PGA Tour-LIV Golf merger is a major win for the Saudis — and Americans are slamming it

• The two-year-long fight between the PGA Tour and Saudi Arabia's LIV Golf came to a stunning conclusion with the Tuesday news that the archrivals are now joining forces.
• American lawmakers, commentators and sports fans are calling the deal "hypocritical" and accusing the PGA Tour of taking "Saudi blood money" and "sportswashing."
• Financial analysts say the merger will elevate golf globally and give it new resources to expand its fan base.

The two-year-long fight between the PGA Tour and Saudi Arabia's LIV Golf ended with a stunning announcement that the archrivals are now joining forces — news that's been met with derision by many American commentators, lawmakers and golf fans.

The decision, announced Tuesday, concluded a battle for golf's best players and prompted an about-face from the PGA Tour, which had in a previous lawsuit accused Saudi Arabia of offering athletes "astronomical sums of money ... to use the LIV Players and the game of golf to sportswash the recent history of Saudi atrocities."

It also ends pending litigation between the two organizations. The agreement, which includes the DP World Tour — also known as the PGA European Tour — will combine the commercial businesses and rights of the PGA Tour and LIV Golf into a new, yet-to-be-named for-profit company.

Founded in 2021 with the goal of becoming the world's premier professional golf tour, LIV Golf is backed by Saudi Arabia's Public Investment Fund (PIF) — a massive $600 billion sovereign wealth fund controlled by Saudi Crown Prince Mohammed bin Salman. It's lured some of the biggest golf stars away from the PGA Tour with huge paychecks, spurring antitrust lawsuits with the American organization.

"The game of golf is better for what we've done today," PGA Tour Commissioner Jay Monahan told CNBC in an interview after the news broke.

A lot of people vocally disagree.

"This is Saudi Arabia buying the PGA tour," sports talk show host Rich Eisen said in his broadcast after hearing the news.

"The hypocrisy is obvious. The PGA Tour takes the Saudi money after 2 years grandstanding against it," North Carolina-based sports reporter Pat Welter wrote on Twitter. "They sold their soul to #LIVGolf and where it's really going to cost them is control. Because the person signing the checks always wins."

USA Today sports columnist Christine Brennan called the move "a total wimp-out by the PGA Tour. Just an awful about-face," saying the organization "caved to Saudi blood money. PGA Tour now in sports-washing business."

As part of the agreement, the Saudi PIF is now the exclusive investor in the new golf entity, and it has the right of first refusal on any new investment.

Social media was rife with self-described golf fans vowing to never again watch the PGA Tour. Even golfing legend Tiger Woods, who previously turned down an offer from the LIV Tour that could have earned him more than $700 million, criticized the Saudi league before the merger was announced, saying late last year that "an endless pit of money" was not a way to "create legacies."

'Shameless cash grab'

Members of Congress weighed in, too.

"Hypocrisy doesn't begin to describe this brazen, shameless cash grab. I'm going to dive into every piece of Saudi Arabia's deal with the PGA," Democratic Oregon Sen. Ron Wyden wrote on Twitter. "U.S. officials need to consider whether a deal will give the Saudi regime inappropriate control or access to U.S. real estate."

Democratic Connecticut Sen. Chris Murphy wrote in a Twitter post, "So weird. PGA officials were in my office just months ago talking about how the Saudis' human rights record should disqualify them from having a stake in a major American sport. I guess maybe their concerns weren't really about human rights?"

CNBC has reached out to the PGA Tour for comment.

Saudi Arabia has long been criticized for its human rights record, which includes the imprisonment and execution of political dissidents, mass beheadings, harsh penalties including death for members of the LGBT community, and the high-profile killing of Washington Post journalist Jamal Khashoggi in 2018 by Saudi agents.

The kingdom is driving an aggressive campaign to promote its image as a reformed, socially liberalizing country as a key part of the crown prince's Vision 2030 — an ambitious, multitrillion-dollar plan to modernize the country and end its dependence on oil revenues.

Arrests over expressions of dissent have nevertheless continued.

'Sportswashing at its finest'

Human rights group Amnesty International called the merger "sportswashing at its finest," saying "we must not allow this announcement to overshadow Saudi Arabia's atrocious human rights record."

Further criticism came from family members of victims of the Sept. 11 terrorist attacks, via the organization 9/11 Families United, which the PGA Tour previously invoked in its attacks on LIV Golf.

"PGA Commissioner Jay Monahan co-opted the 9/11 community last year in the PGA's unequivocal agreement that the Saudi LIV project was nothing more than sportswashing of Saudi Arabia's reputation," the group said in a statement Tuesday. "But now the PGA and Monahan appear to have become just more paid Saudi shills."

Fifteen of the 19 hijackers on Sept. 11 were from Saudi Arabia, and U.S. officials concluded that Saudi nationals helped fund the terrorist group al-Qaeda, although investigations did not find that the Saudi officials were complicit in the attacks.

CNBC contacted Saudi Arabia's embassy in Washington, D.C., and the Saudi Foreign Ministry for comment. The Saudi government generally denies accusations of human rights abuses and says it acts to safeguard its national security and stability.

'Immense potential to elevate the sport of golf'

Not everyone is angry about the deal.

Professional golfer Bryson DeChambeau, an early recruit to the LIV Tour, told CNN that the merger "is the best thing that could ever happen for the game of golf and I am extremely proud to get to be a part of that ... in the end the game of golf wins."

In response to the statement from 9/11 Families United, DeChambeau said of the Saudis, "What they're trying to do ... is to be better allies ... they are trying to do good for the world and showcase themselves in a light that hasn't been seen in awhile, and nobody's perfect but we're all trying to improve in life."

Pro golfer Phil Mickelson, another member of the LIV Tour, tweeted "Awesome day today" in response to the news.

Investment banking firm Jeffries wrote in a note Tuesday that "this unexpected agreement holds immense potential to elevate the sport of golf to new heights ... the infusion of capital from PIF signifies a strong commitment to the growth and promotion of golf on a global scale." The PIF's investment figure is not yet publicly known.

In a memo to players obtained by CNBC, Monahan called the deal "a transformational agreement" and said that "with PIF's collaborative investment, the immeasurable strength of the PGA Tour's history, legacy and pro-competitive model not only remains intact, but is supercharged for the future."

The board of the new commercial entity will include PIF Governor Yasir Al-Rumayyan as chairman and Monahan as CEO.

The Saudi PIF on a mission

The PIF has in the past few years bought up stakes in major blue chip companies including Amazon, Uber, Alphabet, Microsoft, Boeing, Bank of America, Disney and Meta.

The mammoth fund, with estimated assets of more than $600 billion, is aggressively expanding into sports, hosting a Formula One Grand Prix and major boxing matches and buying British Premier League soccer team Newcastle United.

Saudi Arabia also lured soccer legends Cristiano Ronaldo and Karim Benzema with contracts worth hundreds of millions of dollars to play in local Saudi leagues, and it's expected to bid to host the 2030 World Cup.

As one sports journalist pointed out at the time of Ronaldo's signing with Saudi team Al-Nassr, the kingdom wasn't paying top dollar just for a nearly retired athlete to play on its globally obscure team. It was paying for his following, for a new level of international reach to promote its image via one of the most-followed celebrities in the world.

Pro golfer Rory McIlroy was one of the players that refused to join LIV as it fought with the PGA Tour, calling the Saudi venture a "money grab." But sports analysts note that whether he likes it or not, McIlroy now works for LIV, too — as does every pro in the PGA Tour, many of whom only learned about the merger via Twitter.

— CNBC's Lillian Rizzo contributed to this report.

Correction: Rory McIlroy is a professional golfer. An earlier version misspelled his name.