(Reuters) - The U.S. Justice Department will review the PGA Tour's plan to merge with Saudi-backed LIV Golf to determine if it violates antitrust law, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
The PGA Tour, DP World Tour and rival Saudi-backed LIV circuit, which had been involved in a bitter fight that split the sport, announced an agreement last week to merge and form one unified commercial entity.
The Justice Department had previously opened a probe into the PGA Tour's strategies for trying to keep its players from defecting to LIV, which was writing supersized paychecks to entice golfers to their circuit.
The Justice Department declined comment. The PGA Tour said the agreement is not a merger but rather an investment and that it will control the majority of board seats on the newly formed commercial entity.
"We are confident that once all stakeholders learn more about how the PGA Tour will lead this new venture, they will understand how it benefits our players, fans, and sport while protecting the American institution of golf," the U.S.-based circuit said in a statement.
The LIV Golf series is bankrolled by the Saudi Arabia Public Investment Fund. Critics have accused it of being a vehicle for the country to improve its reputation -- "sportswashing" -- as it faces criticism of its human rights record.
Much of the human rights-related backlash centers around the alleged involvement of the Saudi Arabian government in human rights violations, including the 2018 murder of Washington Post journalist Jamal Khashoggi.
The proposed transaction has also already prompted concern on Capitol Hill. Most recently, U.S. Senators Elizabeth Warren and Ron Wyden asked the Justice Department to open an antitrust investigation.
Wyden also said on Thursday that he would look at the transaction and work to revoke the Saudi PIF’s special tax treatment. On Monday, Senator Richard Blumenthal asked the PGA Tour and LIV Golf for communications and records on their planned tie-up.
On the golf courses, professional players have said they were caught unawares by the bombshell announcement of the planned merger.