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LIV Golf-PGA Tour Lawsuit Update

LIV Golf-PGA Tour Lawsuit Update

Last updated on: April 28, 2023 at 9:58 am by Kermit Zarley

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LIV Golf-PGA Tour Lawsuit Update 2023-04-28T09:58:33-07:00 Kermit Zarley

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A view of the 18th green at the Centurion Club, Hertfordshire ahead of the LIV Golf Invitational Series. Picture date: Tuesday June 7, 2022. (Photo by Steven Paston/PA Images via Getty Images)

Ever since the Saudi-backed LIV Golf launched last year to challenge the PGA Tour’s hegemony in professional golf the world over, which has resulted in lawsuits between them, I blogged often that it was all about whether the PGA Tour’s “conflicting events” clause would hold up in a court-of-law in the U.S. And I stated that I believed it would. Why? The PGA Tour is a voluntary trade organization that has a legal right to set its own rules for its members, which includes its conflicting events rule. So, what is that? To answer it, we need to have a little background history about the PGA Tour.

Ever since way back when I was in the early part of my PGA Tour career, the Tour has had its conflicting event rule that has been necessary for it to grow the pro game of golf here in the U.S. What is the rule? It requires that if any PGA Tour member desires to compete in a golf event which conflicts with a PGA Tour tournament–meaning both are held at the same time–that member must make an official request that the Tour allows that player to so compete in that conflicting event. If the Tour then approved this request, that player was then granted a “release” to compete in that conflicting event. Ever since the Tour has had this conflicting events rule, it has set a limit on how many such releases it would grant to any particular player during a fiscal year. I believe that limit has always been three.

This conflicting events rule has always been of most interest to foreign players, meaning members of the PGA Tour who were born in foreign countries. Two players who had complained the most about this restrictive rule were superstars Seve Ballesteros of Spain and Greg Norman of the Australia, even though Norman lived in the U.S. during his playing career. Norman now has been the director of LIV Golf.

It only became necessary for the business of the PGA Tour to craft this conflicting events rule when the Tour began to significantly grow, beginning in the 1960s when national television networks began to televise many, if not most, of the PGA Tour’s tournaments. The Tour and these networks then entered into business relationships in which the networks paid the PGA Tour for the right to televise PGA Tour events. The Tour’s proceeds from these financial arrangements then were added to all of the PGA Tour’s tournament purses that pay the players for competing in these tournaments. Nowadays, I think the TV package contributes 55-60% of the total tournament purses, which amounts to a very significant sum of money. Without it, the PGA Tour would not be nearly as successful as it is today.

Eventually, these television networks and the PGA Tour joined together in crafting a “TV package” that included all of the Tour’s nationally televised tournaments for a certain period of years. And, for these TV networks to enter into this arrangement, and thus televise PGA Tour tournaments, the networks needed some form of guarantee from the PGA Tour that each of the televised events would have what was generally called “representative fields” of the PGA Tour’s membership, meaning some portion of the best players on the PGA Tour, so that television audiences will want to watch those tournaments. But if some of the best PGA Tour players are skipping certain PGA Tour tournaments to play in conflicting events around the world, it becomes questionable if Tour tournaments are furnishing “representative fields” in its televised tournaments. Therefore, the PGA Tour’s conflicting events rule became a very important and integral element of negotiations that would result in the TV package.

One of the rules the PGA Tour has always had was that its tournament sponsors cannot offer extra money or similar benefits to any PGA Tour members to decide to compete in any certain PGA TOUR tournaments. But that is not the case with other pro golf tours around the world, in which their sponsors often pay huge sums of money to convince some of the best pro golfers in the world to compete in their events. That is the main reason some of the best PGA Tour players often desire to play in those events that conflict with PGA Tour tournaments.

But now, LIV Golf has come along with Saudi money and is paying pro golfers very huge sums of money to contract for years in the future, which money is separate from purse prize money, to compete in LIV Golf tournaments. The result has been that pro golfers who do so will make way more money than they can make from competing only in PGA Tour tournaments. And I think it is correct to say that Saudi Arabia’s Pension Investment Fund (PIF), controlled by Saudi royalty, is making this investment mostly to try to improve the world view of Saudi Arabia, which has declined in recent years. Such an effort is now called “sportswashing.”

So, without the PGA Tour’s conflicting events clause, the PGA Tour would not be at all what it is today. When LIV Golf launched last year, the PGA Tour added to its conflicting events rule the following clause for those members who transgress the rule: “Any player who has participated in an unauthorized tournament is ineligible to compete in any event sanctioned by the PGA Tour for a period of one year.”

So, last August ten PGA Tour members who are also contracted with LIV Golf sued the PGA Tour in Northern California by claiming the PGA Tour’s conflicting events rule breaks U.S. anti-trust laws. The Saudi PIF joined in the lawsuit. The issue therefore hinges on whether a U.S. trade organization, such as the PGA Tour, has a legitimate right to require its members to abide by its rules that include its conflicting events rule.

In February this year, the federal judge in this lawsuit ruled that PIF’s governor, Saudi Arabian Yasir Al-Rumayyan, must submit for deposition in the case. Since then, it has been speculated that he will not agree to do so. If this happens, the lawsuit will have to be withdrawn, which would be a big win for the PGA Tour and a loss for LIV Golf.

But it’s not only the PGA Tour that is objecting to the challenge that LIV Golf presents to professional golf. DP World Tour, which was formerly the European Tour, has had its own lawsuit against LIV Golf in the UK which involves its own conflicting events rule similar to that of the PGA Tour. And Reuters reported three weeks ago, “The DP World Tour has won its legal battle to be able to suspend and fine LIV Golf players who featured in conflicting events without permission after the independent UK-based panel of Sports Resolutions found in its favour on Thursday,” which was April 6.

With these two legal rulings against LIV Golf, it appears that the PGA Tour is in an strong position in its legal defense to continue operating its business as it has in the past, which through the years has gained such solid success that other major pro sports organizations in the U.S. covet.

I wonder if the members of the PGA Tour Bible Study have been praying about this and, if so, what they have been praying. This group was divided about its prayers when the PGA Tour broke away from its parent organization, the PGA of America, in 1969, in which Yours Truly was involved in that split. See my post about it, entitled “The Short-Lived Association of Professional Golfers.”

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