LIV-PGA Tour Tumult Tees Up Staid Sport for Courthouse Clashes
The emerging rivalry between the PGA Tour and LIV Golf escalated on Tuesday when Dustin Johnson and several other golfers resigned from the tour in anticipation of playing LIV Golf events as well as major tournaments. The moves came a day after Phil Mickelson revealed he would play in LIV’s first event on Thursday at the Centurion Club outside London.
Although legal action from the sport’s shakeup has yet to surface, it may only be a matter of time before players, LIV, the PGA Tour and even the U.S. Golf Association and PGA could find themselves in court.
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Last month, the PGA Tour denied the requests of members who sought to play in the London event. As part of their membership, tour players contractually accept the player handbook—which explicitly authorizes the tour to fine, suspend or even permanently ban a member who violates regulations. According to the handbook, players are forbidden from engaging in conduct that inflicts financial or reputational harm to the tour. To that point, PGA Tour commissioner Jay Monahan has warned of suspensions or bans for anyone who plays for LIV.
One distinguishing sports law factor in this controversy is that PGA Tour golfers are independent contractors, unlike NFL and other major leagues’ athletes, who are both employees of their teams and union members. As union members, employment conditions are agreed on through collective bargaining and, of benefit to their leagues, exempt from antitrust scrutiny.
Tour golfers, in contrast, could pursue antitrust litigation against the tour, and its sponsors, partner courses and other affiliated businesses. They have actionable claims by virtue of the PGA Tour barring them from playing for LIV Golf. Any form of punishment could also trigger an antitrust lawsuit. Players could bring additional claims regarding contractual obligations. They could maintain the tour arbitrarily applied its own rules, particularly if exemptions have been generously granted in the past.
In a lawsuit, the golfers would argue that the PGA Tour is a monopsony in that it exercises too much control over the buying of services offered by the world’s elite golfers. They would further assert that both golfers and golf consumers are harmed, in that non-tour events would feature inferior competition if tour golfers can’t play in them. LIV would be able to bring analogous claims against the PGA Tour, alleging harm to golf consumers, a crucial point since antitrust law is most concerned with protecting consumer interests.
The PGA Tour would have several defenses, and could start by insisting that golfers contractually accepted tour rules and have benefited from the circuit’s promotion of their careers. In essence, these golfers choose to join the PGA Tour. Like membership in any organization, there are known advantages and disadvantages. The tour could also claim its organization of tournaments has excelled in terms of generating opportunities for golfers and attracting viewers and sponsors, and that its system promotes, not repels, economic competition.
Johnson and other resigning golfers, however, might take the antitrust bat (or club) out of their own hands by quitting the tour before it takes any adverse action against them. A stronger claim would come from a golfer who is formally punished by the tour for playing in LIV events.
A further complicating factor is how the U.S. Golf Association responds over time to these developments. The USGA, which oversees the 14 national championships including the U.S. Open and the U.S. Women’s Open, on Tuesday announced it would not bar golfers who play in the London event from next week’s U.S. Open at The Country Club in Brookline, Mass.
Whether the USGA continues to permit golfers who either play in LIV events or attempt to play in both LIV and PGA Tour events remains to be seen. If the USGA, a separate entity from the tour, elects to enforce PGA Tour policy, the USGA could be sued under antitrust law as a conspirator. The same would be true for the Professional Golfers’ Association of America, which, like the USGA, is separate from the tour and also hosts a major (the PGA Championship) as well as the Ryder Cup.
Meanwhile, the tour could consider a lawsuit against LIV for tortious interference with contractual relations and with its business relationships. The basic argument would be that LIV induced golfers to quit the tour and betray their contractual obligations, thereby causing economic harm. In response, LIV would contend it merely offered golfers another opportunity, and it was their decision to quit.
The real winners in this saga: Attorneys who will be adding up their billable hours.
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