Saudi investment in PGA Tour will top $1 billion. And Norman will exit as LIV's CEO, tour exec says
Saudi Arabia's sovereign wealth fund has agreed to invest more than $1 billion in a new commercial entity controlled by the PGA Tour, and Greg Norman will be ousted as the CEO of LIV Golf if the business deal between the Saudis and the tour is finalized, a tour executive told Congress on Tuesday.
The agreement between the Saudi Public Investment Fund, the primary funder of LIV Golf, and the PGA Tour shocked the golf world when it was announced last month and led to probes by the Permanent Subcommittee on Investigations, which summoned tour officials to the Capitol to testify under oath, and the Justice Department, which is looking into potential antitrust violations.
Among the subcommittee's findings were that representatives of the tour and the Saudis discussed giving Tiger Woods and Rory McIlroy their own LIV Golf teams, a proposal that apparently never reached either player. There was no indication during Tuesday's hearing that Congress would block the tour from going into business with the Saudis.
The subcommittee chairman, Sen. Richard Blumenthal, D-Conn., said he was troubled by the geopolitical implications of Saudi investment in American sports and efforts by Crown Prince Mohammed bin Salman, the Saudi leader, to whitewash the kingdom's human rights abuses. However, Republicans on the committee were more sympathetic to the PGA Tour and the existential threat it faced from the PIF, which controls $600 billion in assets — roughly 500 times what the tour is worth.
"We're here because we're concerned about what it means for an authoritarian government to use its wealth to capture an American institution," Blumenthal said.
The PGA Tour and the Saudis announced on June 6 that they agreed to drop all lawsuits against each other and combine their commercial interests into a new for-profit company while maintaining the tour's nonprofit status. Asked by Blumenthal how much money the Saudis have committed to the new venture, Ron Price, the PGA Tour's chief operating officer, testified the amount was "north of $1 billion."
Blumenthal repeatedly pressed Price and Jimmy Dunne, a PGA Tour board member and a key negotiator of the Saudi deal, on why the tour did not seek alternative sources of funding to compete with the PIF. Price and Dunne said going into business with outside investors would not prevent LIV Golf and the PIF from continuing to compete with the tour and use its vast resources to sign top players.
"My entire concern here is to put this divisive period behind us, and for the sake of players, fans, sponsors and charities, unite the game of golf again," said Dunne, a New York investment banker who is well connected with the sport's leaders.
Critics of the Saudi investment in golf have pointed to the kingdom's poor human rights record and the killing of journalist Jamal Khashoggi, which U.S. intelligence concluded was likely approved by the crown prince, an allegation he denies. The PIF has bought its way into other sports including soccer — it owns Newcastle United of the English Premier League — and Formula One racing.
"There is something that stinks about this path that you're on right now because it is a surrender, and it is all about the money, and that is the reason for the backlash that you're seeing, Mr. Price," Blumenthal said. "The equity ownership interest that the Saudis will have ... gives them financial dominance. They control the purse strings."
But Sen. Rand Paul, R-Ky., a harsh critic of the Saudi regime, said Congress should not interfere with a private enterprise doing business with the Saudis. He proposed instead that the U.S. reduce arms sales to Saudi Arabia. And the committee's ranking member, Sen. Ron Johnson, R-Wis., suggested that Saudi involvement in sports ultimately could improve human rights in the kingdom.
"If the kingdom's involvement in golf and other sports helps it to modernize or offer rights to women, wouldn't that be a good thing?" Johnson said.
Blumenthal pressed Dunne and Price to pledge that PGA Tour players would be free to criticize the Saudi regime if the deal is completed. Both said they would not recommend that the tour's policy board approve any deal that includes such restrictions on speech.
Before the hearing, the subcommittee released documents detailing the secretive and hasty negotiations that led to last month's framework agreement. Dunne conceded that the tour botched the announcement of the deal, leading many to mistakenly conclude that the tour and LIV Golf had completed a merger.
"The rollout was very misleading and inaccurate, which is everyone's fault. There is no merger," Dunne said. "There is merely an agreement to try and get to an agreement instead of a lawsuit."
The documents released by the subcommittee detail the roles of people on the Saudi side of the negotiations, notably Amanda Staveley, a British investment banker who helped broker the Newcastle deal and now sits on the team's board, and Roger Devlin, a British businessman.
Devlin was the first to approach Dunne about the prospect of a deal between the tour and LIV, the documents show, although Dunne said Tuesday he never met Devlin in person and reached out to Yasir Al-Rumayyan, the governor of the PIF, on his own. Dunne initially contacted Al-Rumayyan via WhatsApp, the documents show.
"My attitude was all of the people other than the guy with the money, we shouldn't talk to," Dunne said.
A memo from Staveley's firm titled "The Best of Both Worlds" includes the proposal that Woods and McIlroy take ownership of LIV teams and that each of them play in 10 LIV events per year. There is no indication in the documents that either Woods or McIlroy, both of whom remained loyal to the PGA Tour, were ever informed of the idea.
Among the other proposals included in the memo are a mixed-gender, LIV-style team event with qualifying in Saudi Arabia and concluding in Dubai; awarding world ranking points to LIV events, including retroactively; and PIF sponsorship of two elevated PGA Tour events, including one in Saudi Arabia.
None of those proposals was included in the framework agreement signed by Al-Rumayyan and PGA Tour Commissioner Jay Monahan. The PGA Tour sent a letter to players after Tuesday's hearing saying the PIF made "a series of suggestions" that "were rejected immediately."
The parties also negotiated but did not sign a side agreement that called for ousting Norman as LIV's CEO. Asked by Blumenthal whether Norman was out of a job, Price said that if the tour and the PIF complete their business deal, the tour would control LIV and Norman's job would be eliminated.
"We would no longer have a requirement for that type of position," Price said.
Norman remains in the CEO role, although he has been largely sidelined as the public face of LIV since the deal was announced. He was invited to testify Tuesday along with Al-Rumayyan; both declined. Monahan also did not testify because he is recovering from an unspecified medical situation that kept him out of work for a month; he has said he plans to return next week.
