watch
now
The
proposed
merger
between
the
PGA
Tour
and
its
Saudi-funded
rival
LIV
Golf
stunned
everyone
from
golfers
to
Wall
Street
bankers
this
week
–
leaving
many
with
questions
about
what
the
merger
could
mean.
The
deal
was
announced
following
months
of
feuding
and
antitrust
lawsuits
between
the
two
leagues.
The
agreement
would
end
all
pending
litigation.
PGA
Tour
Commissioner
Jay
Monahan
told
CNBC’s
“Squawk
on
the
Street”
on
Tuesday
that
while
there
has
been
a
lot
of
“tensions”
between
the
two
organizations,
the
deal
was
a
benefit
to
the
game
of
golf.
Despite
those
tensions
being
settled
between
the
tour
and
LIV,
they
could
be
relevant
when
regulators
comb
over
the
deal.
“The
commissioner’s
statement
that
this
is
necessary
to
end
all
this
tension
leaves
the
question
of
what
do
we
mean
when
we
say
tension?
That
could
be
from
a
competition
angle,
which
is
a
good
thing
for
pricing
and
consumers,”
said
Henry
Hauser,
a
former
FTC
lawyer
and
currently
an
antitrust
attorney
at
Perkins
Coie.
“It
can
also
mean
tension
in
the
sense
of
a
distraction.”
While
the
two
organizations
were
feuding,
golfers
were
divided
between
the
PGA
Tour
and
LIV.
Some
left
for
the
hefty
paychecks
being
doled
out
by
LIV,
even
as
they
lost
their
endorsements.
Others
turned
down
big
paydays
to
stay
with
the
tour.
Monahan
has
been
outspoken
in
the
past,
saying
he
believed
players
would
face
“significant
implications”
for
going
to
LIV.
On
Tuesday,
he
said
he
expected
to
be
called
a
hypocrite
and
accepts
the
criticism.
Since
the
announcement,
several
players
have
voiced
their
frustration
with
the
deal.
Sponsors,
likewise,
have
been
slow
to
make
statements
or
decisions,
likely
waiting
to
see
how
the
deal
is
structured
and
the
regulatory
process
goes,
according
to
two
sponsors
close
to
the
tour.
Aside
from
the
lawsuits,
LIV
Golf
has
been
surrounded
by
controversy
and
criticism
since
its
launch
in
2022.
Backed
by
the
Saudi
Arabia
Public
Investment
Fund
–
an
entity
controlled
by
the
Saudi
crown
prince
–
critics
have
accused
the
sovereign
wealth
fund
of
“sportswashing”
by
using
LIV
Golf
to
distract
from
the
kingdom’s
history
of
human
rights
violations.
Antitrust
concerns
Lawsuits
rolled
out
from
both
sides
last
year
as
LIV
aggressively
lured
high
profile
players,
including
Phil
Mickelson
and
Bryson
DeChambeau,
away
from
the
tour
for
big
paychecks.
In
response
the
tour
had
increased
its
prizes
and
player
benefits,
as
well
as
secured
loyalty
agreements
from
its
top
players
as
it
tried
to
prevent
further
poaching.
Both
leagues
had
claimed
that
the
other’s
contracts
and
policies
restricted
golf
talent
and
stifled
proper
competition.
LIV
Golf
sued
the
tour,
also
citing
anti-competitive
practices
for
banning
its
players.
The
PGA
Tour
countersued.
The
proposed
deal,
which
includes
Europe’s
DP
World
Tour,
puts
an
end
to
all
of
the
fighting
–
in
and
out
of
court.
While
Public
Investment
Fund
Governor
Yasir
Al-Rumayyan
said
he
expected
the
deal
to
be
finalized
in
a
matter
of
weeks,
some
question
how
quickly
it’ll
bypass
U.S.
regulatory
agencies
like
the
Federal
Trade
Commission
and
the
Justice
Department.
watch
now
“Anything
that
happened
before
this
announcement
is
still
actionable,”
said
Hauser,
noting
the
DOJ
could
still
look
into
these
claims
outside
of
the
merger
process.
“You
can’t
use
a
settlement
as
a
masquerade.”
Hauser
noted
that
while
it’s
always
preferred
to
keep
matters
out
of
the
courtroom,
settlements
themselves
are
bound
by
antitrust
laws
–
“especially
if
there’s
a
legitimate
legal
dispute
between
the
entities.”
Although
the
deal
could
close
relatively
quickly
without
requiring
regulatory
approval,
lawmakers
could
raise
issues
afterward.
This
happened
recently
when
the
Justice
Department
ordered
the
end
of
American
Airlines
and
JetBlue
Airways
alliance,
saying
the
merger
would
hurt
consumers
by
driving
up
fares.
American
Airlines
plans
to
appeal
the
ruling.
The
new
entities
need
to
show
that
the
merger
is
to
the
benefit
of
consumers,
especially
on
a
global
basis,
by
bringing
the
best
talent
together
under
one
umbrella
and
expanding
the
reach
of
the
game,
said
Timothy
Derdenger,
an
assistant
professor
of
marketing
and
strategy
at
Carnegie
Mellon
University’s
Tepper
School
of
Business.
“If
the
deal
will
be
able
to
show
it
supports
the
growing
purses
for
the
golfers,
and
lead
to
more
engagement
and
innovation
to
golf,
which
adds
value
to
viewers,
I
don’t
see
much
of
a
fight
coming
from
the
U.S.
government,”
Derdenger
said.
Sponsorships
and
the
Saudis
The
deal
also
prompted
questions
about
how
it
might
affect
sponsors
of
the
PGA
Tour,
as
well
as
its
players’
endorsements.
Many
have
been
outspoken
about
LIV’s
financial
backer,
PIF,
and
have
even
protested
at
events.
Family
members
of
those
who
perished
in
the
Sept.
11,
2001,
terrorist
attacks
have
protested
LIV
events
due
to
its
Saudi
ties.
U.S.
officials
have
concluded
that
Saudi
nationals
helped
fund
the
terrorist
group
al-Qaeda,
which
were
linked
to
the
terrorist
attacks
on
Sept.
11,
although
the
investigations
haven’t
found
that
the
Saudi
officials
were
complicit
in
the
attacks.
On
Tuesday
the
group
9/11
Families
United
slammed
the
merger,
especially
after
Monahan,
the
PGA
Tour
commissioner,
raised
this
publicly
last
summer
in
an
interview. “I
would
ask
any
player
who
has
left
or
any
player
who
would
consider
leaving,
‘Have
you
ever
had
to
apologize
for
being
a
member
of
the
PGA
tour?'”
Monahan
said
during
an
interview
with
CBS
Sports
last
year.
Major
sponsors
of
the
tour
have
yet
to
speak
out
or
make
decisions.
At
least
one
sponsor
is
waiting
to
see
how
the
regulatory
process
plays
out
for
the
deal
before
making
decisions,
according
to
a
person
familiar
with
the
matter,
who
declined
to
be
named
because
the
internal
discussions
are
private.
Other
sponsors
have
not
yet
commented
publicly
on
the
matter.
Marketers,
advertisers
and
sponsors
have
pulled
out
from
other
partnerships
when
controversies
have
raised
concerns.
“The
fundamental
reason
why
the
brands
we
work
with
decide
to
invest
in
something
is
to
leverage
the
power
of
that
equity
to
connect
with
their
customers,”
said
Sampson
Yimer,
a
senior
vice
president
of
sponsorship
consulting
at
Momentum
Worldwide.
“When
that
equity
is
degraded
in
any
sort
of
way
or
has
potential
to
do
so,
it
causes
these
brands
to
potentially
rethink
their
investments
or
to
press
pause.”
Soon
after
joining
LIV,
Mickelson
made
disparaging
comments
about
the
tour
and
showed
his
support
for
the
Saudis.
The
top
golfer
lost
his
endorsements
from
the
likes
of
KPMG
and
others,
some
of
which
were
more
than
a
decade
old.
“If
it’s
at
all
a
consideration,
it’s
something
we
counsel
our
clients
on,”
said
Yimer.
“I
imagine
this
deal
could
have
a
chilling
effect.”
However,
the
combination
of
the
leagues
could
also
lead
to
more
endorsements,
at
least
in
the
long
run.
“The
players
that
left
and
lost
their
endorsements,
they
will
be
able
to
reengage
those
sponsorships
and
endorsements
because
this
brings
them
back
into
the
fold,”
said
Derdenger.