The budding rivalry between the PGA Tour and LIV Golf escalated 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 changes come a day after Phil Mickelson announced he would be playing LIV’s first event at the Centurion Club outside London on Thursday.
While legal action remains pending as a result of the sport’s restructuring, it may only be a matter of time before players, LIV, the PGA Tour and even the US Golf Association and PGA could find themselves in court.
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Last month, the PGA Tour turned down applications from members wanting to play at the London event. As part of their membership, Tour players contractually accept the Players Handbook – which expressly authorizes the Tour to fine, suspend or even permanently ban a member who violates regulations. According to the manual, players are prohibited from engaging in conduct that causes financial or reputational damage to the tour. Up to this point, PGA Tour commissioner Jay Monahan has warned of suspensions or bans for anyone playing for LIV.
A distinctive sports law factor in this controversy is that PGA Tour golfers are independent contractors, unlike NFL and other major league athletes, who are both employees of their teams and union members. As union members, terms of employment are agreed through collective bargaining and are exempt from antitrust scrutiny for the benefit of their leagues.
In contrast, Tour golfers could face antitrust litigation against the Tour and its sponsors, partner courses and other affiliates. They have enforceable claims based on the PGA Tour that prevent them from playing golf for LIV. Any kind of punishment could also trigger an antitrust lawsuit. Players could have additional claims related to contractual obligations. They could arbitrarily apply their own rules to the Tour, especially where liberal exemptions have been granted in the past.
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In a court case, the golfers would argue that the PGA Tour is a monopsony because it exercises too much control over purchasing services provided by the world’s top golfers. They would further claim that both golfers and golf consumers would be harmed since non-tour events would be less competitive if tour golfers could not attend them. LIV would be able to make analogous claims against the PGA Tour, alleging harm to golf customers, a crucial issue given that antitrust law is primarily concerned with protecting consumer interests.
The PGA Tour would have several defenses and could begin with golfers contractually accepting the Tour rules and benefiting from the circuit’s promotion of their careers. Essentially, these golfers are choosing to compete on the PGA Tour. Like membership in any organization, there are known pros and cons. The Tour was also able to claim that its organization of tournaments has created excellent opportunities for golfers, attracting spectators and sponsors, and that its system encourages, not repels, economic competition.
However, Johnson and other retiring golfers could take the antitrust bat (or bats) out of their hands by ending the tour before taking adverse action against them. A stronger claim would come from a golfer being formally penalized by the Tour for playing at LIV events.
Another complicating factor is how the US Golf Association responds to these developments over time. The USGA, which oversees the 14 national championships including the US Open and the US Women’s Open, announced Tuesday it would not allow golfers attending the London event from next week’s US Open at the Country Club in Brookline, Mass rule out.
Whether the USGA will continue to allow golfers who either compete in LIV events or attempt to compete in both LIV and PGA Tour events remains to be seen. If the USGA, a separate entity from the Tour, decides to enforce the policies of the PGA Tour, the USGA could be sued under antitrust law as a conspirator. The same applies to the Professional Golfers’ Association of America, which, like the USGA, is separate from the tour and hosts a major (the PGA Championship) alongside the Ryder Cup.
In the meantime, the tour may consider suing LIV for tortious interference with contractual relationships and their business dealings. The main argument would be that LIV tricked golfers into leaving the tour and breaching their contractual obligations, causing economic damage. In response, LIV claimed it was merely giving the golfers another opportunity and it was their decision to quit.
The real winners in this saga: lawyers adding up their billable hours.
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