As Sen. Richard Blumenthal delivered his opening remarks to kick off the Senate Permanent Subcommittee on Investigations’ nearly three-hour hearing with two representatives of the PGA Tour, the Senator from Connecticut wondered aloud the amount of the Saudi Public Investment Fund’s cash investment in its proposed for-profit entity with the Tour.
“We still don’t know how much money is on the table or was even discussed to prompt the PGA Tour to make this sudden, dramatic reversal,” Blumenthal said, noting how the Tour pivoted from fighting the Saudi-backed LIV Golf in court to partnering with the PIF.
Later in the hearing, Blumenthal received some clarity to his inquiry.
According to Tour COO Ron Price, who was part of the hearing along with policy board member Jimmy Dunne, the amount of the PIF’s investment in what was initially called NewCo would be “significant … north of $1 billion.” Price added that NewCo’s board, controlled by the Tour, would have a say in how much investment is obtained right away and down the road, and that some of that money would go toward supporting social causes and providing additional access to game.
Blumenthal expressed sentiment that even though the framework deal painted the PIF as merely a minority investor, the agreement “gives them financial dominance” in the partnership. He also stated that he believes the Tour had “lots of options” when it came to seeking alternative funding, whether via private equity or by offering players ownership stakes.
Price, though, argued that while the Tour didn’t have “specific conversations with potential investors,” continuing down the path of fighting LIV both in the competitive and legal arenas would be “very expensive and disruptive,” and could potentially devastate the Tour and assure LIV, as it continued to tirelessly recruit and throw money at the Tour’s top talent, the new leader in pro golf.
“Instead of losing control of the PGA Tour, we pursued a peace,” Price said.
During the hearing, it was revealed that the Tour’s net assets are worth $1.25 billion while the PIF is estimated to be worth between $600-700 billion.
“[The PIF] have an unlimited horizon and an unlimited amount of money,” Dunne said. “So, it isn’t like the product (LIV) is better; it’s just that there is a lot more money that will make people move.”
Sen. Ron Johnson, who seemed to come to the Tour’s defense multiple times during the hearing, also argued that the Tour’s battle with LIV was “not a fair fight” from a commercial standpoint.
“No amount of money can wash away the stain of the brutal [Jamal] Khashoggi assassination and other human-rights abuses,” Johnson said, “but it would be grossly unfair to expect the PGA Tour to bear the full burden of holding Saudi Arabia accountable. After all, anyone who drives a car or uses oil-based products has helped fill the coffers of the Saudi Public Investment Fund. Foreign investment in the U.S. is generally a good thing; I’d rather have the Saudis reinvest their oil wealth in America as opposed to China or Russia.”
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