Golf legend Greg Norman shook up his sport when he helped start LIV Golf in 2021. It instantly became a significant competitor to the organization that had become nearly synonymous with the sport of golf for decades, the PGA Tour. Last week, the sport was shaken up again when it was announced that the PGA Tour and LIV Golf would be merging into a single entity. The deal itself – and some of the drama that surrounded it – perfectly encapsulates why the American federal government’s approach to mergers and antitrust is fundamentally flawed.
Since its inception, congressional lawmakers were calling for investigations into LIV Golf. Last summer, Rep. Chip Roy (R-Texas) called on the Department of Justice (DOJ) to investigate the fledgling golf circuit for potential violations. A number of other lawmakers, including Sen. Chris Murphy (D-Conn.) have also been vocal in their opposition to the new tour. Ostensibly, this opposition came because of the funding Norman and LIV Golf received from the Public Investment Fund (PIF), a sovereign wealth fund controlled by the Kingdom of Saudi Arabia.
Given this thinly-veiled protectionism by U.S. officials and unspoken threats by the PGA Tour to punish golfers who made the switch to the new entity, LIV launched its own lawsuit, alleging monopolistic practices by the PGA Tour. However, after weeks of talks and an agreement to merge the two tours, LIV Golf has announced an end to this litigation. All parties involved seem generally pleased and excited about the outcome.
By all indications, they should be excited. From the start, LIV Golf promised a more exciting brand of golf and even started to popularize team golf tournaments – as opposed to the more common format of golfers competing individually. It also created a tour where golfers get paid more handsomely compared to their PGA counterparts. These new innovations – along with the immense wealth of the PIF – now gets merged with the tradition and recognition of the PGA Tour. Once again, all of the world’s best golfers can directly compete.
This should be cheered by golf fans across America. The fans will get a better and more engaging product. The sniping and tension between the tour organizations and their athletes can simmer down. More golfers can get involved to advance their career and be paid more generously than they otherwise would. This is largely a win for all involved.
However, this has not stopped U.S. regulators from continuing to circle. Rep. Roy tweeted after the deal was announced, “In the end, it’s always about the money. Saudi Arabia just bought themselves a one-world golf government.” Progressive lawmaker, Rep. Ro Khanna (D-Calif.) was more explicit in his response, calling for a Federal Trade Commission investigation and urging the players to unionize to oppose the deal. Rep. Nancy Mace – while cautiously supportive of the deal – added, “Any type of large acquisition or merger certainly deserves scrutiny in any industry.”
From LIV targeting PGA with antitrust suits to the various threats of policymakers at every stage of this story, it all illustrates the foolishness of the new, reactionary approach to antitrust policy in American politics. Anything that is big is considered bad. This has largely been directed at the tech industry as of late. Companies that are barely a couple of decades old are smeared as legacy monopolists, despite having just disrupted entire markets and establishing themselves in place of previously dominant competitors.
The same misguided principle is being applied now to professional golf. For decades, the PGA Tour was virtually the only name in golf. Then, a new circuit with significant financial backing emerged on the scene. Within a couple of years, they managed to go toe-to-toe with the PGA Tour and this merger now promises the best of both worlds for fans.
This is also hardly unprecedented. In 1966, the National Football League (NFL) and the American Football League (AFL) merged to create the modern NFL, by far the most popular sports league in the U.S.. It has been a wild success and it was explicitly approved by Congress. Today, the league generates $17.2 billion annually. Given the more international appeal of golf, this merger between LIV and the PGA Tour could be even more lucrative.
Big companies are not inherently bad. Mergers and acquisitions are not inherently bad. In fact, they very often are able to provide products, services, and entertainment in ways that separate entities simply cannot. The success of tech giants and the NFL should serve as glittering examples of this truth. The PGA-LIV merger is an opportunity for regulators and lawmakers to recognize the error of their ways in antitrust and abandon their wrong-headed approach that goes against the grain of economic progress and prosperity.
Dan Savickas is the director of policy for the Taxpayers Protection Alliance.
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