On the tee, from Washington: Bipartisan anger over Saudi golf mega-deal

1 year ago 34

The PGA Tour’s planned merger with Saudi-backed LIV Golf has sparked a surprise bout of bipartisan harmony on Capitol Hill: Conservatives and liberals are uniting to thrash the deal.

Some lawmakers are calling for congressional investigations. Others are looking to the Justice Department and other federal regulators to first explore the case for blocking the move on antitrust grounds. Only after regulators act, they say, is there likely to be appetite for Congress to enter the picture — even as a majority of its members are openly wary of the deal.

“I would want to make sure it passes antitrust scrutiny — that's my principle,” Sen. Josh Hawley (R-Mo.) said. “I would hope DOJ would go through their merger analysis. I would want to see what they come back with on that.”

Scores of members of Congress have criticized the golf mega-merger, warning that it would help consolidate the Saudi government’s U.S. influence despite deep bipartisan concerns about its human rights record.

“If the three major auto companies in America decided to merge, the Department of Justice would be all over it. That's what we have here,” Sen. Richard Blumenthal (D-Conn.) said. “We're thinking about the ways that we can continue to highlight the antitrust issues that the Department of Justice has to examine, but they're pretty obvious.”

Outside groups are also pushing Congress to stay out of the merger and instead lean on agencies to block the deal on antitrust grounds.

“This is a pretty straightforward antitrust violation,” said Katherine Van Dyck, senior legal counsel to the American Economic Liberties Project, a progressive anti-monopoly group. “To the extent Congress intervenes, I think it should be to investigate the harms that could result from this.”

Lawmakers are highly aware that antitrust questions could arise from comments by PGA Tour Commissioner Jay Monahan that the LIV deal would “take the competitor off the board," in addition to reports that no antitrust lawyers were involved in inking the final agreement that emerged in a surprise announcement Tuesday.

And that includes the members of Congress who professed no serious worries about the deal itself.

“We've got a lot of problems, and the Saudi Arabians buying a golf league is not at the top of my list,” Sen. J.D. Vance (R-Ohio) said.

Antitrust issues with the deal, Vance added, are a “more interesting question” that would “ultimately be a DOJ or FCC question — but yeah, it’s an issue.”

Sen. Mitt Romney (R-Utah) said of the merger: “It gives me some concern — that’s, I'm sure, being looked at by a federal agency that oversees foreign investment.”

Sen. Mike Lee (R-Utah), his party's top member on a Judiciary Committee subpanel responsible for antitrust issues, said the deal “looks like a long-established, dominant incumbent is acquiring a nascent competitor.”

Congressional leaders have taken a hands-off approach to the golf merger. Senate Minority Leader Mitch McConnell called it “not a governmental concern,” while Majority Leader Chuck Schumer said he would “leave it up to the professionals there to figure out what’s best for golf.”

Senate Finance Committee Chair Ron Wyden (D-Ore.), however, called the deal a “shameless hypocritical cash grab” and vowed his committee would examine aspects of it. A Wyden aide said he’s “considering a number of different options, including requesting review by [the Committee on Foreign Investment in the United States]” or other issues under his powerful panel’s jurisdiction.

Congress' seeming reluctance to touch the mega-deal yet is a stark contrast with its response to the merger between the National Football League and American Football League back in 1966. At that time, lawmakers passed an exemption to antitrust rules allowing the deal to proceed.

Of course, the domestic AFL lacked the political baggage that Riyadh brings to the table — particularly after the Biden administration concluded that the Saudi crown prince approved the operation that led to the 2018 killing of Washington Post journalist Jamal Khashoggi.

While there's little appetite to follow that football green light for golf, some members of Congress aren't sure they should try to slow down the move.

“It's eminently predictable that [the PGA Tour is] going to end up putting their business interests ahead of their purported convictions,” Sen. Todd Young (R-Ind.) said. “From a government standpoint, I don't believe there are many of us contemplating any sort of action against them, so for me the analysis ends there.”

Over in the House, Rep. John Garamendi (D-Calif.) was the first to act in the light of the LIV-PGA Tour deal, introducing legislation to revoke the PGA Tour’s tax-exempt status. Garamendi said he welcomes congressional scrutiny of the agreement.

“We got a clear monopoly for professional golf and an international worldwide monopoly — and they're not gonna have to pay taxes,” he said in an interview. “Certainly, Congress should investigate the anti-competitive result of this new monopoly for professional golf.”

His interest in the deal was joined by Rep. Maxine Waters (D-Calif.), ranking member of the Financial Services Committee, who requested that the Committee on Foreign Investment in the United States investigate.

Many Democrats said they were appalled that the PGA Tour, once sharply critical of the insurgent Saudi-financed LIV Golf, would reverse course seemingly out of nowhere.

“I almost threw up when I heard it,” Sen. Tim Kaine (D-Va.) said in an interview. “I thought the PGA was standing for important values that don't have a price tag on them, and it turns out I was wrong. So I'm very disappointed that I was wrong.”

That’s not to suggest there wasn't a significant bloc of elected officials cheering the deal.

“Now we'll get the big boys back in the game. Last week I saw the top 10, I didn't even recognize most of them,” Sen. Tommy Tuberville (R-Ala.) said, referring to the big-name golfers who had defected to LIV. He dismissed monopoly concerns as something “we can’t worry about.”

Asked if he worried the Saudis might venture into other professional sports leagues, such as the NFL, Tuberville scoffed: “They got a lot of money, [but] they ain’t gonna be able to afford that.”

Other lawmakers said the move had no broader nexus to national policy and suggested any antitrust complaints should be adjudicated in courts and through federal regulators.

“It’s a golf league. How does that pose a threat to our national security? I don’t agree with every Saudi policy, but it's not like they're going to be able to destroy our country with a golf tournament,” said Sen. Marco Rubio (R-Fla.), vice chair of the Intelligence Committee. He added, of antitrust worries: “That’s what laws and the courts exist for. They can take it there.”

A significant number of Republicans, in fact, argued that the private deal is simply outside their jurisdiction.

“I love watching golf on TV. I don’t really care whose initials or logo is on it,” Sen. Kevin Cramer (R-N.D.) said. “I don't understand why people's undies are in such a bunch, but mine aren't.”

Sen. Shelley Moore Capito (R-W.Va.), a member of Senate GOP leadership, said she didn’t have particular antitrust concerns either.

“They were the PGA before — I didn't hear anybody raising issues about it when they were a singular entity,” she said. “You know what? Let's just enjoy golf.”

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