In law, a court will usually not hear a legal question until there is an actual dispute. Assumptions and Maybes don’t cut it.
For golf enthusiasts wondering if the PGA Tour could legally penalize its members for playing in the first LIV Golf event at the Centurion Club outside London, that question now has an actual dispute and can be raised.
On Thursday, PGA Tour Commissioner Jay Monahan announced in a letter to members that golfers who compete without release, have been “suspended or no longer eligible” to play on the tour, including the Presidents Cup.
Monahan’s reasoning is straightforward. As a contractual condition of tour membership, golfers agree to play the tour’s events and agree not to play in other events without the tour’s permission. Along these lines, players contractually agree to the Player’s Guide, which explicitly allows the tour to fine, suspend, or ban members for violating the regulations.
Manahan’s letter acknowledged that members make rational decisions for “their own financial reasons”. But he also indicated that when a person joins a member organization, there are duties and responsibilities to be followed.
Monahan confirmed that players who join LIV do so without the Tour’s permission. As Monahan sees it, these players “cannot claim the same PGA Tour membership benefits, considerations, opportunities, and platform” as Tour members who follow the rules.
“This expectation,” Monahan said in context to tour members, “disrespects you, our fans and our partners.”
LIV Golf sees the situation completely differently. In a statement, the New League criticized Monahan’s statement as “revengeful” and “deepening the division between the Tour and its members.” LIV also finds it hypocritical for the Tour, “an organization dedicated to creating opportunities for golfers to play the game,” to “prevent golfers from playing.” LIV concluded its statement with a warning, saying that the tour would not have “the last word on this matter” and stressed that “the era of free agency has begun.”
There is a good chance the court will have the last word. As detailed more fully in the other Sportico Legal Stories There are at least four types of lawsuits that can follow.
- Suspended golfers can sue the round over antitrust claims and contracts.
A golfer who has lost his tour membership by playing at LIV events without permission can petition a court for a restraining order. If granted, the command will prevent the round from executing the hold. The Tour can appeal such an order to the applicable US Court of Appeals. In turn, the refusal of the injunction can be appealed by the player.
In this type of litigation, the golfer will maintain that the round is operating as a monopoly in violation of federal antitrust law. The tour, under this theory, precludes other purchasers (ie LIV) of services offered by elite golfers. Realizing that antitrust law is most concerned with protecting consumers, the golfer will insist that the exclusion of competing organizations is detrimental to golf fans. These fans are arguably better off if they can watch their favorite players compete in as many tournaments as possible. In statements to the media, LIV also confirmed that fans will enjoy her format as a differentiator from the tour format. Thus the golfer could argue that the round deprives consumers of golf the opportunity to see an exciting new format.
In addition to the antitrust claim, the golfer will maintain that the tour has acted arbitrarily and volatile — the legal standard in place for judging how a member organization applies its own rules — in refusing issues to play for the LIV team. If the tour has a history of easily awarding releases, the player can say that the decision to reject the LIV is designed as a punitive measure that betrays past practices.
The round will be armed with several defenses.
First, the tour will confirm that members contractually agree to follow the rules of the tour. These rules are in writing and, as a condition of membership, are accepted by golfers. If members don’t want to follow these rules, they can – as Dustin Johnson and many other golfers have done – finish the tour. In other words, golfers can’t have their cake and eat it either.
Second, the tour will deny the idea that its rules are detrimental to golf fans and consumers. The Tour will confirm that it has built a model for a well-organized competition system that has made the sport extremely popular and profitable, including for its member players. To prevent the Tour from enforcing its rules, the Tour would argue, would harm, and not benefit, golf enthusiasts. There will be chaos in the industry and the tour will suffer from diminished ability to negotiate valuable sponsorships and other contracts popular with fans. This defense will also build on precedent. For nearly 50 years, the US Tennis Association has relied on it to defeat an antitrust lawsuit brought by member players who refused the opportunity to play in a rival league. Additionally, the tour could point to statements from several players who signed up with LIV that part of the appeal was that they would have to play fewer events, undermining the argument that consumers benefit from the new outfit.
Third, the Tour will confirm that, like other sports leagues, it has ample leeway in applying its rules. Courts were constantly referred to decision making by SOMOs as long as they followed their own rules. Here, the round will maintain, it has given golfers advance notice of what might happen and now it has.
- LIV Golf can sue the Tour under antitrust and malicious interference claims.
LIV Golf is also a potential plaintiff. The association could make similar antitrust arguments as those discussed above and these allegations would focus on (alleged) consumer harm. Separately, LIV can confirm that by penalizing member golfers for doing business with LIV, the Tour has significantly interfered with LIV’s potential business relationships.
In the meantime, the Tour will confirm that its members have agreed to follow the rules, and that the sport has become very popular with fans (consumers) through its system and as a member organization, it has every right to enforce its own rules.
- Golfers on the Hold and LIV Tours can file a lawsuit against Tour business partners as co-defendants.
Antitrust lawsuits are among the most feared by the law. Successful damages can result in three times the damages, which means that if a jury finds that the defendant caused $10 million in damages to economic competition, those damages automatically multiply by three. Plaintiff’s attorney can make fortunes with quite a few antitrust cases. Antitrust lawsuits also tend to be expensive, require expert witnesses and third parties, and often last several years (quick clarification: NCAA vs Alston He was in court for eight years).
Any entity, including the sponsors, training courses and media companies that handle the tour, can be joined in an antitrust lawsuit on the theory that it is part of an illegal conspiracy to interfere with economic competition and harm consumers.
This may be one reason, for example, that the American Golf Association announced that it will allow golfers who play at the LIV event in London to also play in next week’s US Open at The Country Club in Brooklyn, Massachusetts. Tournaments, including the US Open and the US Women’s Open, are not obligated to follow the rules of the round and, for defensive antitrust reasons, do not enforce round bans. On the other hand, the USGA has consistently maintained that it can refuse entry to anyone at any time and for any reason. She also stressed that her decision was only for this year’s event, suggesting that the USGA’s move may be buying time to let things go. In the meantime, the PGA will be exposed to similar legal risks by imposing a ban on rounds.
- The Tour could sue LIV for malicious interference.
Tourist golfers are independent contractors, not employees. This distinction is of important importance in antitrust. If golfers were employees and affiliated with unions, they would enter into a collective bargaining agreement that would void their right to sue the round under antitrust law. But even as independent contractors, they are members who contractually owe duties to the tour.
The Tour could argue that LIV improperly interfered with its membership contracts by urging golfers to terminate the Tour (such as Johnson) or attempt to play in violation of Tour membership (such as Mickelson). In response, LIV asserts that golfers are adults who can make their own decisions about their career, and that giving them a chance to play at other events is not illegal.