The US Senate has issued a subpoena to the Saudi Arabian Public Investment Fund’s (PIF) US subsidiaries amid its investigation into the PIF's planned partnership with golf’s PGA Tour.
The subpoena, which was issued by the Senate’s permanent subcommittee on investigations yesterday (September 13), calls for the release of documents related to the PIF’s ‘framework agreement’ with the PGA Tour and “related investments throughout the US” after it refused to voluntarily comply with the Senate’s original request.
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Earlier this year, the subcommittee requested LIV Golf chief executive Greg Norman and PIF governor Yasir al Rumayyan to testify before a US Senate panel but both declined, citing scheduling conflicts.
The announcement was made ahead of yesterday’s committee hearing led by its chair, the Democratic senator Richard Blumenthal, which will focus on the PIF’s investments and growing influence in the US.
In a statement, Blumenthal said: “The Saudi’s Public Investment Fund cannot have it both ways: if it wants to engage with the United States commercially, it must be subject to United States law and oversight. That oversight includes this subcommittee’s inquiry.
“Saudi Arabia’s bid to buy professional golf in America is not just one investment in a vacuum. It is instead part of a web of growing investments in this country. They are largely unknown and they are almost entirely without oversight.”
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By GlobalDataA review of the PIF’s public filings shows its public US holdings have increased to more than $35 billion compared with around $2.5 billion in 2018.
During the hearing, Blumenthal and witnesses accused Saudi Arabia of exploiting loopholes in certain investment platforms to spread their influence and exert soft power in the US, as well as ‘sportswash’ criticism of alleged human rights abuses back home.
On golf and the PGA Tour’s deal specifically, the subcommittee pointed to problematic language in the proposed framework agreement that allows the PIF significant control of the US entity.
While the PGA Tour has maintained its belief that it controls its future as part of its proposed deal, documents released by Congress contain language in the framework agreement that may give Al-Rumayyan the final say over any matters.
Al-Rumayyan is also expected to become the chair of the new for-profit entity created by the PIF, PGA Tour, and DP World Tour (formerly European Tour).
According to Blumenthal, the proposed PGA Tour-PIF deal “raises concerns about the Saudi government’s role in influencing this effort and risks posed by a foreign government entity assuming control over a cherished American institution.”
The framework agreement uniting the PGA Tour, DP World Tour, and the PIF-backed LIV Golf circuit was announced in June giving the three parties until December 31 to agree on a binding contract.
According to the framework agreement, the for-profit assets of the three circuits will be combined into a new subsidiary tentatively called NewCo. After an evaluation of those assets, the PIF, which owns 93% of LIV Golf, will make a minority investment into the new entity.
NewCo will be an umbrella for all future golf-related investments of the three groups and plans to create financial returns through “targeted mergers and acquisitions to globalize the sport.” The PIF, meanwhile, will invest in both the PGA Tour and DP World Tour as a “premier corporate sponsor.”
PGA Tour commissioner Jay Monahan would be the chief executive and Al-Rumayyan the chair of the new company. Al-Rumayyan also would have a seat on the PGA Tour board, though the PGA has assurances in the preliminary deal that it would always have a majority vote.
