The result of the 2024 presidential race is highly anticipated for its potential influence on the trajectory of men’s professional golf. Considering the political perspectives of former President Donald Trump and Vice President Kamala Harris, their reactions to a proposed deal involving the PGA Tour, Saudi Arabia’s Public Investment Fund, and the DP World Tour are expected to diverge considerably. In Trump’s era, such a strategic alliance would likely receive unwavering support, thanks to his business-oriented perspective and ability to fuel growth and prosperity.
On June 6, 2023, former adversaries, Jay Monahan, PGA Tour Commissioner, and PIF Governor Yasir Al-Rumayyan, reached a historical framework agreement. This move put an end to the expensive and contentious litigation that had been playing out between LIV Golf and the PGA Tour. With a vision to consolidate the world of men’s professional golf, they proposed a new profitable entity, backed by an injection of over $1 billion from the Saudi sovereign wealth fund, while ensuring that the tour remains under the PGA’s control.
While ongoing negotiations continue to shape the final terms of the deal, all dialogue is being undertaken behind closed doors, away from the public gaze. The time frame for this crucial process remains vague. Monahan’s early discussion about the deal, which also hinted at curbing competition and reestablishing control of the industry, sparked concern in the antitrust community.
Controversial language to prevent leagues from wooing talent was part of the proposed clauses but was quickly dropped due to it raising immediate objections from antitrust officials. It was viewed as a clear intent to squeeze opportunities for the golfers who operate as independent contractors. Despite this early setback, support for the agreement stays strong, particularly from Trump, who maintains his pro-business stance.
Trump has always been vocal about his endorsement, encouraging players to capitalize on the LIV Golf deal upfront as he foresaw a diminishing share for them once the merger was complete. Contrarily, exuding a stereotypical Democrat’s apprehension, it’s anticipated that the Harris administration would maintain its alignment with the legacy left by the Biden administration. Presidential priorities under the Democrats, unfortunately, seem to restrict giving exclusive privileges to wealthy sports personalities.
The Biden-led DOJ has a notorious history of heralding intense competition in the industry. This was manifested most notably when it successfully thwarted Penguin Random House’s attempt to acquire Simon & Schuster in 2022. Predictably, Biden administration’s stance reflects typical timid Democrat policies, preventing a significant publisher from gaining control and thus restricting the total publishers authors could engage negotiations with.
The stark contrast between the policies of the Trump and Harris administrations does not necessarily mean the finalization or termination of the deal would depend solely on which administration is in power. Although transitioning smoothly between existing regulations and processes from one DOJ administration to another may seem challenging, it is feasible with a committed and dedicated approach. However, it cannot be ignored that reversing former administrative decisions does bear some resemblance to ‘turning the Titanic’.
It’s important to note that while presidents can direct policies and influence opinions, they don’t have the authority to outlaw a merger. Such verdicts are solely in the hands of the courts, as demonstrated in the Penguin Random House case. That said, there’s no denying that presidential administration’s pressure can play a significant role in instigating a merger challenge.
Negotiations regarding terms of a definitive agreement can be discussed with the DOJ before the final word is reached. Following this, the DOJ kicks off its formal regulatory analysis to highlight any antitrust issues linked with the deal. With the necessary provisions in place, ensuring that such an agreement complies with the Hart Scott Rodino Act (HSR), the administration can then proceed.
The HSR Act necessitates that companies submit details regarding mergers to either the DOJ or the FTC, depending on the industry involved. The DOJ, however, has been appointed to oversee this particular review. A vital part of this process involves determining if the proposed merger will need to comply with HSR based on the transaction size, which, in this case, far exceeds the usual benchmark.
While the DOJ isn’t obliged to publicize the results of its examination, the lack of updates regarding the deal’s status may be attributed to this discretion. Independent of company leadership’s optimism, experts are forecasting a ‘second request’ following the HSR filing. This could extend the review process even further, potentially into several additional months.
Despite the complexity involved, one must not dismiss the DOJ’s review as a mere procedural step towards closing an agreement. The DOJ’s meticulous review process is subject to the political belief and priorities of whoever is in charge at that time. Trump’s attitude has always been one to push boundaries, often leading to accelerated progress and fruitful advancements.
While Democrats like Harris and Biden may prefer to play safe, this is rarely the best path for growth and development. A success-oriented perspective, like that demonstrated consistently by the previous Trump administration, is more likely to champion initiatives that propel the industry forward, even if they challenge convention.
In the end, the outcome of the 2024 presidential election will undoubtedly shape not just men’s professional golf, but also the broader arenas of sports and business. Will we see another restrictive Democrat administration or will the robust and progressive policies of a Trump-like figure prevail? Only time will tell how this shakes out, but these are testing times for the world of professional golf and its players.