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Sen. Roger Marshall (R-Kan.) winced at the hypothetical question about his favorite professional team: Would he mind if a Middle East-backed mutual fund took a stake in the Kansas City Chiefs?
Marshall, who grew up west of the reigning Super Bowl champion, wasn’t sure what to think. “As long as it’s not a national security issue, I’m fine,” he said, “but I think I’ll have to study it a little more closely to see what am I missing here?”
Marshall’s response came late Tuesday, hours after the Senate Standing Subcommittee on Investigations concluded a lengthy hearing examining the Saudi Public Investment Fund’s attempted merger with the PGA Tour after more than a year of bitter rivalry.
The hearing, chaired by Sen. Richard Blumenthal (D-Conn.), more than fulfilled its original purpose by shedding light on the golf’s leading trade association’s controversial about-face to closing guns and checkbooks with its rival.
A 265-page report summarizing the preliminary findings of the exploratory exercise, which lasted just a few weeks, clarified the extent to which PIF Governor Yasir Al-Rumayyan wishes to be considered a member of golf’s world elite: he proposed tournaments that would culminate in a championship event played in Saudi Arabia and sought membership of the Augusta National Golf Club.
But the subcommittee report and first hearing fail to capture the magnitude of what is unfolding before the eyes of American sports fans.
“Sportswashing,” as the term is used for authoritarian regimes looking to rehabilitate their image, has landed here in the United States in more ways than Washington’s leaders are realizing. With no attempt to set official parameters, these foreign sovereign wealth funds — endowed with hundreds of billions of dollars from oil fields — will soon play a very large role in US esports, perhaps even in Super Bowl-winning NFL teams.
“This is the next frontier of foreign influence,” said Ben Freeman, research expert on foreign influence at the Quincy Institute for Responsible Statecraft, in an interview.
After investing in European esports for more than a decade, these private funds are increasing their presence in the US, with a focus here on esports in Washington.
One of America’s premier tennis events, the Citi Open, held about three miles north of the White House every August since 1969, has been renamed the Mubadala Citi DC Open. It reflects a merger with a women’s tournament in San Jose that will ensure a stronger field here in Washington – as the event’s main sponsor is now the $276 billion sovereign wealth fund, which manages assets for the United Arab Emirates.
Following the NBA’s decision in December to allow such state-backed funds a 20 percent stake in its teams, Washington-based group Monumental Sports & Entertainment announced that it would sell a 5 percent stake to the state-owned Qatar Investment Authority.
Monumental owns the NBA’s Washington Wizards, the NHL’s Capitals and the WNBA’s Mystics, while the Washington Post has reported that CEO Ted Leonsis has offered the Lerner family $2 billion to buy the MLB’s Washington Nationals.
If the Qatari funds are approved, there is no telling when their stake could be increased further, giving Leonsis more leeway to buy the Nationals and rebuild the team, which is a long way from its 2019 World Series championship.
Although Qatar’s human rights record is a step ahead of the Saudi kingdom — which ordered the assassination of post-columnist Jamal Khashoggi and opponents of the monarchy face harsh prison sentences — homosexuality is illegal in Qatar. Human Rights Watch reported last year on the detention and abuse of LGBTQ+ people while security forces demanded conversion therapy from detained transgender women.
Arbitrary detention, torture and other measures against gay rights are commonplace in the United Arab Emirates.
What happens when the top sports franchises and events in the nation’s capital, the supposed leader of the free world, sell stock to these autocratic wealth funds? And when can the Saudi PIF become the world’s largest revenue stream for golf?
“If we hand ourselves over to countries that have hundreds of billions of dollars to spend, we will lose not only financially, but also in terms of our democracy and freedom and institutions like golf,” Blumenthal said near the end of Tuesday’s hearing. “Sport is of central importance for our society, for our culture, for our economy, for our way of life, for our self-image and our image abroad.”
But few other top lawmakers seem as concerned about sports laundering and the imminent surge in foreign involvement in US esports. The four Republicans in attendance all gave their tacit blessings for the Saudi investment, which PGA officials said would be “more than $1 billion” to create a $3 trillion travel industry and assets.
They agreed with the PGA that Saudi-backed competitor LIV Golf could simply lose money for years by paying ridiculous amounts to poach players and devaluing the PGA’s golf product to the point that their traditional sponsors would pull out .
“Let’s give them the time and space to complete a deal that can actually be a win-win for everyone involved,” said Sen. Ron Johnson (Wis.), the panel’s top Republican.
Sen. Rick Scott (R-Fla.) simply thanked the PGA officials for boosting his state’s economy with the approximately ten tournaments held there each year.
Sen. Josh Hawley (R-Mo.) voiced the rare condemnation of the Tour’s work with an autocratic country committing human rights abuses – but his concern was the PGA’s burgeoning deals with China.
“You are an evil regime when you treat your own people like slaves and that is what you are doing. You are an evil regime. I don’t want American institutions to be co-opted by this regime,” Hawley said.
“Thank you, Senator Hawley. And that’s exactly why we’re here today,” said Blumenthal.
Marshall also condemned China for its attempts to change its image by hosting the Olympics, but stated that the merging of golf was not worth Congress’ time.
“Nobody at home,” he said, “has asked me, ‘Hey, why do you think — what does the Senate think of this merger?’
Other Democrats lacked Blumenthal’s focus. Senator Alex Padilla (California) used his time to urge PGA officials to pay hefty compensation to golfers who stayed loyal and did not seek the additional millions of LIV’s PIF. He also condemned the breakaway Golf Tour for not respecting manufacturing workers’ union rights.
In the audience were members of 9/11 Families United, a group that campaigns for services to survivors of the 2001 terrorist attacks. They used to be incredibly powerful – Blumenthal co-authored the legislation that allowed them to sue Saudi interests they say were implicated in the attacks.
Now Blumenthal is back, albeit with fewer allies. He is upset that PGA officials are not allowing other large investment funds not managed by autocratic regimes, such as B. Private Equity, have not fully pursued to provide the necessary funds to ward off LIV’s challenge.
Blumenthal plans further hearings that will uncover more documents with possible testimonies from PGA golfers, but he’s trying to make it clear that this is just the beginning of the foreign influx into sports ownership.
The NFL is the rare major US sports organization that doesn’t allow foreign funding or ownership of its teams, leaving Marshall’s beloved Chiefs safe in the hands of the Hunt family, who helped found the team in the early 1960s.
Upon closer inspection, he admitted he doesn’t want the team owned by anyone else. “I would hate if the Chiefs had anyone other than the Hunts owning the team,” he said.
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