![]() tax laws meant to promote not-for-profit business associations.”Ĭalifornia Democratic Representative John Garamendi introduced the No Corporate Tax Exemption for Professional Sports Act in response to the announcement. “This assertion raises additional questions about the terms of the agreement and whether a foreign government may indirectly benefit from provisions in U.S. ![]() “PGA Tour has stated that it intends to preserve its tax-exempt status as a Section 501(c)(6) entity after the agreement is executed,” Blumenthal’s letter read. Wyden asked for a suite of information regarding the structure of the new affiliate for-profit entity as outlined in the merger agreement executive compensation and responsibilities how the proposal is in line with the Tax Code and national security matters.ĭays prior on June 12, Connecticut Democratic Senator Richard Blumenthal, who chairs the Permanent Subcommittee on Investigations, asked for similar documents and information from Monahan in light of the LIV Golf merger. “It is difficult to rationalize how any further increases in compensation to Tour executives would be in the best interest of the PGA Tour or further the Tour’s tax exempt purpose,” said Wyden, adding that PGA jets were used by Monahan and top officials for “extensive personal use.” According to Wyden, who cited IRS filings, Monahan received nearly $14 million in 2021, and 19 others had annual compensations exceeding $1 million. “Given the Tax Code’s prohibition on Section 501(c)(6) organizations providing any private benefit to any individual, I have serious questions about any compensation, arrangements, formal or informal, proposed as part of this merger framework intended to personally and financially benefit the already lavishly-compensated officers and employees of the PGA Tour,” he wrote. ![]() The Saudi government has a long history of detaining dissidents, torturing women’s rights activists, and carrying out arbitrary killings.” The letter points to the 2018 killing of journalist Jamal Khashoggi as an example of why the Saudi government would use sports investments as “a way of cleansing its reputation,” a practice known as “sportswashing.” Wyden’s letter purported that “the Kingdom of Saudi Arabia has committed gross violations of human rights in the Middle East, abroad, and here in the United States. Wyden wrote to PGA Tour Commissioner Jay Monahan and Chairman Ed Herlihy June 15 expressing “serious concern” about the merger and called into question whether the PGA Tour should continue to qualify for tax-exempt status. Saudi involvement has ruffled the feathers of some on the Hill, including Senate Finance Committee Chair Ron Wyden, Democrat of Oregon. A business league, such as the PGA Tour, is defined by the IRS as “an association of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit.” 501(c)(6), designed for so-called business leagues, chambers of commerce, real estate and trade boards, and professional football leagues. It has been reported by multiple outlets that stars Phil Mickelson and Dustin Johnson signed contracts with LIV worth $200 million and $125 million, respectively.įurther details of the merger’s framework between the PGA Tour, DP World Tour (Europe’s top pro golf tour), and LIV Golf will be rolled out “in the months to come,” according to the PGA announcement, which specified that the combined rights of each tour will be used to form a “collectively owned, for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game’s best players.”Ĭurrently, the Tour is exempt from federal taxes under Code Sec. The PGA and LIV Golf have been entangled in legal battles as some big-name golfers jumped ship from the PGA Tour after being offered massive deals. On June 6, the PGA Tour made headlines when it laid out an agreement reached with the Saudi Arabian Public Investment Fund (PIF), the entity behind LIV Golf, a competing golf circuit that quickly reshaped the sport’s landscape when it was created in 2021. ![]() Congressional lawmakers have raised concerns about the validity of the U.S.-based golf organization’s tax-exempt status after a surprise announcement of a merger with its Saudi-backed rival. ![]()
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