FORE! LIV Golfers hit back at the PGA Tour

Published On 11/08/2022 | By Sam Orchard | Litigation

In a new development to the breakaway LIV Golf versus PGA Tour saga, several LIV golfers have filed a federal antitrust lawsuit against the PGA tour in the U.S. District Court for the Northern District of California, which could have widespread implications as to the degree of control a sports league is able to exercise over its players in the US.

The players, including six-time major champion Phil Mickelson and Australian Matt Jones, are seeking to set aside their suspensions from the PGA Tour and to be permitted to play in PGA Tour events, including the upcoming and highly lucrative FedEx Cup Playoffs.

This follows news of the ongoing United States Department of Justice investigation into the PGA Tour for potentially breaching US antitrust laws. Please see our previous post on this here.

Refresher: who are these organisations?

The PGA Tour is a not-for-profit organisation that organises the main professional golf tours in North America. For many years, the PGA Tour has been the sole elite golf tour in the United States, featuring some of the best golfers in the world and offering its participants the greatest potential prize money, advertising and sponsorship exposure, quality of competition, and opportunities to qualify for the four Major tournaments (the PGA Championship, the Masters, the Open, and the U.S Open), Ryder and Presidents Cups, and the Olympics.

LIV Golf is a new professional golf tour founded in 2021. It was formed by a number of former executives who split from the PGA Tour and other professional organisations, and its current CEO is Australia’s Greg Norman.

As explained in our previous post here, the deep pockets of this rival tour, funded by the Saudi Arabian sovereign wealth fund, has presented a threat to established leagues like the PGA Tour (both in terms of the prize money on offer and the lucrative signing bonus and appearance fees for LIV Golf professionals).

Alleged anti-competitive practices

The lawsuit (which can be found here) alleges that the PGA Tour has exercised its monopoly over professional golf to crush overseas competition and penalise the professional players who joined LIV Golf, claiming that “the [PGA] Tour has evolved into an entrenched monopolist with a vice-grip on professional golf” and “has employed its dominance to craft an arsenal of anticompetitive restraints to protect its long-standing monopoly”.

The lawsuit states, “as part of its carefully orchestrated plan to beat the competition, the tour has threatened lifetime bans against players who play in even one LIV Golf event” and accuses the PGA Tour of using the golf Majors to “do its bidding” in order to maximise the threats and harm against the departed players.

Such restraints have, according to the filing, threatened the competitive viability of LIV Golf and any other potential competitor to the PGA Tour.

Specifically, the lawsuit alleges that the PGA Tour’s conduct has included at least six practices in contravention of the Sherman Antitrust Act of 1890, each of which, the plaintiffs allege is “patently exclusionary, anti-competitive and unlawful”, as follows:

  1. Repeatedly threatening PGA Tour members with serious consequences if they join LIV Golf, including a lifetime ban from the PGA Tour;
  2. Amending, expanding and enforcing the PGA Tour’s internal regulations in response to the threat of competitive entry, in order to prevent members from participating in LIV Golf events;
  3. Orchestrating a group boycott with the European Tour (currently known as the DP World Tour) to ensure any departing player cannot pursue his career and livelihood anywhere in the global golf ecosystem;
  4. Encouraging the Professional Golfers’ Association of America to threaten and disallow LIV Golf players from playing in the PGA Championship and the Ryder Cup (both being marquee events on the professional golf calendar);
  5. Threatening PGA Tour members’ agents and business partners with punishment if the players joined LIV Golf; and
  6. Threatening sponsors to sever their professional relationships with departing players, or risk being cut off from having any sponsorship opportunities with the PGA Tour.

The eleven plaintiffs have claimed that the PGA Tours actions have caused them harm by:

  1. Diminishing competition for their services and reinforcing the PGA Tour’s monopoly power in which the professional touring golf players sell their services;
  2. Denying them income-earning opportunities, tournament performance opportunities (including denying them opportunities to participate in tournaments in which they have qualified), sponsorship revenue, and independent contractor rights; and
  3. Harming the reputations, goodwill, and brands of each of the plaintiffs.

Relief requested

Accordingly, the plaintiffs are seeking injunctive relief against the PGA Tour, including:

  • A stay of the PGA Tour’s suspensions imposed against LIV Golf players;
  • A temporary restraining order allowing certain LIV Golf players to participate in the FedEx Cup playoffs;
  • An order preventing the PGA tour from banning, threatening to ban, or punishing players associated in any way with LIV Golf; and
  • An order restraining the PGA Tour from conspiring with the European Tour to ban LIV Golfers from participating in European Tour events.

European Tour

The filing follows the success of LIV Golf players Ian Poulter, Adrian Otaegui and Justin Harding in securing a temporary stay from a British court allowing them to participate in the Scottish Open in July 2022. The three professional golfers had received a three-event suspension and fines of £100,000 each from the European Tour as punishment for competing in a LIV Golf event in June without a release.

Hitting Back

Moments after the lawsuit was made public, the PGA Tour published a memo, sent from Tour Commissioner Jay Monahan to all current Tour members, confirming that the PGA Tour professionals “should be confident in the legal merits of our position” and “intent to make our case clearly and vigorously… we will continue to defend the members who abide by the regulations written by and for the players”.

The lawsuit has not yet received a date for hearing and it remains to be seen what the PGA Tour’s defence to each claim in the lawsuit will be.

By Sam Orchard and Wilson Huang

Image credit: Golf Ball and Tees on White Background by Trostle / WordPress / CC BY 2.0 / Remixed to B&W and resized

About The Author

is a Law Clerk in the Competition Dispute Resolution team of King & Wood Mallesons.

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