June 13, 2023

Golf Merger

“The world of golf was left stunned [last] Tuesday as the PGA Tour, DP World Tour and rival Saudi-backed LIV circuit, who have been involved in a bitter fight that has split the sport, announced a shock agreement to merge and form one unified commercial entity.” Reuters

Many on both sides are critical of the PGA Tour:

“The problem with the golf merger isn’t just that the PGA Tour eagerly prostituted itself, or that it didn’t even have the decency to consult its players before making the deal, or that it didn’t care that some players actually had moral objections to LIV Golf, or that the PGA’s sudden shift was unfair to other golfers who, under the assumption that Monahan would stand firm, had previously turned down the opportunity to make millions of dollars by defecting…

“By selling out, the PGA Tour has also permanently aligned itself with a country that tortures prisoners, executes dissidents and others for vaguely defined offenses, subjects women to second-class treatment, and criminalizes homosexuality. The PGA’s decision horrified the families of 9/11 victims. Osama Bin Laden and 15 of the 19 hijackers were from Saudi Arabia, and the country had long supported the spread of extremist religious ideology around the world… Ultimately the PGA decided that making the abrupt switch from concerned global citizens to opportunists was worth all the risk.”
Jemele Hill, The Atlantic

“A year ago, the PGA tour saw the golfers joining the alternative league as taking an action that was barely one moral step above treason, and often cited a group called 9/11 Justice… PGA Tour commissioner Jay Monahan told CBS Sports’ Jim Nantz that golfers who signed on with the Saudi tour would find themselves feeling a need to apologize someday…

“If the PGA objection to LIV had primarily been a financial one… yesterday’s merger wouldn’t seem like such a betrayal. Institutions make decisions based on financial interests all the time. But the PGA made a moral objection to the Saudis and LIV. They had the stones to invoke 9/11 as part of their argument. And then, once the pile of money on the table got big enough, Monahan and the PGA had the shamelessness to not only take the money, but to turn around and smile and tell us how great everything is going to be after the merger.”
Jim Geraghty, National Review

Other opinions below.

See past issues

From the Left

“One major reason Saudi Arabia is especially flush with cash — enough to buy entire sports leagues — is that the Saudi government is taking advantage of the war in Ukraine to fleece the West. Since Russia invaded Ukraine last year, Riyadh has been using its power over energy markets to keep oil prices artificially high, with the costs paid by consumers in already struggling economies in the United States and Europe. To make even more money, Riyadh buys cheaper oil from Russia for its domestic use, freeing up more of its own for export at sky-high margins…

“This, in turn, gives Russian President Vladimir Putin funds to continue waging war and withstand Western sanctions. Saudi Crown Prince Mohammed bin Salman, also known as MBS, is then spending some of these war profits to buy influence in the West… The Saudi golf grab must be understood not just as a human rights or sportswashing story. It’s key to Saudi Arabia’s attempts to purchase political cover as it shifts its foreign policy away from the West and toward Russia, China and Iran.”

Josh Rogin, Washington Post

“The most basic principle of antitrust law is that companies with large market share can’t make agreements to avoid competing against each other. It is very difficult to characterize the PGA-LIV merger in any other way. The antitrust suit originally filed last year by a group of LIV players alleged that without ‘any meaningful competition (prior to LIV Golf’s entry), the Tour has failed to innovate and its product has grown stale.’ The PGA Tour, they argued, ‘has used its monopoly position to extract substantially increased revenues from broadcasters and advertisers’ while paying players less ‘because there is no competition for players’ services.’…

“LIV Golf eventually joined its golfers as a plaintiff in this very lawsuit. To now claim that a combined PGA-LIV entity is something less than a monopoly would lack any semblance of credibility. The merger would leave just a single, dominant association controlling almost the entire world of professional golf… Many antitrust cases pose tricky questions about market definition, competitive conditions, and so on. This one doesn’t.”

Marc Edelman, The Atlantic

From the Right

“LIV presented an existential threat to the PGA. Once the effort to stop LIV’s creation failed, the PGA had to start thinking very seriously about all its stakeholders — the players, the courses, the traditions of the sport itself, and the secondary businesses that rely on the PGA Tour. Would these stakeholders benefit from a fight to the death between the PGA and LIV? Or was the best strategy to merge before LIV grew large enough to make even more severe terms in a potential merger? I think obviously the latter…

“Ultimately, if Americans and Brits don’t like what happened here, we have to accept that the Saudis — and even some Russian oligarchs — are too large a problem for institutions such as the PGA or individual sports franchises to handle on their own. In a global market, authoritarian autocracies can be very powerful market players in their own right. We shouldn’t expect firms to be able to handle the competition by merely standing on moral high ground. Markets don’t work like that.”

Michael Brendan Dougherty, National Review

“Mr. Biden promised to isolate and ostracize MBS, despite his value as an ally in the rough Middle East. MBS has been returning the disfavor ever since. MBS is using the Kingdom’s massive oil-funded sovereign wealth fund to buy businesses and influence in the West. In 2021 the PIF purchased the English Premier League soccer club Newcastle United. It has invested in Saudi luxury resorts to draw wealthy Western tourists, including golf courses where one LIV tournament is played…

“Meantime, the Saudis are making decisions about oil production without concern for U.S. interests. Its latest cut will benefit Russia, which has been ramping up exports. In March Saudi Aramco invested in Chinese refineries, which process Russian crude that the West has sanctioned. It has floated selling oil to China in yuan, a dig at the U.S. dollar…

“Mr. Biden’s antitrust cops could try to block the golf tour merger, but it’s hard to see who will be harmed by it. The President would be wiser to follow the PGA’s lead and patch things up with the Saudis.”

Editorial Board, Wall Street Journal

Get troll-free political news.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.