference, which the Supreme Court has stated is the 'hallmark' of antitrust," he said in an email.
A national security attorney Reuters spoke to said the deal could be subject to a review by the Committee of Foreign Investment in the U.S., or CFIUS, a Treasury-led committee that reviews foreign investments for national security concerns, if, for instance, PIF can exercise "control" over PGA, a U.S. entity, through the transaction.
But others argue the nature of the PGA business means such concerns are unlikely to be a major stumbling block.
"The U.S. is concerned about things like AI, biotech, supply chain, computing, electronics, agriculture and food," said Nevena Simidjiyska, a regulatory lawyer at law firm Fox Rothschild LLP. "I don't think golf has reached that level of necessity yet."
(Reporting by Diane Bartz and Echo Wang; additional reporting by Steve Keating and Tyler Clifford; Editing by Rosalba O'Brien)
