Executives with the PGA Tour assured senators on Tuesday that Saudi Arabia would not control a new golf entity it plans to form with its Saudi rival LIV Golf.
Lawmakers responded to news of the surprise merger, announced last month after seven weeks of rushed negotiations, by expressing concern that Saudi Arabia, scrutinized by Democrats for its human rights abuses, would have outsize influence over American golf.
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Sen. Richard Blumenthal (D-CT), as chairman of the Homeland Security Committee's investigative panel, called a hearing to learn more about how the deal came together, with testimony from two of its executives, Chief Operating Officer Ron Price and board member Jimmy Dunne.
Blumenthal is just one Democrat to raise concerns that Saudi Arabia is seeking to "sportswash" its human rights record, or cleanse its reputation through an investment in golf, and warn that its ownership of the new league would present a risk to national security.
The executives went to great lengths on Tuesday to downplay the sway Saudi Arabia would have as the PGA Tour seeks to come to a final agreement with LIV.
“While negotiations toward a definitive agreement are currently underway,” Price said in his opening statement, “the framework agreement contains important safeguards that ensure the Tour will operate fundamentally as it does today: The Tour will control operations, the Tour will control the board of the new subsidiary, and the Tour will be the governing body for competitive golf in connection with any combined golf operations.”
Although most terms of a PGA-LIV agreement have yet to be settled, beyond ending the lawsuits they filed against one another, Price testified on Tuesday that Saudi Arabia's sovereign wealth fund would invest "north of $1 billion" into the new entity.
Blumenthal suggested the investment is evidence of the sway the Saudis will have over the sport and is part of their plan to "capture American institutions." He preempted Price's argument in his opening statement, citing a document provided to the subcommittee ahead of the hearing that apparently described the structure of the deal as providing the wealth fund with "strong influence."
“A billion dollars is just the beginning,” Blumenthal later added, arguing the Saudis will be the ones who actually call the shots. "They control the purse strings.”
He noted the new entity would be chaired by Yasir al Rumayyan, a Saudi businessman who manages the wealth fund. Blumenthal had invited Rumayyan, as well as LIV Golf CEO Greg Norman, to testify, but the two executives declined to attend, citing scheduling conflicts.
Sen. Ron Johnson (R-WI), the ranking Republican on the subcommittee, said the $1 billion investment obviously gives the Saudis a "seat" at the table but defended the PGA, insisting that it had little choice but to join forces with LIV in the face of millions in litigation and its attempts to poach players.
The executives made much the same argument, stating that the merger would prevent Saudi Arabia, with virtually unlimited resources, from eventually taking total control of American golf. Dunne said the deal, if it comes to fruition, would be a "win-win" for the two sides and denied that the PGA's intent is to allow the Saudis influence over the sport.
“That’s the last thing in the world we want,” he testified.
Blumenthal, however, said the agreement is a failure of the PGA to "stand up" to Saudi Arabia. He raised concerns that the deal would muzzle players from being critical of the Saudi government, whose involvement in the civil war in Yemen and apparent assassination of Washington Post journalist Jamal Khashoggi have drawn condemnation from the West.
Price committed to protecting the interests of PGA players but did not outright commit that the final agreement would not have a nondisparagement clause.
He said under the framework agreement, the players are free to speak out about Saudi Arabia and that he would not recommend to the board that it approve a final deal that would restrict such speech.
Republicans, who view the Saudis as an ally in the Middle East, were generally less hostile toward the PGA and believe the government should stay out of professional sports.
But Sen. Josh Hawley (R-MO) repeatedly pressed the executives over the PGA's relationship with another country with a poor human rights record — China.
The senator questioned the PGA's decision to hold a series in China for several years. The tournament was suspended in light of the coronavirus pandemic, and Price told Hawley the PGA has no plans to resume operations, saying the decision was made from a "business standpoint."
Blumenthal followed up that line of questioning and expanded it to Russia. Price told the senator the PGA has no plans to hold events in Russia either.
Human rights took center stage at the hearing, with family members of 9/11 victims attending in protest of the proposed deal. The Saudi government denies any involvement in the 2001 terrorist attacks, but most of the hijackers were from the country.
Dunne agreed toward the end of the hearing to meet with the family members.
Blumenthal has teased that Tuesday's hearing is just the first and that the committee has been in touch with witnesses for possible future testimony. He remains interested in testimony from Ramayyan and Norman in particular.
Players, many of whom turned down lucrative contracts with LIV, were blindsided by the agreement, described by Blumenthal as a "betrayal" by management.
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Dunne expressed regret with how the agreement was announced. Rather than a deal between the PGA and LIV, he would have rolled it out as simply an agreement to drop litigation with the possibility that the Saudis become a minority owner in a future entity.
“Everybody’s to blame for that, and I'll take my share of blame for that too,” he said.