The Department of Justice is investigating the merger agreement between the PGA Tour and LIV Golf because of antitrust concerns, the Wall Street Journal (WSJ) reported based on sources familiar with the matter.
An investigation by the Justice Department adds further uncertainty to the blockbuster merger between the PGA and its Saudi-backed rival, WSJ reported Thursday. (RELATED: ‘What A Piece Of Sh*t’: Dave Portnoy Rips PGA Commissioner For LIV Merger)
Breaking: The Justice Department will investigate the PGA Tour’s planned merger with LIV Golf’s Saudi backers over antitrust concerns https://t.co/JvYDUZhHwC
— The Wall Street Journal (@WSJ) June 15, 2023
The PGA Tour, LIV Golf and the Saudi Arabian Public Investment Fund (PIF) announced the merger last week. Both sides agreed to end “all pending litigation between the participating parties” as part of the deal. Before the deal, PGA and LIV were openly hostile to one another, to the point where the PGA invoked the suffering of 9/11 families to attack LIV for its ties to Saudi Arabia.
PGA Tour commissioner Jay Monahan said the deal was an opportunity to “take the competitor off the board” by partnering with LIV Golf. “We were competing against LIV, I felt very good about the changes we’ve made and the position we were in,” Monahan stated, “but to take the competitor off the board, to have them exist as a partner, not an owner, and for us to be able to control the direction going forward put us in a … productive position for the game at large.”
Monahan is currently on leave because of a “medical situation” and temporarily ceded his responsibilities, the New York Post reported. He is expected to be the CEO of the new business entity created by the PGA-LIV merger if it survives DOJ scrutiny.
The PGA is already under investigation by the DOJ for anticompetitive behavior in its feud with LIV Golf, WSJ previously reported. Premier golfers recruited by LIV Golf were suspended by the PGA Tour for their involvement with LIV, a move viewed by LIV Golf as anticompetitive.
Antitrust lawyers and scholars were anticipating a DOJ investigation into the PGA merger with LIV for potentially violating antitrust law.
While many facts missjng, more I look more I doubt the proposed PGA – LIV merger will survive serious antitrust scrutiny, not to mention potential CFIUS review. The champagne was popped prematurely (and reporters should have been more careful with their use of the past tense)
— Tim Wu (@superwuster) June 7, 2023
Former Biden White House Tim Wu tweeted June 7 that he doubted the merger would survive antitrust scrutiny. “While many facts [missing], more I look more I doubt the proposed PGA – LIV merger will survive serious antitrust scrutiny, not to mention potential CFIUS review,” Wu said.
The American Economic Liberties Project (AELP), an influential center-left antitrust group, called for the PGA-LIV deal to be blocked to prevent a monopoly from forming. AELP researcher and antitrust activist Matt Stoller wrote in his newsletter about the deal being “illegal” and said it “isn’t going to happen” in its current form.
University of Pennsylvania antitrust scholar Herbert Hovenkamp speculated about DOJ enforcement in three markets; live attendance, broadcasting deals and golfer compensation. Former Federal Trade Commission (FTC) Commissioner Joshua Wright mocked the dealmakers for announcing a merger without consulting with antitrust attorneys, citing a report from Bloomberg.
Democratic Connecticut Sen. Richard Blumenthal announced Monday a separate investigation into the PGA-LIV merger. He raised concerns about Saudi Arabia taking control of an American pastime.
The DOJ declined to comment to the WSJ.