Antitrust Concerns Loom Over the Proposed Merger Between American, Saudi Golf Leagues

The unexpected announcement this week of a merger of the American Professional Golfers Association and the Saudi-backed LIV Golf league shocked observers from the world of professional sports. The greatest problem for the two organizations may not be public perception, but rather roadblocks set up by federal regulators. The merger, announced on Tuesday, represents one of the most significant concentrations of power in the sports industry in recent memory. Concerns about monopoly power are now being raised by members of Congress and other observers.The director of research at the American Economic Liberties Project, Matt Stoller, called the deal “almost certainly illegal,” arguing that the merger between two golf leagues of such size and power is “obviously creating an illegal monopoly.”Mr. Stoller says the partnership will almost certainly die at the hands of federal regulators. “There is a lot of gray area in antitrust law, but when two companies want to merge to a monopoly, and announce it as such, that’s a violation of black letter law,” he wrote in his monopoly-focused newsletter, BIG. “In fact, this deal is so wildly and comically against the law that I actually don’t think it is intended to close.”Democrats in Congress are calling on regulatory bodies to block the merger because of Saudi Arabia’s human rights record and concerns over its influence in American sports, even as the Biden administration attempts to mend wounds with the Kingdom. Senator Blumenthal said in a statement that the PGA-LIV partnership will be “used unabashedly by the Kingdom to distract from its many crimes.” Mr. Blumenthal’s Connecticut colleague, Senator Murphy — a longtime critic of the Kingdom — decried the hypocrisy of PGA officials in a tweet after the deal was announced. “So weird,” Mr. Murphy wrote. “PGA officials were in my office just months ago talking about how the Saudis’ human rights record should disqualify them from having a stake in a major American sport. I guess maybe their concerns weren’t really about human rights?”President Trump, on the other hand, praised the deal after the announcement, calling it, “A BIG, BEAUTIFUL, AND GLAMOROUS DEAL FOR THE WONDERFUL WORLD OF GOLF.” Mr. Trump has hosted LIV events at his golf courses in New Jersey and Miami, resulting in multimillion-dollar payments to the former president. The PGA is already facing regulatory scrutiny for its wide influence over the sport in the United States. In 2022, as the LIV Golf tour launched and lured major PGA players such as Phil Mickelson and Brooks Koepka with promises of lucrative deals and exorbitant salaries, the PGA allegedly began threatening any and all professional golfers who contemplated leaving the PGA for the Saudi upstart. According to a report from the Wall Street Journal, the Department of Justice’s antitrust division began contacting players and their agents to inquire about threats of retaliation and the monopolistic power the league has over the sport not only in America but around the world. The PGA commissioner, Jay Monahan, said in June 2022 that his league simply could not compete with the funds that LIV was offering players, leading the PGA to resort to more aggressive tactics with its players. “If this is an arms race and if the only weapons here are dollar bills, the PGA Tour can’t compete,” Mr. Monahan said. “The PGA Tour, an American institution, can’t compete with a foreign monarchy.”Beyond the ongoing DOJ antitrust investigation, the PGA-LIV merger is likely to face a monumental roadblock at the Federal Trade Commission, the federal agency charged with approving or blocking large mergers and acquisitions. President Biden, in a move that excited many Silicon Valley critics and anti-monopoly scholars, appointed a legal scholar, Lina Khan, as chairwoman of the FTC. She has taken an active role in trying to curtail corporate power, and this merger is the kind of deal she has a tendency to swing at.The Saudis came into the world of professional golf with lightning speed last year, thanks to their seemingly bottomless pockets, cutting massive checks in order to poach household names. Mr. Mickelson — one of the most decorated golfers in history — was reportedly paid $200 million by the LIV tour for signing with the organization. Other athletes resisted offers from LIV. Rory McIlroy, the world’s third-ranked professional golfer, was one of the most high-profile detractors of LIV and its influence. For months, he criticized the Saudi sovereign wealth fund and the Kingdom’s human rights record. After he was informed of the merger, he resigned himself to the fact that this is what the league’s executives wanted to do and assured fans that there were some upsides. “Ultimately, when I try to remove myself from the situation, and I look at the bigger picture and I look ten years down the line, I think ultimately this is going to be good for the game of professional golf,” he said at a press conference on Wednesday. “I think it unifies it and secures its financial future.”

Antitrust Concerns Loom Over the Proposed Merger Between American, Saudi Golf Leagues

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