Can anybody else stop the deal from going through?
The Justice Department, Federal Trade Commission or the European Commission could certainly try.
For about a year, the Justice Department has been investigating the tight-knit relationship between the PGA Tour and other powerful entities in golf. Among its questions is whether the organizations have exerted improper influence over the Official World Golf Rankings, which determine players’ eligibility for certain events and can be an important factor in their success and income.
As part of their deal, LIV and the PGA Tour agreed to drop their dueling lawsuits, but doing so would not necessarily change the Justice Department’s inquiry. If there were any illegal conduct by the PGA Tour, a merger would not prevent the PGA Tour from being punished for it.
“The announcement of a merger doesn’t forgive past sins,” said Bill Baer, who led the Justice Department’s antitrust division during the Obama administration.
The federal government, through the Justice Department and the F.T.C., also reviews more than 1,000 mergers for approval each year, and the European Commission reviews them for the European Union. Without a definitive agreement, it is not clear whether this might be the type of combination regulators could block or whether they would try to do so.
Saudi Arabia seems to have grand sports ambitions. Will it always remain a junior partner to the PGA Tour in golf?
As always, Saudi Arabia has the perfect vehicle to gain more control: money.
The Public Investment Fund will invest “billions,” according to its governor, al-Rumayyan, into the new for-profit entity. It will also hold “the exclusive right to further invest in the new entity, including a right of first refusal on any capital that may be invested in the new entity, including into the PGA Tour, LIV Golf and DP World Tour,” according to the release announcing the agreement.
If the Public Investment Fund invests more money, it will surely demand more board seats and greater voting rights, further tilting control of men’s professional golf toward the kingdom.