The PGA Tour in the sights of the US Senate


The PGA Tour in the sights of the US Senate
The PGA Tour in the sights of the US Senate

The end of 2023 will be remembered as the epochal transition phase for professional golf. The news of the day is represented by the news that the United States Senate seems seriously intent on adopting a measure that will particularly affect the PGA Tour.

As we have seen, the Senate Permanent Subcommittee of Inquiry is conducting a specific investigation into the agreement between the PGA Tour and LIV Golf. The awaited hearings of Greg Norman and Yasir Al-Rumayyan were skipped due to prior commitments of the two representatives of the Saudi League.

But it is not the only Commission that is dealing with the subject.

The PGA Tour, statements

Ron Wyden, who chairs the Finance Commission, presented a bill that would amend the Tax Code, threatening the status of the PGA Tour.

The American Tour is a 501(c)(6) tax-registered organization, which grants tax exemptions to Chambers of Commerce, professional real estate associations, and professional sports leagues. The PGA Tour is the latest major sports league to take advantage of the tax exemption, as the NFL and MLB have long since opted out of the benefit.

The Sports League Tax-Exempt Status Limitation Act proposes to exclude sports organizations from the benefit of the tax exemption if the total value of its assets exceeds $500 million (the annual revenues of the Tour alone exceed this figure, NDR).

Wyden's proposal is a clear and sharp response to the controversial agreement between LIV Golf and PIF. “Most sports leagues voluntarily gave up their tax exemption when their revenues skyrocketed, but they didn't dishonor themselves by accepting the Saudis' blood money”.

“An organization that breaks its word and agrees to become a source of profit for the brutal Saudi Arabian regime renders itself undeserving of a tax exemption”. It is clear that both the PGA Tour and the PIF expected such a reaction, given that the framework agreement provides for the creation of a profit entity as the final subject of the operation.

We just need to understand if the timing of the two actions (Senator Wyden's bill and the definition of the final agreement between the Tours) will coincide. In 1981, it had a marketing dispute with the PGA of America and decided to officially change its name.

From the end of August of that year it becomes "TPA Tour", which stands for "Tournament Players Association". The dispute was resolved within seven months and the name of the tour reverted to being "PGA Tour" in March 1982.

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