1 00:00:03,200 --> 00:00:08,280 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:08,720 --> 00:00:14,320 Speaker 2: Today's hearing is about much more than the game of golf. 3 00:00:14,360 --> 00:00:19,960 Speaker 2: It's about how a brutal, repressive regime can buy, influence, 4 00:00:20,000 --> 00:00:23,960 Speaker 2: indeed even take over a cherished American institution. 5 00:00:24,640 --> 00:00:28,320 Speaker 1: Democratic Senator Richard Blumenthal was one of the senators from 6 00:00:28,360 --> 00:00:32,040 Speaker 1: both sides of the isle who grilled two PGA tour 7 00:00:32,080 --> 00:00:35,760 Speaker 1: officials on Wednesday about the deal that shocked the golf 8 00:00:35,800 --> 00:00:39,440 Speaker 1: world last month and why the PGA would merge with 9 00:00:39,640 --> 00:00:43,720 Speaker 1: Saudi backed Live Golf, two leagues that were intense competitors, 10 00:00:44,040 --> 00:00:48,960 Speaker 1: with lawsuits and countersuits, congressional lobbying, and a fight over 11 00:00:49,040 --> 00:00:54,320 Speaker 1: golf's biggest stars. The answer appeared to be pretty simple money. 12 00:00:54,640 --> 00:00:58,520 Speaker 1: PGA board member Jimmy Dunn said, with its unlimited funds, 13 00:00:58,600 --> 00:01:02,880 Speaker 1: Saudi Arabia's publican Investment Fund could end up owning golf. 14 00:01:03,400 --> 00:01:07,440 Speaker 2: They have an unlimited horizon and an unlimited amount of money. 15 00:01:07,480 --> 00:01:09,959 Speaker 3: So it isn't like the product is better. 16 00:01:10,680 --> 00:01:12,959 Speaker 2: It's just that there's a lot more money. 17 00:01:13,360 --> 00:01:17,039 Speaker 1: And the magic number is one billion dollars. That's the 18 00:01:17,080 --> 00:01:20,880 Speaker 1: amount the PIF will invest in the new golfing entity. 19 00:01:21,520 --> 00:01:26,360 Speaker 1: Republican Senator Josh Holly questioned the PGA's chief operating officer, 20 00:01:26,480 --> 00:01:31,440 Speaker 1: Ron Price, about the tour's intense lobbying against Live in 21 00:01:31,520 --> 00:01:32,880 Speaker 1: the lead up to the agreement. 22 00:01:33,240 --> 00:01:35,080 Speaker 2: But this is before you agree to take a billion 23 00:01:35,120 --> 00:01:37,440 Speaker 2: dollars from the same people that you were lobbying against 24 00:01:37,440 --> 00:01:37,920 Speaker 2: a year ago. 25 00:01:38,480 --> 00:01:42,600 Speaker 3: Senator, we faced the choice. One was to allow professional 26 00:01:42,640 --> 00:01:47,360 Speaker 3: golf to be taken over and operated by the Public 27 00:01:47,400 --> 00:01:49,840 Speaker 3: Investment Fund of the Kingdom of Saudi Arabia. The second 28 00:01:49,960 --> 00:01:52,200 Speaker 3: was to allow the PGA Tour to continue to lead it. 29 00:01:52,600 --> 00:01:55,960 Speaker 1: Joining me is an expert in antitrust law, Harry First, 30 00:01:55,960 --> 00:01:59,120 Speaker 1: a professor at NYU Law School. Harry, the answer to 31 00:01:59,160 --> 00:02:04,160 Speaker 1: every question about the why of the deal was one word. Money. 32 00:02:04,680 --> 00:02:09,080 Speaker 1: That the PGA simply couldn't compete against Saudi money. Is 33 00:02:09,120 --> 00:02:11,280 Speaker 1: that a defensible reason for a merger? 34 00:02:11,720 --> 00:02:15,280 Speaker 4: I'll unpack what you've said with the caveat that the 35 00:02:15,280 --> 00:02:18,600 Speaker 4: only golf that I ever do is mini golf. 36 00:02:19,520 --> 00:02:22,720 Speaker 1: I don't even do that, So so. 37 00:02:22,000 --> 00:02:29,400 Speaker 4: The purpose is money a b PGA couldn't compete against 38 00:02:29,480 --> 00:02:32,760 Speaker 4: the money. And the third thing is therefore they have 39 00:02:32,800 --> 00:02:36,600 Speaker 4: to merge. Okay, so we'll take the three things. First, 40 00:02:36,840 --> 00:02:41,080 Speaker 4: money is behind everything. Oh I'm shocked. I'm shocked that 41 00:02:41,120 --> 00:02:44,520 Speaker 4: people could change their position when offered enough money. So 42 00:02:45,200 --> 00:02:47,920 Speaker 4: I'm not shocked. And you know, a lot of it 43 00:02:47,960 --> 00:02:52,680 Speaker 4: is about the money. There's a heavy emotional overlay on this, obviously, 44 00:02:52,840 --> 00:02:56,040 Speaker 4: but at the heart, from the PGA's point of view, 45 00:02:56,080 --> 00:02:58,519 Speaker 4: it is about money. You know, what is it from 46 00:02:58,520 --> 00:03:02,680 Speaker 4: the saudi'st point of view? So maybe it's reputations, Maybe 47 00:03:02,720 --> 00:03:06,520 Speaker 4: it's also money. Maybe they think professional sports are good investments. 48 00:03:06,520 --> 00:03:08,040 Speaker 4: There are a lot of people who think that a 49 00:03:08,120 --> 00:03:10,040 Speaker 4: lot of people have made a lot of money off 50 00:03:10,080 --> 00:03:13,760 Speaker 4: of professional sports. They're trying to diversify their economy, so 51 00:03:14,240 --> 00:03:18,160 Speaker 4: maybe that people have, of course described sportswa washing idea. 52 00:03:18,440 --> 00:03:22,400 Speaker 4: They're gonna, you know, change their image. They think they're 53 00:03:22,400 --> 00:03:24,920 Speaker 4: going to change their image this way. I don't know 54 00:03:24,960 --> 00:03:28,560 Speaker 4: who's telling them that. It's a long road for that, 55 00:03:28,919 --> 00:03:31,880 Speaker 4: but they're doing very well, thank you, ma'am, with their 56 00:03:31,919 --> 00:03:35,080 Speaker 4: bad image. As it is, Saudi Aramco is the second 57 00:03:35,160 --> 00:03:40,920 Speaker 4: largest company in the world, only behind Apple. And how 58 00:03:40,920 --> 00:03:43,560 Speaker 4: do they have all this money to invest? Where did 59 00:03:43,560 --> 00:03:47,280 Speaker 4: it come from? Oil? And who has bought the oil? 60 00:03:47,520 --> 00:03:53,320 Speaker 4: Since the Opec oil cartel was formed. We have so money. Yes, second, 61 00:03:53,840 --> 00:03:57,720 Speaker 4: PGA can't compete. So that's what competitors always say when 62 00:03:57,760 --> 00:04:01,960 Speaker 4: they're faced with a new competitor that is well financed. 63 00:04:02,240 --> 00:04:05,840 Speaker 4: But you know, firms always say that they would prefer 64 00:04:05,960 --> 00:04:09,640 Speaker 4: not to compete because competition may force them to do 65 00:04:09,720 --> 00:04:13,240 Speaker 4: things they would prefer not to do, like pay their 66 00:04:13,240 --> 00:04:16,840 Speaker 4: players more money, come up with things that might be 67 00:04:17,520 --> 00:04:21,880 Speaker 4: enticing to people who watch golf who have only been 68 00:04:21,960 --> 00:04:25,400 Speaker 4: offered one monopoly view of the sport. They might have 69 00:04:25,520 --> 00:04:28,800 Speaker 4: to think of new ways to present their tournaments. They 70 00:04:28,880 --> 00:04:35,000 Speaker 4: may have to actually compete. So can they or can't they? 71 00:04:35,440 --> 00:04:41,440 Speaker 4: Part three Merging to stop competition is not a defense. 72 00:04:42,160 --> 00:04:45,920 Speaker 4: It's called the worst defense. It we don't get more 73 00:04:45,920 --> 00:04:50,520 Speaker 4: competition by having less, and it's a bad argument. It's bad. 74 00:04:50,920 --> 00:04:55,960 Speaker 4: Interestingly in light of the case the Northeast Alliance so 75 00:04:56,120 --> 00:05:00,920 Speaker 4: called between American Airlines and Jet Blue, where we're having 76 00:05:00,960 --> 00:05:05,000 Speaker 4: trouble competing against each other and Delta. So they said, oh, 77 00:05:05,040 --> 00:05:10,159 Speaker 4: let's stop competing against each other and get bigger so 78 00:05:10,240 --> 00:05:14,200 Speaker 4: they can overtake Delta, and the district court just said, 79 00:05:14,880 --> 00:05:17,919 Speaker 4: that's not the kind of competition. The Sherman Act is 80 00:05:17,920 --> 00:05:22,560 Speaker 4: talking about you know, we're talking about competition, and anti 81 00:05:22,600 --> 00:05:25,960 Speaker 4: trust laws are indifferent as to who wins the marketplace. 82 00:05:26,040 --> 00:05:33,480 Speaker 4: Besides that, so the three parts money is motivating things. 83 00:05:33,520 --> 00:05:38,440 Speaker 4: Of course, the desire to escape competition maybe motivating the PGA, 84 00:05:38,640 --> 00:05:41,520 Speaker 4: but it's not the kind of motivation that presents it 85 00:05:41,520 --> 00:05:45,160 Speaker 4: any trust defense. So if we use the straight anti 86 00:05:45,240 --> 00:05:49,960 Speaker 4: trust lens, they have some high legal hurdles to surmount. 87 00:05:51,279 --> 00:05:55,279 Speaker 1: And Live Golf has spent a year litigating and claiming 88 00:05:55,320 --> 00:05:58,680 Speaker 1: that the PGA tour is a monopoly. In the complaint 89 00:05:58,680 --> 00:06:02,040 Speaker 1: to use the word monopoly more than forty times in 90 00:06:02,040 --> 00:06:05,920 Speaker 1: one hundred and eighteen pages. And this combination would create 91 00:06:06,000 --> 00:06:10,760 Speaker 1: an even larger monopoly. So how do they fight that? 92 00:06:11,200 --> 00:06:13,080 Speaker 1: Do they just ignore their prior arguments? 93 00:06:13,480 --> 00:06:17,120 Speaker 4: Well, but if someone say foolish consistency is the hobgoblin 94 00:06:17,200 --> 00:06:20,600 Speaker 4: of little minds, Yeah, they're not consistent. The question is 95 00:06:20,600 --> 00:06:24,120 Speaker 4: who's going to challenge them. So the PGA does monopolize 96 00:06:24,160 --> 00:06:26,880 Speaker 4: professional golf. There is no other so far as I know, 97 00:06:27,520 --> 00:06:31,839 Speaker 4: no other professional golf tour monopolies are allowed if they 98 00:06:31,880 --> 00:06:36,040 Speaker 4: succeed on their own skill, industry, and foresight and don't 99 00:06:36,040 --> 00:06:40,320 Speaker 4: do anything to exclude competition. What actually had gotten the 100 00:06:40,360 --> 00:06:45,400 Speaker 4: PGA into potential trouble was when they said to their golfer, 101 00:06:45,440 --> 00:06:48,080 Speaker 4: as well, you want to go play in some live 102 00:06:48,200 --> 00:06:50,840 Speaker 4: tour golf tournaments, he ain't ever going to play in 103 00:06:50,880 --> 00:06:55,000 Speaker 4: a PGA tour anymore. We will exclude you. Well, that's 104 00:06:55,040 --> 00:06:58,920 Speaker 4: potentially a violation of Section two of the Sherman Act, 105 00:06:59,000 --> 00:07:04,360 Speaker 4: which is monopolyzation engaging in exclusionary behavior to maintain your monopoly. 106 00:07:04,920 --> 00:07:09,760 Speaker 4: So yeah, I got understand why the Live Tour sued 107 00:07:09,800 --> 00:07:14,680 Speaker 4: them and why the players suited them who were adversely affected. So, yes, 108 00:07:14,720 --> 00:07:17,680 Speaker 4: they're monopoly. Will they become a bigger monopoly? So this 109 00:07:17,720 --> 00:07:21,480 Speaker 4: is where it's hard to know exactly because we don't 110 00:07:21,480 --> 00:07:24,040 Speaker 4: really know how this is going to shake out, how 111 00:07:24,040 --> 00:07:27,520 Speaker 4: it's going to be structured. So they haven't agreed to 112 00:07:27,680 --> 00:07:30,720 Speaker 4: a final deal. They don't want to call it a merger, 113 00:07:30,880 --> 00:07:33,240 Speaker 4: they want to call it a joint venture. It's I 114 00:07:33,280 --> 00:07:34,880 Speaker 4: have a feeling by the end they're just going to 115 00:07:34,920 --> 00:07:37,960 Speaker 4: call it an investment. So whatever they call it is, 116 00:07:38,240 --> 00:07:40,040 Speaker 4: you know, a lot is going to turn on how 117 00:07:40,080 --> 00:07:45,360 Speaker 4: it's structured and whether there is an agreement for the 118 00:07:45,520 --> 00:07:50,680 Speaker 4: Live Tour to be discontinued. So you know, in a 119 00:07:50,800 --> 00:07:54,680 Speaker 4: merger two firms become one and they don't compete against 120 00:07:54,720 --> 00:07:58,160 Speaker 4: each other, or a joint venture two firms become one. 121 00:07:58,320 --> 00:08:04,800 Speaker 4: So if that's the outcome that's negotiated, they are they 122 00:08:04,840 --> 00:08:07,320 Speaker 4: have a big any trust problem. And I'll put to 123 00:08:07,360 --> 00:08:08,880 Speaker 4: the side of the moment. Who's going to do something 124 00:08:08,920 --> 00:08:11,840 Speaker 4: about it? That's the next question. But as a straight 125 00:08:11,920 --> 00:08:15,320 Speaker 4: matter of anti trust and putting aside the identity of 126 00:08:15,360 --> 00:08:19,160 Speaker 4: the parties, and you know, the flags being waived in 127 00:08:19,240 --> 00:08:23,880 Speaker 4: the hearings Center Bloomenthal and the takeover of an American 128 00:08:23,920 --> 00:08:28,880 Speaker 4: institution apparently perfectly willing to be taken over, none of 129 00:08:28,920 --> 00:08:30,880 Speaker 4: that matters from the point of view of the any 130 00:08:30,880 --> 00:08:35,000 Speaker 4: trust laws. The identity good, bad, and different of the 131 00:08:35,040 --> 00:08:39,840 Speaker 4: owners of assets are irrelevant. It's the market outcomes that 132 00:08:39,920 --> 00:08:43,000 Speaker 4: are key. And you know, the Saudi's own lots of things, 133 00:08:43,400 --> 00:08:47,199 Speaker 4: and apparently we don't get quite as upset when they 134 00:08:47,200 --> 00:08:51,160 Speaker 4: buy refining assets, oil refining assets, you know, when they 135 00:08:51,160 --> 00:08:54,440 Speaker 4: buy all sorts of things. So I can understand the 136 00:08:54,440 --> 00:08:57,240 Speaker 4: emotion of this and maybe wanting to do something about it. 137 00:08:57,280 --> 00:09:00,800 Speaker 4: But from any trust laws, that really is irrelevant. 138 00:09:01,120 --> 00:09:03,640 Speaker 1: Does it fit anywhere else. I mean, why is in 139 00:09:03,800 --> 00:09:09,040 Speaker 1: sciphius The Committee on Foreign Investment in the US investigating this? 140 00:09:09,559 --> 00:09:13,679 Speaker 4: This is supposed to be national security, I you know, golf. 141 00:09:14,120 --> 00:09:18,199 Speaker 1: Apparently, though, Senator Ron Wyden, who's the chair of the 142 00:09:18,240 --> 00:09:23,439 Speaker 1: Senate Finance Committee, is investigating the deal for national security 143 00:09:23,480 --> 00:09:28,840 Speaker 1: implications due to the PGA tour's potential ownership interests in 144 00:09:28,960 --> 00:09:31,959 Speaker 1: real estate near US military facilities. 145 00:09:32,559 --> 00:09:35,920 Speaker 4: Remember when the Japanese wanted to take over Pebble Beach. 146 00:09:36,600 --> 00:09:39,920 Speaker 4: I mean, we've had other outside whos wanting to take 147 00:09:39,960 --> 00:09:43,200 Speaker 4: over key kinds of things like that. There was an uproar. 148 00:09:43,240 --> 00:09:46,760 Speaker 4: I don't think Syphius was invoked, and there was some talk, 149 00:09:46,800 --> 00:09:50,200 Speaker 4: as I recall, about, you know, the strategic location of 150 00:09:50,240 --> 00:09:53,080 Speaker 4: these calfboards. I mean, give us a break. I mean, 151 00:09:53,200 --> 00:09:57,080 Speaker 4: the PGA doesn't own real estate. So I'm not even 152 00:09:57,120 --> 00:10:00,200 Speaker 4: sure what Senator Widen's talking about. Maybe he's I had 153 00:10:00,320 --> 00:10:03,840 Speaker 4: some idea there. But we have enough problem trying to 154 00:10:03,880 --> 00:10:09,280 Speaker 4: apply Siphius to industries that are not defense, you know, 155 00:10:09,360 --> 00:10:14,080 Speaker 4: military defense, but are economically important. So we're down the 156 00:10:14,160 --> 00:10:16,760 Speaker 4: rung from that. I mean, golf is golf? Come on? 157 00:10:17,920 --> 00:10:21,560 Speaker 1: The Justice Department apparently has been investigating the PGA over 158 00:10:21,760 --> 00:10:25,960 Speaker 1: possible anti competitive practices for about a year. I mean, 159 00:10:25,960 --> 00:10:27,880 Speaker 1: does that mean it's not going anywhere if it's a 160 00:10:28,000 --> 00:10:29,920 Speaker 1: year in already and they haven't done anything. 161 00:10:30,320 --> 00:10:33,480 Speaker 4: First of all, there was ongoing private litigation, so I 162 00:10:33,480 --> 00:10:36,400 Speaker 4: don't know how deeply involved in an investigation, and Just 163 00:10:36,480 --> 00:10:40,960 Speaker 4: department's been stepping back. The Just Department could rationally say, 164 00:10:41,559 --> 00:10:44,840 Speaker 4: we have a lot of work. There are these huge mergers, 165 00:10:44,960 --> 00:10:48,760 Speaker 4: there are a lot of strains on our resources. Private 166 00:10:48,800 --> 00:10:51,720 Speaker 4: parties are pursuing the any trust claims and have you know, 167 00:10:51,840 --> 00:10:55,480 Speaker 4: good reasons to do that and are interested. We can 168 00:10:55,520 --> 00:10:59,679 Speaker 4: be more observers, maybe gather some information, but not front 169 00:10:59,720 --> 00:11:03,480 Speaker 4: burn or now. Once the litigation settled, which it did 170 00:11:03,559 --> 00:11:07,040 Speaker 4: recently as part of this framework agreement to which the 171 00:11:07,080 --> 00:11:11,319 Speaker 4: parties have apparently entered sort of an agreement to agree, 172 00:11:11,840 --> 00:11:17,840 Speaker 4: and PGA and Live Tours withdrew their litigation and apparently 173 00:11:17,880 --> 00:11:21,160 Speaker 4: the players did as well. So that would be reason 174 00:11:21,280 --> 00:11:24,600 Speaker 4: to step up Justice Department scrutiny because there's no now 175 00:11:24,720 --> 00:11:27,959 Speaker 4: no one on the field, and you know, a straight 176 00:11:28,280 --> 00:11:32,000 Speaker 4: antitrust metric is, you know, what's the impact on the economy, Well, 177 00:11:32,679 --> 00:11:35,599 Speaker 4: golf's impact isn't small. So what's their revenues? Over a 178 00:11:35,640 --> 00:11:40,000 Speaker 4: billion dollars a year for the PGA. So maybe they've 179 00:11:40,040 --> 00:11:43,920 Speaker 4: stepped up their inquiries. I mean, I don't think it's 180 00:11:44,120 --> 00:11:47,640 Speaker 4: a moth balled inquiry. I think they're active. But presumably 181 00:11:47,679 --> 00:11:51,000 Speaker 4: they're also waiting to see what the form of this 182 00:11:51,400 --> 00:11:56,120 Speaker 4: whatever it is, is going to take, because that will determine, 183 00:11:56,600 --> 00:12:01,440 Speaker 4: you know, how the Justice Department will proceed, if at all. Again, now, 184 00:12:01,800 --> 00:12:06,480 Speaker 4: what I don't know is whether there's pressure on the 185 00:12:06,600 --> 00:12:12,040 Speaker 4: Justice Department and a trust division from other parts of 186 00:12:12,200 --> 00:12:18,200 Speaker 4: the administration that I don't know. And this is a 187 00:12:18,280 --> 00:12:23,680 Speaker 4: possible explanation for why it's slow. You know, that's just possible. 188 00:12:23,960 --> 00:12:25,960 Speaker 4: The only reason why I raise it, and the only 189 00:12:26,000 --> 00:12:30,560 Speaker 4: fact I have is the Justice Department has not tackled Opek, 190 00:12:31,040 --> 00:12:33,840 Speaker 4: even though there are good arguments for why I could. 191 00:12:34,360 --> 00:12:38,000 Speaker 4: There have been for many years and it hasn't happened. 192 00:12:38,360 --> 00:12:42,120 Speaker 4: So obviously, the relations with the Saudis are an important 193 00:12:42,120 --> 00:12:43,480 Speaker 4: diplomatic issue. 194 00:12:43,720 --> 00:12:48,439 Speaker 1: So, Harry, the Justice Department opposed that Penguin Random House 195 00:12:48,520 --> 00:12:52,000 Speaker 1: deal on the grounds that it would hurt authors. So 196 00:12:52,040 --> 00:12:55,240 Speaker 1: do you think here they'll look at the player compensation. 197 00:12:54,760 --> 00:12:59,000 Speaker 4: It's a natural This is why, from the Justice Department's 198 00:12:59,040 --> 00:13:02,640 Speaker 4: point of view, take the Saudis out of it. There 199 00:13:02,800 --> 00:13:06,720 Speaker 4: are sort of free good reasons markers on this case 200 00:13:06,760 --> 00:13:09,720 Speaker 4: for going ahead. One is the recent win against the 201 00:13:09,760 --> 00:13:14,600 Speaker 4: airlines that I mentioned, very strong opinion in favor of 202 00:13:14,720 --> 00:13:19,959 Speaker 4: the Justice Department's position. This looks worse because the alliance 203 00:13:20,000 --> 00:13:24,120 Speaker 4: between American Airlines and Jet Blue wasn't an agreement to 204 00:13:24,920 --> 00:13:28,200 Speaker 4: monopolize the market. There was still another competitor here, there's 205 00:13:28,240 --> 00:13:31,520 Speaker 4: no other competitor. There's an agreement to quash the other competitor, 206 00:13:31,679 --> 00:13:34,520 Speaker 4: if that's what it turns out to be. So that's 207 00:13:34,559 --> 00:13:38,240 Speaker 4: the first. Second marker is the Justice Department always insists 208 00:13:38,280 --> 00:13:42,920 Speaker 4: on relatively narrow markets that can form to how commercial 209 00:13:42,960 --> 00:13:47,480 Speaker 4: realities are. So golfing rights, the rights to broadcast, and 210 00:13:47,520 --> 00:13:50,720 Speaker 4: whatever other rights are sold separately from other sports. Apartment 211 00:13:50,760 --> 00:13:53,280 Speaker 4: has always taken the view that, you know, sports sort 212 00:13:53,280 --> 00:13:56,360 Speaker 4: of stand on its own, and individual kinds of sports 213 00:13:56,400 --> 00:13:59,120 Speaker 4: stand on its own. So pro football is different from 214 00:13:59,600 --> 00:14:03,400 Speaker 4: college football. So that's number two. And you've mentioned number three, 215 00:14:03,920 --> 00:14:07,920 Speaker 4: which is the Justice Department's concerned for labor markets. Of course, 216 00:14:08,040 --> 00:14:10,920 Speaker 4: it's always a little irony that the working man. That's 217 00:14:11,000 --> 00:14:13,880 Speaker 4: just Department's standing up for. Are you know, authors with 218 00:14:13,960 --> 00:14:17,520 Speaker 4: million dollar advances and golfers you know who get million 219 00:14:17,600 --> 00:14:22,320 Speaker 4: dollars payout on winning golf tournaments, but are labor markets 220 00:14:22,360 --> 00:14:25,840 Speaker 4: and clear potential impact. In fact, that's what in a 221 00:14:25,920 --> 00:14:30,400 Speaker 4: sense has driven this rivalry is a competition for players, 222 00:14:30,560 --> 00:14:32,920 Speaker 4: and how do you compete for players? You're back to 223 00:14:33,000 --> 00:14:35,400 Speaker 4: what was that first word you mentioned begins with. 224 00:14:35,320 --> 00:14:37,560 Speaker 1: An m money. 225 00:14:37,680 --> 00:14:42,040 Speaker 4: Money, money, money, So yes, you're right. Certainly the Justice 226 00:14:42,040 --> 00:14:46,320 Speaker 4: Department has been stressing and the Bied administration that we 227 00:14:46,400 --> 00:14:49,240 Speaker 4: haven't paid adequate attention to impact on labor markets. 228 00:14:49,680 --> 00:14:55,160 Speaker 1: So apparently the PGA and PIF have removed a clause 229 00:14:55,600 --> 00:14:59,080 Speaker 1: called a non solicitation clause in which they agreed to 230 00:14:59,080 --> 00:15:02,280 Speaker 1: stop poaching players. What impact does that have? 231 00:15:03,040 --> 00:15:07,160 Speaker 4: There was this no solicitation agreement for the rest of 232 00:15:07,200 --> 00:15:11,640 Speaker 4: the live tour, they couldn't solicit PGA tour members I 233 00:15:11,640 --> 00:15:14,560 Speaker 4: guess vice versa. So they agreed to remove that restriction. 234 00:15:14,960 --> 00:15:19,080 Speaker 4: They are not bound by this no solicitation thing. But 235 00:15:19,440 --> 00:15:21,400 Speaker 4: in the end, the idea is to put them all, 236 00:15:21,440 --> 00:15:25,520 Speaker 4: as the agreement says, under one roof. So lifting this 237 00:15:25,680 --> 00:15:28,640 Speaker 4: now is fine for now, but meaningless for the long 238 00:15:28,720 --> 00:15:32,240 Speaker 4: run because they're all going to be in the same corporation. 239 00:15:33,000 --> 00:15:35,760 Speaker 4: You know, it's not even clear you know, what's going 240 00:15:35,800 --> 00:15:38,120 Speaker 4: to be called a live tour and they haven't negotiated this. 241 00:15:38,240 --> 00:15:41,440 Speaker 4: I guess what's going to remain of that or whatever. 242 00:15:41,520 --> 00:15:43,720 Speaker 4: But whatever it is, they're all going to be managed 243 00:15:43,760 --> 00:15:45,880 Speaker 4: by the same company. They're not going to compete. 244 00:15:46,480 --> 00:15:48,360 Speaker 1: I don't think this is your area, but I'll ask 245 00:15:48,440 --> 00:15:52,400 Speaker 1: you anyway. So, the PGA is currently a tax exempt 246 00:15:52,560 --> 00:15:57,280 Speaker 1: nonprofit and it wants to keep that nonprofit status, and 247 00:15:58,040 --> 00:16:00,520 Speaker 1: will it be able to once it's funded by one 248 00:16:00,520 --> 00:16:05,080 Speaker 1: of the world's biggest sovereign wealth funds, and Blumenthal said 249 00:16:05,240 --> 00:16:09,040 Speaker 1: it raises questions about whether a foreign government may indirectly 250 00:16:09,080 --> 00:16:12,680 Speaker 1: benefit from provisions in US tax laws mean to promote 251 00:16:12,800 --> 00:16:16,160 Speaker 1: not for profit business associations. So do you think it's 252 00:16:16,280 --> 00:16:19,000 Speaker 1: tax exem status is in jeopardy? 253 00:16:19,520 --> 00:16:22,480 Speaker 4: So your first premise is correct, partly an area of 254 00:16:22,480 --> 00:16:25,080 Speaker 4: expertise for me, although you know more about it from 255 00:16:25,080 --> 00:16:27,480 Speaker 4: what you've asked me than I do. But my guess 256 00:16:27,640 --> 00:16:30,680 Speaker 4: is that however they structure this, they'll structure it in 257 00:16:30,760 --> 00:16:35,520 Speaker 4: a way that's most likely to retain the tax exem status. 258 00:16:35,600 --> 00:16:38,920 Speaker 4: I'm ensure that sufficient amounts are paid out to charities. 259 00:16:39,040 --> 00:16:44,320 Speaker 4: I mean, presumably people put money into not for profit companies. 260 00:16:44,600 --> 00:16:47,000 Speaker 4: That would be an issue for their tax advisors to 261 00:16:47,120 --> 00:16:50,280 Speaker 4: make it happen, and if they can't deal with the consequence. 262 00:16:50,520 --> 00:16:53,600 Speaker 1: I always appreciate your insights, Harry, thanks so much. That's 263 00:16:53,600 --> 00:16:56,240 Speaker 1: Professor Harry First of NYU Law School.