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PGA Tour vs. LIV Golf: The Fate of Professional Golf Heading for Legal Showdown

July 19, 2022

By Lindsey Lambert

The Wall Street Journal reported that the Department of Justice is investigating the PGA Tour over potential antitrust violations. All of the sudden, the PGA Tour’s monopoly is under attack, and the future of professional golf is up in the air.

Fueled by the mass appeal of superstars such as Arnold Palmer, Jack Nicklaus and Tiger Woods, the PGA Tour has long been the dominant global showcase to which professional golfers worldwide aspired. At the start of this year, it was still the only professional golf tour of serious importance, with projected 2022 revenues of $1.5 billion.

Enter the LIV Golf Invitational Series, which features an innovative new 54-hole tournament format and launched in June with an eight-event schedule for 2022. The start-up tour is headed by former PGA Tour champion and World Golf Hall of Fame member Greg Norman.

If this was just a rival tour trying to attract some sponsorship money to fund purses, that would be one thing. But LIV Golf is financially backed by Saudi Arabia’s Public Investment Fund, which has pledged a stunning $2 billion investment to fund the tour’s ongoing expansion and prize money.

The cards began to fall this summer. Two of the biggest names in professional golf — Phil Mickelson and Dustin Johnson — announced they would play in LIV Golf events and other players soon followed. PGA Tour stars Rory McIlroy and Justin Thomas responded with outspoken criticism of their fellow players who would take money from the Saudi-backed rival and reaffirmed their loyalty to the PGA.

“A tug of war for hearts and minds — and bank accounts — has broken out and most professional golfers will have to choose sides,” reports ESPN.com.

This tug of war now appears headed for a legal showdown that could decide the fate of professional golf for the next generation of players and fans.

At issue is the decision by PGA Tour Commissioner Jay Monahan that members will not be allowed to play both the PGA Tour and the LIV series. Mr. Monahan denied every request from a PGA Tour member who sought a release to play in the first LIV event and several other players pro-actively resigned their tour memberships to avoid the hassle. As soon as each PGA Tour player struck their first tee shots in a LIV tournament, Mr. Monahan announced the suspension of 17 players from the Tour.

While some players have chosen to skip the legal drama altogether and have aligned exclusively with the LIV Tour, other high-profile players such as Mr. Mickelson and Bryson DeChambeau insist they have no intentions of resigning from the PGA Tour and have simultaneously signed huge long-term contracts to play in LIV events.

The two sides have now dug in and, with the LIV Golf organization promising to pay legal fees incurred by any of their players, the stage appears to be set for a legal battle to resolve a basic question: Are professional golfers free agents who have the right to play wherever, whenever and for whomever they choose?

“As purported independent contractors, the suspended LIV Tour golfers could pursue antitrust litigation against the PGA Tour,” writes Joseph Hanna and Jason Kaner, of Goldberg Segalla, in Law360. “Antitrust law centers around protecting consumers; thus, the legal argument would be that the PGA Tour, in violation of antitrust law, is preventing the professional golfers of the world from competing in events, which is harmful to the game and those who watch.”

Hanna and Kaner observe that free agency has now come to professional golf and the looming legal showdown will likely shape the future of the industry.

Legal experts predict that the most likely next step would be an antitrust lawsuit brought against the PGA Tour by a player or a group of players — but LIV Golf could also file suit, as could a state or even the Federal Trade Commission. And while litigation that seeks financial damages could drag on for years, there are shorter term remedies that might be sought by plaintiffs instead, such as a court injunction that would prohibit the PGA Tour from enforcing its rules.

“Right now the PGA and the controversial new Saudi-backed LIV tour are battling it out on the course, competing for players with the new upstart offering previously unheard of purses,” according to Fortune. “But ultimately, the question of whether the PGA is in violation of antitrust laws is something that will be decided in court.”

Vaunted names such as Palmer, Nicklaus and Woods may have carried professional golf to becoming a billion-dollar global business, but the judges and professional litigators who argue this looming dispute will likely have a big say on where it goes from here.

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