(Reuters) - The PGA Tour's agreement to merge with Saudi-backed LIV has raised concerns in Washington from lawmakers who are mistrustful of the kingdom and critical of its human rights record. They are vowing a deep look into the deal.
Here are some levers of power lawmakers could use to stop or alter the agreement.
The Justice Department, which has been investigating the PGA Tour for trying to keep its players from defecting to LIV, would likely review the proposed merger to decide if they would sue to block it.
LIV and PGA have been competing for players with offers of bigger paychecks. A similar competition between book publishers Penguin Random House and rival Simon & Schuster for authors triggered a Justice Department challenge when the publishers sought to merge.
The department would also likely speak with companies that buy advertising. Michael Goldman, who teaches sports marketing at the University of San Francisco, said the proposed transaction could push up costs for television commercials and sponsorship deals because the new entity will be "the only game in town" for golf events.
Tim Wu, President Joe Biden's former special assistant for competition policy, said that there was a 50% chance the Justice Department would sue to stop the deal.
The deal could be reviewed by the Committee on Foreign Investment in the U.S., or CFIUS, a Treasury-led committee that assesses mergers to determine if they harm national security. Treasury Secretary Janet Yellen told CNBC on Wednesday that it was not immediately obvious that the PGA merger with LIV was a matter of national security.
Senator Ron Wyden, chair of the Senate Finance Committee, said U.S. officials should determine whether the deal would give the Saudis "improper control or access to U.S. real estate," a hint that he may ask CFIUS to scrutinize the plan.
While the new company will be for-profit, the PGA Tour, a nonprofit, will retain that status after the merger with LIV, according to a statement released on Tuesday. The tour's tax status has been criticized by lawmakers previously and that criticism could be revived.
While the U.S. Congress does not have an easy way to stop the merger, lawmakers can hold hearings where they highlight Saudi Arabia's human rights record.
Senator Chris Murphy, a Democrat, has said about the deal: "Are we really sure we want foreign dictatorships owning major American sports leagues?"
Wyden, who heads the Senate Finance Committee, said on Twitter he would "dive into every piece" of the merger. As a committee chair, he has greater leeway to call a hearing. Senate Republican leader Mitch McConnell, however, said the transaction was "not a governmental concern."
(Reporting by Diane Bartz in Washington; Editing by Matthew Lewis)