Now that golf’s two major men’s tours have prohibited their members from competing on an upstart rival tour, the question becomes: What’s next?
From a legal standpoint, perhaps a lot.
The PGA Tour denied requests last week from Sergio García, Phil Mickelson, Lee Westwood and an unknown number of other members to compete in the inaugural LIV Golf Invitational Series tournament next month near London. The DP World Tour immediately issued its own denial to members seeking waivers to play in the June 9-11 event at Centurion Golf Club. The 48-man field will play for $25 million, with $4 million to the winner, more than double what a typical PGA Tour event pays. Essentially, both tours drew lines in the sand, daring LIV Golf’s Saudi backers and frontman Greg Norman to cross it.
Golf fans might not have to wait long for the next volley.
One legal expert who specializes in antitrust disputes told Global Golf Post that should the fight end up in court, as expected, it likely would be decided based on antitrust law rather than labor law, and he says the PGA Tour appears to be on solid legal ground.
“Antitrust liability and injuries are hard to prove, and the litigants will have to show that the PGA Tour has been operating illegally,” said Gerald L. Maatman Jr., a law-school professor at Northwestern University and a senior partner in the Seyfarth Shaw law firm of Chicago and New York. Maatman specializes in class actions involving employment and antitrust law.
“The focus of the legal issues is whether the tour has monopoly power over professional golf tournaments, and is it attempting to enforce that monopoly by illegitimate means that violate antitrust laws?”
ATTORNEY Gerald L. Maatman Jr.
Members of the PGA and DP World tours, like other touring professionals, are considered independent contractors who play for themselves, pay their own expenses and set their own competition schedules, within tour parameters. Many players are members of both tours and compete regularly on both sides of the Atlantic. Though members are not employed by either tour, they do sign agreements to adhere to numerous standards regarding their conduct and tournament regulations.
One of those tenets from the “PGA Tour Player Handbook and Tournament Regulations,” as tour officials noted in denying the players’ requests, is that the tour must approve a release for a member to compete in a rival event. That’s legal on its face, Maatman said.
“The tour is a private organization, and it can enact rules and regulations as it has done,” Maatman said. “And one of the rules is that it has the right to determine a competitive discipline.”
Maatman, 66, has followed this issue with interest. He is a scratch player and member of Chicago Golf Club who has competed in the U.S. and British Amateurs and is the former president and general counsel of the Chicago District Golf Association. As head of the class-action practice at Seyfarth Shaw, he specializes in defending employment and antitrust class-action claims. From that perspective, he cites legal precedent in noting that the PGA Tour appears to be in a favorable legal position, should this dispute end up in front of a federal judge.
“By and large, what the laws that apply in the United States say is that an organization can have rules,” he said, adding that as long as those regulations are not discriminatory, then they can be enforced, even to independent contractors such as tour players. The rub of the legal issue is how the rules are applied.
“The focus of the legal issues is whether the tour has monopoly power over professional golf tournaments, and is it attempting to enforce that monopoly by illegitimate means that violate antitrust laws?” he asked rhetorically in citing the legal standard.
LIV Golf doesn’t see it that way, believing that the PGA Tour is in violation of antitrust law, plain and simple. According to a LIV Golf source who provided background information to Global Golf Post, the upstart tour intends to pursue an antitrust claim against the PGA Tour. LIV Golf’s position, in part, cites the fact that the top 50 golfers in the world play on the PGA Tour and that fans, sponsors, advertisers and broadcasters have no reasonable substitute at the top level of professional golf.
Speaking Wednesday at Centurion Club, Norman told Global Golf Post’s Matt Cooper and John Hopkins and other assembled media: “We've got an incredible legal team, and we’re going to defend the rights of the players going forward,” he said, before insisting: “We don’t want it to end in a court battle. We’re not looking for a fight. We never have.”
The Sherman Anti-Trust Act, an 1890 federal law that requires free and robust competition, applies to sports organizations, though Major League Baseball has held a 100-year-old exemption that has withstood a barrage of legal challenges. This legal risk is far from academic. In the past 24 months, organizations such as the NCAA have been found guilty of antitrust violations and required to pay multimillion-dollar class-action verdicts and settlements.
The PGA Tour, a tax-exempt organization under IRS code 501(c)(6), generated more than $1.5 billion in revenue in the 2019 tax year, the most recent filing before the pandemic curtailed the worldwide economy, according to public records. It has a history of not shying away from a legal fight – see Casey Martin, Vijay Singh, Doug Barron, tour caddies and Hank Haney – with mixed results. However, a legal showdown against LIV Golf could be different. The Saudi Public Investment Fund, which manages more than $400 billion in assets, has the deep pockets to go toe-to-toe with Camp Ponte Vedra Beach.
The venue of a future lawsuit could prove to be pivotal, Maatman said. Of the 12 U.S. circuits, the ones in California and New York might prove to be better for LIV Golf, as those venues are known to be plaintiff-friendly on antitrust and class-certification issues. The tour likely would argue that any lawsuit ought to be decided closer to its headquarters – and a more business-friendly bench – in Florida, and ask for a transfer of the case there.
“Litigation is like real estate or playing a golf course,” Maatman said. “Location is everything.”The court of public opinion could be just as important, too.
“Metrics and noise matters in lawsuits, and there is a lot of noise in these issues separate from the antitrust issues,” Maatman said. “What’s good for the game of golf? In the court of public opinion, is it (the PGA Tour) acting in the best interests of the game? The court of public opinion often matters in legal courts and can impact the bottom-line result.”
The next move would appear to be LIV Golf’s to make, though there could be only one option, according to Maatman.
“It looks like they’re on a collision course for litigation.”