As the PGA Tour’s season winds down and the LIV Golf Invitational Series prepares for its fourth event this week, golf’s dueling heavyweights are now positioned to battle head-to-head in the courtroom. The Saudi-funded LIV Golf start-up has joined the federal antitrust lawsuit launched by a handful of its players, claiming the PGA Tour has illegally tried to stifle competition.
LIV Golf joins its players in lawsuit, intensifying feud with PGA Tour
While the lawsuit could have huge implications for the future of professional golf, legal analysts say the case promises to be long and nuanced, and that LIV Golf and its players could face an uphill road to prove claims that the PGA Tour’s actions were intentionally harmful and not simply supporting the tour’s own interests.
An amended complaint was filed Friday in the U.S. District Court in Northern California by LIV Golf and seven golfers, including Phil Mickelson and Bryson DeChambeau. Four of the plaintiffs from the initial complaint have dropped out of the lawsuit: Abraham Ancer, Jason Kokrak, Pat Perez and Carlos Ortiz. LIV Golf officials had previously expressed support for the players’ case, though they were not a party in the original complaint filed on Aug. 3.
In the amended complaint, the LIV players say the PGA Tour is “an entrenched monopolist with a vice-grip on professional golf,” and that it violated federal antitrust laws in its efforts “to crush nascent competition before it threatens the Tour’s monopoly.” The LIV lawyers contend that the court must intervene and address the tour’s alleged actions and its regulations because “facing head winds of this nature is not sustainable.”
“I think any antitrust case today is a bit of an uphill challenge,” said Michael Carrier, a Rutgers law school professor who specializes in antitrust matters. “The courts over the past 50 years have made it difficult for antitrust plaintiffs with sports cases. Usually there is deference to the league because they need to have certain rules. I think this case might be a bit different, though, because the PGA is not the collection of teams that we might see with the NFL or NBA. And also it’s an interesting time because at the antitrust agencies, there is a focus on workers for the first time in a very long time.”
LIV Golf’s entry into the marketplace has already induced upheaval and uncertainty across the professional golf world, cleaving the game’s best players into two groups and potentially weakening the playing fields in tournaments big and small. The PGA Tour has watched some of its biggest stars abscond to the Saudi start-up and last week announced a series of new measures aimed at making the tour more lucrative for players. In that sense, LIV Golf has already forced sweeping changes across the sport, long before a federal judge rules on any legal claims.
“This is only one thing in LIV Golf’s toolbox,” said Jodi Balsam, a former NFL attorney who is now a professor at Brooklyn Law School. “And from LIV Golf’s perspective, if litigation succeeds only in distracting and imposing expense on the PGA Tour, they’ve won. All they need to do is put the PGA Tour on its back heels, force them to articulate their business reasons and the logic behind what they’re doing and to reevaluate their business model.”
In addition to the PGA Tour suspending the breakaway players — some of whom expressed an interest in competing in both circuits — the lawsuit alleges tour officials have “threatened sponsors, vendors, broadcasters, and agents to coerce players to abandon opportunities to play in LIV Golf events.” The LIV players also claim the tour “orchestrated a group boycott with the European Tour” and leaned on the sport’s major championships to “maximize the threats and harm” against the rebel group.
The court will have to decide whether the tour’s attempts to protect its own product crossed a line. The tour’s lawyers could argue that trying to maintain a dominant, unified tour is good for the game and consumers — “that there is a really good reason for all the best golfers in the world to be playing at the same tournament,” said Henry Hauser, a former attorney for the Federal Trade Commission who now specializes in antitrust matters for Perkins Coie, “and that makes a more appealing product.”
“But if they took actions that only seemed to harm a competitor, then that could be exclusionary,” Carrier noted. “And so that’s the lens through which the court will view the PGA’s conduct. A lot of times what is good for you is bad for a competitor.”
The PGA Tour scored an early legal victory in the case when U.S. District Judge Beth Labson Freeman denied a bid by three golfers seeking to compete in the FedEx Cup playoffs. Talor Gooch, Matt Jones and Hudson Swafford sought a temporary restraining order from the court, but the judge denied the request on Aug. 9, saying the golfers hadn’t suffered “irreparable harm” by joining LIV.
“She’s not in any way suggesting that the players are dead in the water, though,” Balsam said.
The case is not necessarily dependent on the success or failure of LIV Golf or whether the LIV players can still get rich golfing for their Saudi benefactors. The upstart tour could prove itself viable before the case reaches trial, but the PGA Tour could still be found to have illegally hampered LIV’s efforts to get off the ground.
There is little in the way of comparable precedent in the sports world. In the 1940s, Major League Baseball banned several players who’d left for higher contracts offered by an upstart, well-funded Mexican league. The ensuing lawsuit was settled before a judge could weigh in and MLB lifted the bans. More recently, in the 1980s, a group of sponsors sued the Men’s International Professional Tennis Council (MIPTC), the governing body of the men’s game at the time, alleging a series of antitrust violations. The case wound its way through the legal system as the MIPTC was losing its grip on the spot.
“It went away entirely and a brand new tool was formed — the ATP tour,” said Balsam, who worked on the case. “What is the takeaway from that? The PGA Tour doesn’t want to be this generation’s MIPTC.”
LIV Golf will stage its fourth event beginning Friday at the International in Boston. The Saudi-backed series had already lured away some of the PGA’s biggest names with seven- and eight-figure contracts and is expected to add a half-dozen more players as early as Monday. The latest wave is expected to include Cameron Smith, this year’s British Open champion.
In the lawsuit, LIV Golf said the PGA Tour’s regulations and “unilateral and conspiratorial threats of punishment have scared off the large majority of elite players as well as the pipeline of future elite players.” The tour’s tactics forced LIV Golf to “offer supracompetitive compensation well above the levels that would prevail in a market not polluted by the Tour’s anticompetitive conduct,” according to the complaint.
“This has forced LIV Golf into an unsustainable business model,” the LIV lawsuit states. “If the Tour’s anticompetitive conduct is not enjoined, LIV Golf will be unable to sustain a competitively viable tour.”
The complaint states that the PGA Tour has also applied pressure that made it impossible for LIV Golf to conduct business with several vendors, including a tent business, media companies, technology firms and sporting apparel businesses.
As with most antitrust cases, the LIV lawsuit won’t likely reach a quick resolution, but the judge has established an ambitious schedule. A summary judgment hearing is set for next July, and trial is scheduled to begin in January 2024.
Source: WP
