The proposed partnership between the PGA Tour and the Saudi Arabian Public Investment Fund’s LIV Golf is generating a rush of congressional scrutiny, with legislators increasingly focused on the tour’s status as a tax-exempt nonprofit. A powerful Senate Democrat announced Thursday he was opening a “wide-ranging” investigation into the merger’s finances, including the PGA Tour’s tax-exempt status, and another senator said he planned to introduce a bipartisan bill that would strip the tour of its tax exemption.
Ron Wyden (D-Ore.), chair of the Senate Finance Committee, said in a letter to PGA leadership that the tour’s involvement with the fund and its rival golf league, the Saudi-backed LIV circuit, “raises significant questions about whether organizations that tie themselves to an authoritarian regime that has continually undermined the rule of law should continue to enjoy tax-exempt status in the United States.”
And Angus King (I-Maine) said in an interview he planned to reintroduce a bill that would withdraw tax-exempt status from the PGA Tour, which is an outlier among professional sports leagues, several of which ceded their nonprofit status years ago.
King has long pushed for the PGA Tour’s tax-exempt status to be revoked and in 2018 introduced a bipartisan bill to do so with Sen. Joni Ernst (R-Iowa). That legislation never advanced. But the tour’s proposed deal with LIV and the Saudi Public Investment Fund, King said, “raises the visibility of the issue.”
“Take a poll,” King said. “How many (people) think a Saudi-owned business should be tax exempt?”
Wyden and other Senate Democrats have been sharply critical of the deal since it was announced last week. Sen. Richard Blumenthal (D-Conn.), who chairs the Senate Permanent Subcommittee on Investigations, also said this week he planned to probe the deal and its origins, citing the Saudi government’s “deeply disturbing” human rights record and “risks posed by a foreign government entity assuming control over a cherished American institution.”
A bill similar to the one that King is likely to propose was introduced in the House last week, immediately after the announcement of the partnership. The House bill’s sponsor, Rep. John Garamendi (D-Calif.), told The Post he wanted to “deny the Saudi sovereign wealth fund an opportunity to benefit” from a tax exemption intended for charities.
The Congressional skepticism only adds to the hurdles the partnership will face, which include confusion and anger from many PGA Tour players about a deal that was crafted in secrecy, and expected attention from the Justice Department.
Along with Sen. Elizabeth Warren (D-Mass.), Wyden called this week for the Justice Department’s antitrust division to scrutinize the deal, saying it would have “substantial adverse impact” on competition. The DOJ launched an investigation last year into whether the PGA Tour violated antitrust laws in its effort to stifle competition, and people familiar with the agreement between the tour and PIF have anticipated further scrutiny once terms are finalized.
The PGA Tour did not immediately respond to a request for comment, but in response to Blumenthal’s probe this week, a spokesman said the tour is “confident that once Congress learns more about how the PGA Tour will control this new venture, they will understand the opportunities this will create for our players, our communities and our sport, all while protecting an American golf institution.”
The tour’s status as a tax-exempt organization has long been in the crosshairs of lawmakers, with legislation proposed annually in both chambers to revoke the organization’s status. Those bills have never gotten out of committee, and the tour has been able to continue operating as the rare professional American sports organization that is able to avoid most federal taxes. According to its most recent tax filings, it generated $1.58 billion in revenue in 2021 and has assets totaling $4.5 billion.
PGA Tour Commissioner Jay Monahan sent a letter to some lawmakers last Friday defending the deal and appearing to cast some blame on Congress for the tour’s predicament. Monahan noted in his letter that he had met previously with lawmakers and “suggested ways that Congress could support us in these efforts.”
“While we are grateful for the written declarations of support we received from certain members, we were largely left on our own to fend off the attacks,” he wrote, “ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia.”
The letter was not well-received on the Hill, angering members of both parties, many of whom have been busy exploring what level of involvement Congress should play, if any, as the PGA Tour and PIF try to push forward with their partnership. The tour announced on Tuesday that Monahan was “recuperating from a medical situation” and taking a leave.
Wyden also said he plans to introduce legislation that would revoke the PIF’s special tax exemption that pertains to investment income by foreign governments and sovereign wealth funds.
“It’s widely understood that the Saudis rip Americans off at the pump and funnel their oil profits into various efforts to launder the reputation of their violent authoritarian regime,” Wyden said in a statement, “but at a minimum, there’s no good reason to help them along with a taxpayer subsidy.”
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