Business
Trump Met PGA Commissioner About Saudi Golf Tour Deal
President Trump met this week with the PGA Tour commissioner, the tour said on Thursday, as the Justice Department considers whether to approve a venture between the United States’ premier golf circuit and one backed by Saudi Arabia’s sovereign wealth fund.
The meeting at the White House on Tuesday was an unusual foray for an American president into global sports diplomacy but squared with his decades-long ambitions to act as a sports power broker. It was also the latest expression of his closeness to LIV Golf, the Saudi-backed tour.
In addition to the PGA Tour commissioner, Jay Monahan, Mr. Trump hosted Adam Scott, who won the Masters Tournament in 2013 and sits on the PGA Tour’s board.
During the Oval Office meeting, Mr. Trump also spoke by telephone with Yasir al-Rumayyan, the Saudi wealth fund’s governor and one of the most influential figures in Saudi Arabia, according to two people familiar with the session who spoke on the condition of anonymity to describe the private talks.
“We asked the president to get involved for the good of the game, the good of the country and for all the countries involved,” Mr. Monahan, Mr. Scott and Tiger Woods said in a joint statement on Thursday afternoon after The New York Times asked on Wednesday night about the meeting. “We are grateful that his leadership has brought us closer to a final deal, paving the way for reunification of men’s professional golf.”
Mr. Woods, the most celebrated player of his generation and another member of the tour’s board, had been scheduled to attend but did not participate because of the death of his mother, according to one of the people briefed on the meeting.
Mr. Woods’s agent did not respond to a request for comment. The wealth fund did not comment.
Since LIV thundered onto the professional golf scene three years ago, Mr. Trump, stung by the professional golf establishment’s distancing itself from him after his entry into politics, has been one of its most steadfast supporters and one of its most essential vendors.
His company has hosted LIV tournaments at courses up and down the East Coast — the circuit is scheduled to return to Trump National Doral, near Miami, in April — and Mr. Trump has been a regular presence. As he played in LIV’s professional-amateur competitions, he would routinely denigrate the PGA Tour and praise its rival and its Saudi patrons to anyone who would listen.
Now Mr. Trump is acting as something of a mediator for the prestigious American tour and the Saudi upstart that defied legions of naysayers to become a force in the sport. On Wednesday, the U.S. Open’s organizer announced a smoother pathway for LIV players to compete at the event, one of the sport’s four major tournaments.
Only two years ago, such a détente seemed improbable. The PGA Tour and LIV had spent 2022 and the first months of 2023 at bitter odds, as the Saudi league swept in to sign well-established stars to some of the most lucrative deals in sports history. LIV encouraged the Justice Department to investigate the PGA Tour for potential violations of antitrust law, and the tour spent months denouncing LIV and its Saudi financiers.
But in June 2023, after about two months of secret talks that stretched from San Francisco to Venice, the tour and LIV abruptly announced a plan to try to combine their businesses. The tentative agreement led to a truce of sorts in their clash over power, money and morality in global sports.
The two sides have yet to close a final deal, though. Federal antitrust officials have been reviewing a term sheet that called for the wealth fund to put $1.5 billion into a commercial arm that the PGA Tour and a group of top American sports investors created.
Justice Department officials have been particularly attuned to whether LIV and the PGA Tour, whose tournaments differ in format and length, are direct rivals and whether a deal might stifle competition in the United States.
In December, Mr. Woods said the talks were “very fluid,” though he also described them as “constructive.”
Mr. Trump, an avid golfer, has spent years predicting some kind of deal between the PGA Tour and LIV. But even as he enjoyed rounds with top players, Mr. Trump has had a complex relationship with America’s golf elite in recent years.
The PGA Tour, which used to hold events at the Trump property in Doral, Fla., ended its relationship with Mr. Trump’s company during the 2016 campaign. Tim Finchem, who was then the tour’s commissioner, said the move was not “a political exercise” but “fundamentally a sponsorship issue.”
Mr. Trump also had a particular falling-out with the P.G.A. of America, which pulled its men’s championship tournament from a Trump course after the Jan. 6, 2021, riot at the Capitol. The Trump Organization and the group, which is distinct from the PGA Tour, later reached a settlement.
Soon after his election in November, Mr. Trump signaled his continued interest in the fate of professional golf’s negotiations. As president-elect, Mr. Trump hosted Mr. Monahan for a round of golf at Trump International Golf Club in West Palm Beach, Fla. The next day, he saw Mr. al-Rumayyan at an event in New York.
Asked in November whether Mr. Trump could perhaps break the logjam, Rory McIlroy, one of the world’s top players, replied, “He might be able to.”
“Obviously Trump has a great relationship with Saudi Arabia,” added Mr. McIlroy, a former PGA Tour board member who played with Mr. Trump in 2017. “He’s got a great relationship with golf. He’s a lover of golf. So, maybe. Who knows? But I think as the president of the United States again, he’s probably got bigger things to focus on than golf.”
But for at least a short time on Tuesday, the day he publicly floated an American takeover of Gaza, Mr. Trump was firmly focused on golf.
In an expansion of its business of processing pharmaceuticals in Earth’s orbit, Varda Space Industries is renting a large El Segundo plant where toy manufacturer Mattel used to design Hot Wheels and Barbie dolls.
The plant in El Segundo’s aerospace corridor will be an extension of Varda Space Industries’ headquarters in a much smaller building on nearby Aviation Boulevard.
Varda will occupy a 205,443-square-foot industrial and office campus at 2031 E. Mariposa Ave., which will give it additional capacity to manufacture spacecraft at scale, the company said.
Originally built in the 1940s as an aircraft facility, the complex has a history as part of aerospace and defense industries that have long shaped the South Bay and is near a host of major defense and space contractors. It is also close to Los Angeles Air Force Base, headquarters to the Space Systems Command.
Workers test AstroForge’s Odin asteroid probe, which was lost in space after launch this year.
(Varda Space Industries)
Varda is one of a new generation of aerospace startups that have flourished in Southern California and the South Bay over the last several years, particularly in El Segundo, often with ties to SpaceX.
Elon Musk’s company, founded in 2002 in El Segundo, has revolutionized the industry with reusable rockets that have radically lowered the cost of lifting payloads into space. Though it has moved its headquarters to Texas, SpaceX retains large-scale operations in Hawthorne.
Varda co-founder and Chief Executive Will Bruey is a former SpaceX avionics engineer, and the company’s spacecraft are launched on SpaceX’s workhorse Falcon 9 rockets from Vandenberg Space Force Base in Santa Barbara County.
Varda makes automated labs that look like cylindrical desktop speakers, which it sends into orbit in capsules and satellite platforms it also builds. There, in microgravity, the miniature labs grow molecular crystals that are purer than those produced in Earth’s gravity for use in pharmaceuticals.
It has contracts with drug companies and also the military, which tests technology at hypersonic speeds as the capsules return to Earth.
Its fifth capsule was launched in November and returned to Earth in late January; its next mission is set in the coming weeks. Varda has more than 10 missions scheduled on Falcon 9s through 2028.
For the last several decades, the Mariposa Avenue property served as the research and development center for Mattel Toys. El Segundo has also long been a center for the toy industry as companies like to set up shop in the shadow of Mattel.
The Mattel facility “has always been an exceptional property with a legacy tied to aerospace innovation, and leasing to Varda Space Industries feels like a natural continuation of that story,” said Michael Woods, a partner at GPI Cos., which owns the property.
“We are proud to support a company that is genuinely pushing the boundaries of what’s possible, and are excited to watch Varda grow and thrive here in El Segundo,” Woods said.
As one of the country’s most active hubs of aerospace and defense innovation, El Segundo has seen its industrial property vacancy fall to 3.4% on demand from space companies, government contractors and technology startups, real estate brokerage CBRE said.
Successful startups often have to leave the neighborhood when they want to expand, real estate broker Bob Haley of CBRE said. The 9-acre Mattel facility was big enough to keep Varda in the city.
Last year, Varda subleased about 55,000 square feet of lab space from alternative protein company Beyond Meat at 888 Douglas St. in El Segundo, which it started moving into in June.
Varda will get the keys to its new building in December and spend four to eight months building production and assembly facilities as it ramps up operations. By the end of next year, it expects to have constructed 10 more spacecraft.
In the future, Varda could consolidate offices there, given its size. Currently, though, the plan is to retain all properties, creating a campus of three buildings within a mile of one another that are served by the company’s transportation services, Chief Operating Officer Jonathan Barr said.
“We already have Varda-branded shuttles running up and down Aviation Boulevard,” he said.
Ships near the Strait of Hormuz before and after attacks began
Every day, around 80 oil and gas tankers typically pass through the Strait of Hormuz, the narrow waterway off Iran’s southern coast that carries a fifth of the world’s oil and a significant amount of natural gas.
On Monday, just two oil and gas tankers appear to have crossed the strait, according to a New York Times analysis of shipping activity from Kpler, an industry data firm. Since then, one tanker passed through.
“It’s a de facto closure,” said Dan Pickering, chief investment officer of Pickering Energy Partners, a Houston financial services firm. “You’ve got a significant number of vessels on either side of the strait but no one is willing to go through.”
Tankers have been staying away from Hormuz since the U.S.-Israeli attacks on Iran that began on Saturday. A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation.
International oil prices have climbed 12 percent since the fighting began, trading Tuesday around $81 a barrel, and natural gas prices have surged in Europe and in Asia.
A senior Iranian military official threatened on Monday to “set on fire” any ships traveling through the Strait of Hormuz. Vessels in the region have already come under attack. Several oil and gas facilities have also been struck or affected by nearby shelling, though the damage did not initially appear to be catastrophic.
Where ships and energy facilities have been damaged
A fire broke out Tuesday at a major energy hub in Fujairah, United Arab Emirates, from the falling debris of a downed drone, the authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so that it can be transported on ships, after attacks on its facilities.
The sharp reduction in tanker traffic is reducing the supply of oil and gas to world markets, pushing up prices for both commodities. And the longer that ships stay away from the Strait of Hormuz, the less oil and gas get out to the world, which could raise prices even more.
Shipping companies have paused their tankers to protect their crew and cargo, and because insurance companies are charging significantly more to cover vessels in the conflict area.
On Tuesday, President Trump said that “if necessary,” the U.S. Navy would begin escorting tankers through the strait. He also said a U.S. government agency would begin offering “political risk insurance” to shipping lines in the area.
In addition to tankers, other large vessels regularly go through the strait, including car carriers and container ships. In normal conditions, nearly 160 make the trip each day.
Some ships in the region turn off the devices that broadcast their positions, while others transmit false locations — making it hard to give a full picture of the traffic in the strait.
The Shiva is a small oil tanker that has repeatedly faked its location, according to TankerTrackers.com, which tracks global oil shipments. It is suspected of carrying sanctioned Iranian oil, according to Kpler. The Shiva was one of the two tankers that crossed the strait on Monday.
The oil and gas that typically move through the strait come from big producing countries like Saudi Arabia, Iraq, Iran and United Arab Emirates, and are exported around the world.
Where tankers moving through the Strait have traveled
In 2024, more than 80 percent of the oil and gas transported through the Strait of Hormuz went to Asia. China, India, Japan and South Korea were the top importers, according to the U.S. Energy Information Administration.
Countries have energy stockpiles that could last them into the coming months, but a continued shutdown of the strait could damage their economies.
Several big disruptions have roiled supply chains in recent years, but the tanker standstill in the Strait of Hormuz could have an outsize impact.
Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:
Call it the deal-debt hangover.
Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.
Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.
S&P Global Ratings took similar action.
To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.
“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.
Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.
Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.
Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.
Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.
Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.
Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.
(Evan Agostini / Invision / AP)
Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.
Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.
Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.
Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.
Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.
During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.
Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”
It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.
Workers are scattered throughout the region.
HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.
“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”
David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.
Ellison has not announced what the combined company will be called.
Paramount shares closed down more than 6% Tuesday to $12.45.
Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.
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