LIV Golf posed ‘existential threat’ to PGA Tour, officials tell U.S. lawmakers – National | 24CA News
LIV Golf posed an “existential threat” to the PGA Tour, officers advised U.S. lawmakers Tuesday probing the long-lasting golf league’s proposed merger with its Saudi-backed rival.
PGA Tour Chief Operating Officer Ron Price and board member Jimmy Dunne testified earlier than the U.S. Senate Permanent Subcommittee on Investigations relating to the negotiations, which might find yourself being a “win-win situation” for all events.
Dunne confused the urgency of the PGA Tour putting a take care of the upstart golf league — earlier than it was not an possibility.
“My fear is if we don’t get to an agreement, they’re already putting billions into golf, they got a management team that wants to destroy the tour … they have an unlimited horizon and an unlimited amount of money,” Dunne stated.
“It isn’t like the product is better, it’s just that there’s a lot more money that will make people move and I’m concerned exactly with what the senator’s worried about. I’m more concerned if we do nothing, they could end up owning us.”
The deal between the rival golf leagues shook the sporting world when it was introduced June 6, given the leagues have been engaged in bitter battles for 2 years.
LIV Golf is run by former professional golfer Greg Norman and is bankrolled by Saudi Arabia’s Public Investment Fund (PIF), which critics have accused of being a automobile for the nation to attempt to enhance its repute overseas.
Much of the backlash centres across the alleged involvement of the Saudi Arabian authorities in human rights violations, together with the homicide of Washington Post journalist Jamal Khashoggi in 2018.
Last June, a number of former world No. 1’s or main champions introduced that they have been leaving the non-profit PGA Tour for LIV Golf.
Those departures put the PGA Tour’s main income streams in danger, Price stated.
“We’re performance-based … we try to balance the allocation of resources among our top players and the ones who are performing at a top level on a regular basis, while at the same time maintaining earnings opportunities for all of our players. Our top players, those are the ones fans are interested in and fans tune in to watch and they drive our primary revenue streams, media and sponsorships,” he stated.
“To the extent that LIV Golf has been successful in taking away some of our top players through their irrational economical business model, that puts pressure on our ability to maintain our primary revenue sources and if they continue to do that, we would, as you said, faced an existential threat.”
A deal worth was not introduced, however a brand new firm shall be created with the PGA Tour as the bulk proprietor.
The new firm, nonetheless, will function for revenue and Saudi Arabia’s PIF will take a big minority stake within the mixed entity.
The actual stake will rely on how a lot it’ll make investments – an quantity anticipated to be north of US$1 billion, Price stated. PGA Tour and PIF will negotiate how a lot cash the brand new firm ought to begin off with.
Saudi Arabia’s PIF governor, Yasir Al-Rumayyan, would be the chairman of the brand new entity, whereas PGA Tour Commissioner Jay Monahan will function CEO.
Price stated the PGA Tour would have a controlling curiosity within the board.
“We faced a choice: one was to allow professional golf to be taken over and operated by the Public Investment Fund of the Kingdom of Saudi Arabia,” he stated. “The second was to allow the PGA Tour to continue to lead in accordance with our mission and our values for the benefit of our players and charity.”
The Permanent Subcommittee on Investigations, chaired by Sen. Richard Blumenthal, D-Conn., launched paperwork detailing the negotiations forward of Tuesday’s listening to.
The paperwork revealed discussions between the 2 sides of ousting Norman and giving golf giants Tiger Woods and Rory McIlroy their very own LIV groups.
Each of them would play in 10 LIV occasions per yr, the paperwork present. There is not any indication within the paperwork that both Woods or McIlroy, each of whom remained loyal to the PGA Tour in its dispute with LIV, have been ever knowledgeable of the concept.
Woods has performed solely twice this yr and is recovering from ankle surgical procedure to handle issues from a automotive crash in Los Angeles in early 2021 that he has stated will severely restrict his taking part in schedule going ahead.
Among the opposite proposals included within the memo have been a mixed-gender, LIV-style staff occasion with qualifying in Saudi Arabia and concluding in Dubai; awarding world rating factors to LIV occasions, together with retroactively; and PIF sponsorship of two elevated PGA Tour occasions, together with one in Saudi Arabia.
None of these proposals have been included within the framework settlement signed on June 6. The settlement referred to as for the events to drop all lawsuits and to mix the industrial pursuits of the PGA Tour, LIV and the European tour into a brand new, for-profit firm whereas sustaining the PGA Tour’s nonprofit standing.
The proposal to interchange Norman as LIV’s CEO was included in a facet settlement that was negotiated forward of the announcement, however the committee couldn’t decide whether or not the facet settlement was executed. Emails obtained by the committee confirmed that Dunne and fellow PGA Tour board member Ed Herlihy mentioned with Commissioner Monahan the prospect of Dunne and Herlihy changing Norman.
Norman stays within the CEO function, though he has been largely sidelined as the general public face of LIV because the deal was introduced. He was invited to testify at Tuesday’s listening to together with Al-Rumayyan; each declined.
Monahan additionally was not testifying as a result of he’s recovering from an unspecified medical state of affairs that saved him out of labor for a month; he has stated he plans to return subsequent week.
— with information from The Associated Press and Reuters
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