PGA-Saudi deal to raise $1 billion US funding, Norman leaves as LIV CEO, Tour exec says
Saudi Arabia’s sovereign wealth fund has agreed to invest more than $1 billion US in a new commercial entity controlled by the PGA Tour, and Greg Norman will be ousted as CEO of LIV Golf if the business deal between the Saudis and the tour is completed. a tour guide told Congress Tuesday.
The deal between the Saudi Public Investment Fund, LIV Golf’s main financier, and the PGA Tour shocked the golfing world when it was announced last month and led to an investigation by the Permanent Subcommittee on Investigations, which called tour officials to the Capitol to testify under oath, and the Department of Justice, which investigates potential antitrust violations.
One of the subcommittee’s findings was that representatives from the tour and the Saudis discussed giving Tiger Woods and Rory McIlroy their own LIV Golf teams, a proposal that neither player apparently achieved. There was no indication at Tuesday’s hearing that Congress would block the tour from doing business with the Saudis.
The subcommittee’s chairman, Sen. Richard Blumenthal, D-Conn., said he was troubled by the geopolitical implications of Saudi investments in American sports and attempts by Crown Prince Mohammed bin Salman, the Saudi leader, to address human rights abuses in the country. kingdom to speak. The Republicans on the committee, however, were more sympathetic to the PGA Tour and the existential threat it faced from the PIF, which manages $600 billion in assets — about 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 take over an American institution,” Blumenthal said.
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The PGA Tour and the Saudis agreed on June 6 to drop all lawsuits against each other and combine their commercial interests into a new for-profit company while retaining the tour’s non-profit 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 that the amount was “north of $1 billion.”
Blumenthal repeatedly pressed Price and Jimmy Dunne, a PGA Tour board member and key negotiator of the Saudi deal, why the tour was not seeking alternative sources of funding to compete with the PIF. Price and Dunne said entering into business with outside investors would not prevent LIV Golf and the PIF from continuing to compete with the tour and using their massive resources to attract top players.
“My only concern here is to put this divisive period behind us, and for the sake of players, fans, sponsors and charities, reunite the game of golf,” said Dunne, a New York investment banker with close ties to the sport. . leaders.
Sports washing concerns
Critics of the Saudi investment in golf have pointed to the kingdom’s poor human rights record and the murder of journalist Jamal Khashoggi, which US intelligence concluded was likely authorized by the crown prince, a claim he denies. The PIF has worked its way into other sports, including football – it owns Newcastle United of England’s Premier League – and Formula 1 racing.
But Senator Rand Paul, a Republican from Kentucky and a harsh critic of the Saudi regime, said Congress should not interfere with a private company doing business with the Saudis. He instead suggested that the US cut arms sales to Saudi Arabia. And the commission’s senior member, Sen. Ron Johnson, R-Wis., suggested Saudi involvement in sports could ultimately improve human rights in the kingdom.
“If the kingdom’s involvement in golf and other sports helps modernize or provide rights to women, wouldn’t that be a good thing?” said Johnson.
Blumenthal urged Dunne and Price to pledge that PGA Tour players would be free to criticize the Saudi regime once the deal is finalized. Both men said they would not advise the tour’s policy board to approve a deal containing such restrictions on expression.
First rollout ‘misleading, inaccurate’
Ahead of the hearing, the subcommittee released documents detailing the secret and rushed negotiations that led to last month’s framework agreement. Dunne admitted that the tour confused the deal announcement, leading many to erroneously conclude that the tour and LIV Golf had completed a merger.
“The rollout was very misleading and inaccurate, and that’s everyone’s fault. There’s no merger,” Dunne said. “There is only an agreement to try to come 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, most notably Amanda Staveley, a British investment banker who helped broker the deal with Newcastle and is now on the board of the team sits, and Roger Devlin, a British businessman.
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Devlin was the first to approach Dunne about the prospect of a deal between the tour and LIV, the documents show, though Dunne said on Tuesday he never met Devlin in person and contacted Yasir Al-Rumayyan, the governor of the PIF, on his own. Dunne initially contacted Al-Rumayyan via WhatsApp, the documents show.
“My attitude was that all people, except the guy with the money, shouldn’t be talking,” said Dunne.
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 each play in 10 LIV events per year. There is no indication in the documents that Woods or McIlroy, both of whom remained loyal to the PGA Tour, were ever advised of the idea.
Mixed gender team events, PIF sponsorship also on the table
Among the other proposals included in the memo are a LIV-style mixed-gender team event with qualification in Saudi Arabia and conclusion 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.
The parties also negotiated, but did not sign a side agreement calling for Norman to be ousted as CEO of LIV. When asked by Blumenthal if Norman was out of a job, Price said that if the tour and the PIF completed their business deal, the tour would control LIV and Norman’s job would be eliminated.
“We would no longer have a requirement for those kinds of positions,” Price said.
Norman remains in the role of CEO, although he has been largely sidelined as the public face of LIV since the deal was announced. He was invited to testify with Al-Rumayyan on Tuesday; both refused. 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.
