At Senate hearing, PGA Tour-Saudi emails show origin of LIV deal

As they set their sights on a shocking partnership, the PGA Tour and the Saudi Public Investment Fund discussed a series of dramatic moves that would significantly change the landscape of professional golf, according to a series of documents released by a Senate investigative subcommittee during Tuesday’s hearing on the golf course. proposed agreement.

Among the proposals presented: a global “World Golf Series” team event to conclude in Saudi Arabia; LIV Golf continues to operate as an independent tour with its schedule limited to the fall season; Greg Norman is being sidelined and removed from his role as LIV Golf CEO; Tiger Woods and Rory McIlroy gain ownership of LIV Golf teams and participate in LIV Golf events; two elevated PGA Tour events branded by either PIF or Saudi oil company Aramco; and a membership at Augusta National Golf Club for Yasir Al-Rumayyan, the governor of the PIF, who is poised to become among the most powerful men in golf if the shocking alliance is completed.

Many of the details of the deal between the PGA Tour and the Saudi investors are unknown and still subject to negotiation, but the documents released Tuesday during a Senate Permanent Subcommittee on Investigations hearing on the surprise deal provide the fullest picture yet of what the key is. stakeholders had hoped to get out of the partnership.

Late. Richard Blumenthal (D-Conn.), chairman of the subcommittee, shared a 10-page summary document plus another 265 pages of supplemental emails, messages and other communications submitted to the subcommittee on the PGA Tour and LIV Golf in advance of Tuesday’s hearing .

“We hope today’s hearing will help us uncover not only the reasons for the PGA Tour’s sudden turnaround and what it means for golf, but to understand what similar investments by deep-pocketed authoritarian governments could mean for our country, for our national security, and for the world,” Blumenthal said in his opening remarks before the senators began questioning the hearing’s two guests: Ron Price, the PGA Tour’s chief operating officer, and Jimmy Dunne, a member of the tour’s policy board and a key architect of the deal.

The documents released by the subcommittee provided new insight into the discussions that led to the tour and the Saudi PIF moving past their bitter differences and striking an alliance to bring professional golf under a single umbrella with the aim of forming a new for-profit entity that would oversee the commercial interests of the PGA Tour, LIV Golf and the Europe-based DP World Tour.

The documents also show several iterations of the framework the two sides have hammered out and seem to suggest the parties are open to LIV Golf co-existing with the PGA Tour. The communication does not reveal the size of the potential Saudi investment or set parameters for the LIV golfers to return to the PGA Tour. An initial proposal noted that Al-Rumayyan recognizes “the benefits of compensating the PGA players who have remained loyal to the Tour, and he would commit to establishing a substantial settlement fund for their benefit.”

Emails reveal that the first overture for the tour was made by an intermediary Roger Devlin, a successful British businessman who reached out to Dunne last December. He wrote: “Although the parties may appear far apart at the moment, I believe there is a common desire among the leading players and shared by His Excellency [Al-Rumayyan] to bring the sport back together in time to influence the 2024 schedule.”

Senators will demand answers from the PGA Tour, with further hearings likely

According to the documents, the two sides did not meet in person until an introduction in April in London, followed by a meeting in Venice on May 11. They met again at the end of May in San Francisco, where the basic framework was agreed. and signed.

Meanwhile, they bounced proposals back and forth. On April 26, Saudi Arabian representatives shared a slideshow titled “The Best of Both Worlds” suggesting Woods and McIlroy’s involvement in LIV. And in May, the two sides exchanged language that would oust both Norman and Performance54, the golf management company that helps run LIV, from all operations.

None of that was included in the basic agreement signed on May 30. It was not clear from the Senate documents whether any of those proposals are still under consideration by the PGA Tour and PIF. Two people familiar with the negotiations said PIF officials rejected the proposal to remove Norman.

PGA Tour executives faced the tough task Tuesday of selling the subcommittee on the controversial partnership — not to mention golfers, fans and regulators, all of whom are watching developments closely. Tour officials emphasized that the organization was not simply handing over control of professional golf to a foreign entity.

“The Tour will control the operations, the Tour will control the board of directors of the new subsidiary and the Tour will be the governing body of competitive golf in connection with any combined golf operation,” Price said in his written opening statement. “The agreement provides clear, explicit and permanent guarantees ensuring that the Tour will lead the decisions that shape our future and that we will have control over our operations, strategy and continuity of our mission.

In a transcript of his opening statement, Dunne told senators he was no longer involved in negotiations with the PIF, but stressed that “the tour will have full decision-making authority.”

“These safeguards were very important to us,” he said. “We could not and would not have reached even this initial framework agreement without all these strong safeguards against inappropriate control of the game of golf by the PIF.”

While the basic framework is vague about the future of LIV Golf, the parties spent a lot of time discussing it. On May 15, Ed Herlihy, chairman of the tour’s policy board, said in an email to Dunne that he had “raised the idea” Jay Monahan, the tour commissioner, “that you should oversee LIV going forward. He really liked that.” Dunne replied to Herlihy: “You and me.”

And Price sent Monahan some talking points on May 28 to address some long-standing PIF concerns, including the future of LIV. Price pointed out that “LIV Golf is important to PIF, but PIF, as a minority owner, has no decision-making authority … regarding LIV’s future.” He noted that the PGA Tour would effectively be majority owners of LIV, and the breakaway circuit’s fate would ultimately be determined by the board of directors of the new for-profit company — “where the PIF has a strong influence.”

The documents reveal deliberations about how to publicize the deal – including planned phone calls to Woods and McIlory – which underscored the secrecy behind the negotiations. Michael Klein, the New York banker and longtime PIF adviser, suggested announcing the news in a “short, softball segment” with CNBC, as Monahan and Al-Rumayyan did on June 6.

“The worst thing we can do is have naysayers lead the chorus,” Klein wrote in an email to Dunne.

Since announcing the partnership, the PGA Tour has received pushback from several directions. Tour players said they were blindsided, the families of 9/11 victims said they were duped, and lawmakers have vowed to investigate the genesis of the deal while investigating the tour’s tax-exempt status. Dunne said in his written statement that the tour “clearly did not do a good enough job of explaining the limited scope” of the original agreement.

The PGA Tour is a nonprofit organization. With Saudi money, should it be?

While the two sides agreed on the basic framework for a partnership on May 30, they are likely still weeks or months away from finalizing the deal. When that happens, the tour’s 10-member political board must formally approve the deal, which is not certain. Several members were upset that they were kept in the dark during negotiations, according to people familiar with the situation, and last weekend longtime board member Randall Stephenson, the retired AT&T executive, resigned from the board, saying he had “serious concerns concerns” over the Saudi alliance.

The tour had long had reservations about the Saudi Arabian threat, and the subcommittee’s report includes a February 2022 email from Norman to Monahan in which Norman chastises the PGA Tour for threatening bans on players who try to play for LIV.

“Players have the right and freedom to play where we want,” Norman wrote. “I know for a fact that many PGA players were and still are interested in playing for a new league ien addition to play for the Tour. What is wrong with that?”

He closed the email by warning Monahan, “This is just the beginning. It’s definitely not the end.”

The subcommittee’s investigation is one of two congressional probes into the deal, and lawmakers say public pressure could affect how the tour and PIF proceed. Even if the policy board signs a final agreement, the Justice Department can void the agreement if it finds the agreement violates federal antitrust laws.

Dunne and Price were not part of Blumenthal’s initial invite list. The subcommittee had hoped to hear from Monahan, Norman and Al-Rumayyan. But Norman and Al-Rumayyan declined to attend due to scheduling conflicts. And Monahan has been on medical leave to recover from an unspecified medical condition since June 14, though he is expected to return to his post next Monday.

Blumenthal has said he expects the subcommittee to hold additional hearings to explore the tour’s relationship with PIF and hopes Al-Rumayyan will be available to discuss PIF’s involvement in the deal.

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