The Department of Justice has reportedly told the PGA Tour it plans to investigate its merger with Saudi Arabia-backed LIV Golf on antitrust grounds, citing concerns that the union creates a monopoly with virtually zero competitors.
Last week’s shock announcement that America’s largest pro golf organizer would be joining forces with its Middle Eastern rival was sold as a move to stabilize the sport, which was polarized when LIV lured some of golf’s finest away from the PGA Tour with nine-figure contracts.
However, the new, yet-to-be-named entity that combines the PGA Tour, LIV Golf and Europe’s DP World Tour is proving to be a regulatory obstacle, people familiar with the matter told The Wall Street Journal.
While the shotgun marriage was slated to be finalized by the end of this year, a DOJ probe would likely delay any transactions from taking effect for some time, the outlet reported.
A senior Tour executive reportedly told staffers this week that the outcome of the merger won’t be known for a least a year, an insider told The Journal.
The Justice Department had been investigating the antitrust feud between the PGA and LIV, which was quashed with the merger.
The rival leagues had been engaged in a high-profile legal fight for two years, with LIV alleging America’s premiere pro-golfer organization operated as a monopoly that blocked its athletes from participating in other tours — in violation of the US antitrust law.
That litigation will now be dropped, though it creates an ever bigger monopoly than the one LIV claimed the PGA had, thus piquing the interest of US antitrust enforcers.
The DOJ will be handling the ongoing probe rather than the FTC, which usually handles sports leagues.
The federal agency declined to comment.
European antitrust regulators were also reportedly eyeing the union for antitrust violations.
Uncertainty also looms for the 2024 golf calendar. LIV has said it plans to continue with scheduled events for the rest of this season and next year.
Rory McIlroy, one of the loudest pro-PGA voices throughout its civil war with LIV — and the No. 3-ranked golfer in the world — told Reuters that he fully expects LIV to “go away” upon completion of the union.
On the other hand, Dustin Johnson — one of LIV’s star recruits who was offered a reported $125 million to abandon the Tour — told the outlet that Yasir Al-Rumayyan confirmed LIV would continue at least into 2024.
Al-Rumayyan is the governor of PIF (Public Investment Fund of Saudi Arabia), one of the world’s largest sovereign wealth funds with more than $600 billion in assets — and the sole financer of LIV.
PIF bankrolled LIV with at least a $2 billion investment, according to The New York Times.
According to a PGA Tour-issued press release announcing the merger, Al-Rymayyan will serve as the chairman of the new LIV-PGA entity.
The Kingdom also revealed last week the transfer of 75% of the ownership of four teams in the Saudi Football Club to PIF — including the Riyadh-based Al-Nassr Football Club, which signed fading Portuguese star Cristiano Ronaldo to a $200 million a year contract though 2025.
As part of LIV and PGA Tour’s “landmark agreement,” PIF “will make a capital investment into the new entity to facilitate its growth and success,” according to the press release.
The fund’s financial statements aren’t public. Gulf countries don’t typically publish information about their overall debts and assets.
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