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Golf’s New World Order Takes Shape Under PGA Tour-LIV Accord

michael mccann
·4 min read
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In a stunning development, the PGA Tour, DP World Tour (the European Tour) and LIV Golf announced on Tuesday they are joining forces in a new, collectively owned, for-profit entity and ending their litigation.

The companies in a press release said they are going to “unify the game of golf, on a global basis” to provide a model “that delivers maximum excitement and competition among the game’s best players.”

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Although described as a merger, it appears the PGA Tour will be the controlling party. According to the statement, the PGA Tour will appoint a majority of a board of directors to oversee operations, businesses and investments. Meanwhile, Saudi Arabia’s Public Investment Fund (PIF), which backs LIV Golf, will have the “exclusive right to further invest in the new entity.”

The announcement comes as PIF, through LIV Golf, has been battling the PGA Tour in a far-reaching antitrust litigation in a California federal court, and a couple of months after a U.K. arbitration service sided with the European Tour’s right to fine and suspend golfers for joining LIV.

Although the merger will end the antitrust litigation, it could potentially spawn new antitrust problems.

U.S. golfers are arguably “worse off,” in that, instead of two well-funded leagues bidding against one another to sign them, there is one. This same type of problem led to Oscar Robertson and other pro basketball players filing an antitrust case after the NBA and ABA merged in the 1970s.

As explained on Sportico in March:

If instead LIV Golf and the PGA Tour negotiate a settlement that sets parameters on how they compete, the two leagues might unwittingly spawn a new antitrust problem. When competing businesses conspire to restrict competition in a market (even the market for the world’s best golfers), they can run afoul of antitrust law and face lawsuits. Carving up global competition for golf might address LIV and PGA Tour business needs, but it might also postpone a court battle for another day.

The merger also arrives as the Department of Justice’s antitrust division is probing the legal ramifications of competition for pro golfers. The competing leagues joining forces will no doubt attract the attention of antitrust experts at the DOJ.

Although early in the litigation, the PGA Tour has succeeded in the California case, which began with 11 golfers but now only features LIV, after golfers faced the realities of pretrial discovery. In it, LIV accuses the PGA Tour of having monopolistic control over the market for elite golfers while the PGA Tour accuses LIV and PIF and its governor, Yasir Othman Al-Rumayyan, of illegally interfering with its golfers’ contracts by inducing them to breach.

Last August, U.S. District Judge Beth Labson Freeman denied three LIV golfers a temporary restraining order, reasoning they weren’t damaged in a legal sense since they were being paid more by LIV, and the golfers’ own expert witnesses testified that LIV could calculate how much it more it had to pay golfers to convince them to join.

Freeman also ruled that Al-Rumayyan had to comply with subpoenas in New York City. PIF and Al-Rumayyan are appealing that ruling to the U.S. Court of Appeals for the Ninth Circuit, arguing they are exempt as officials of a foreign government.

If Rumayyan had to testify, it would have set a problematic precedent for PIF—which has about $676 billion in assets and invests in numerous businesses. The fund’s officials could have to testify in other cases and face sensitive questions under oath about whether PIF has lost business because of criticisms about Crown Prince and Prime Minister Mohammed bin Salman.

The end of the litigation will mean the end of pretrial discovery. Both LIV and PGA Tour officials—as well as their business partners, such as golfers, agents and network executives—won’t have to testify under oath or share sensitive emails and other documents.

After 10 months in court where attorneys for LIV and PGA Tour sharply criticized one another’s clients, the leagues’ leaders struck a different tone on Tuesday.

“We are pleased to move forward, in step with LIV and PIF’s world-class investing experience,” PGA Tour Commissioner Jay Monahan said in a statement. “I applaud PIF governor Yasir Al-Rumayyan for his vision and collaborative and forward-thinking approach that is not just a solution to the rift in our game, but also a commitment to taking it to new heights. This will engender a new era in global golf, for the better.”

For his part, Al-Rumayyan added, “We are proud to partner with the PGA Tour to leverage PIF’s unparalleled success and track record of unlocking value and bringing innovation and global best practices to business and sectors worldwide.”

Scott Soshnick contributed to this report.

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