Spencer Becerra
In the United States, most sports fans are accustomed to having one league corresponding to each professional sport. Sometimes an upstart will try to disrupt the marketplace, but most lose steam because of insufficient capital and market interest. In the world of professional golf, the PGA Tour and DP World Tour (or European Tour), along with four affiliated major tournaments (i.e., The Masters) have dominated for close to a century.[1] Enter LIV Golf, a professional tour which, thanks to the Saudi Arabia Public Investment Fund’s backing, can do what no upstart league has before: offer elite players exorbitant contracts and purses that dwarf those offered by the PGA.[2] As a result, several high-profile PGA golfers have signed with LIV, triggering their immediate ban from PGA-affiliated events.[3] LIV responded with an antitrust lawsuit, claiming violations of the Sherman Act, State antitrust law, and contract violations.[4] But the bulk of the controversy has occurred out of court, with groups ranging from the PGA to 9/11 victims’ family advocacy groups accusing LIV of being a “sports washing” vehicle for Saudi Crown Prince Mohammed bin Salman.[5] The dispute has opened a rift between the those who support the staid traditions of the PGA Tour and the self-proclaimed free market stalwarts who insist the PGA’s rusty mechanisms need updating through fair competition. But perhaps more visibly, it has manifested American anxiety about our ongoing political and economic partnership with Saudi Arabia.
Beginning with the legal and business issues, LIV has asserted bread and butter claims under the Sherman Act, which primarily acts as a check on monopolistic restraints on trade and competition.[6] The complaint rests on allegations that, inter alia, the PGA tour colluded with the European Tour to: boycott LIV golfers and entities partnering with LIV, prevent pro golfers from entering into contracts with other tours, and threaten lifetime bans on players who sought other potential purchasers for their services, all of which amounts to group boycott and a monopolistic restraint on the market for pro golf services and promotion.[7] Meanwhile, LIV and its advocates have insisted to the press that their main goal is player protection.[8] Full discovery has not yet commenced, but the suit and LIV’s increasing draw have led the PGA to increase purse size and recruit Tiger Woods for a new “Monday Night Golf” weekly program. Some commentators point out that these changes are overdue.[9] Whether the PGA is violating antitrust law is a question beyond the scope of this post; however, it is hard to deny that LIV’s freewheeling style and near-bottomless supply of cash is forcing the PGA to think outside the box to better serve and attract audiences. In that sense, the mere threat of antitrust action seems to be accomplishing the spirit of the Sherman Act by encouraging dynamism in the market.
The ethics of LIV golf open a host of thornier questions. Implied in most critiques of players who have joined LIV is that the very existence of the upstart LIV Tour is morally wrong due to its Saudi sovereign wealth backing. Players themselves have given glimpses of their discomfort with the arrangement. For instance, Mickelson stated that he found the Saudis “scary” but could not refuse the payday.[10] Many LIV players probably share his sentiment. Meanwhile, lawmakers have already grilled LIV CEO Greg Norman for his attempts to garner support in Washington, accusing him of being a PR agent for the Saudis.[11] The PGA has seized on sports washing, perhaps cynically, in its counterclaims asserting that LIV does not serve any procompetitive purpose at all.[12] For constituents like the families of 9/11 victims, of course, the quandary is nonexistent; no appeal to the spirit of free enterprise can compete with the rawness of loss.
If LIV continues to operate in the US, it will produce economic and ethical tension. America’s tortured relationship with Saudi Arabia will play out in headlines for as long as that country wields the levers of global energy power, with LIV being but a microcosm of those broader controversies. One commentator has suggested that LIV will go away because as with past competitor sports leagues, “no one cared who won.”[13] But if top golf talent is drawn to LIV for unmatchable paydays, interest will increase. LIV, and its discomforts, may be here to stay.
[1] Update on Mickelson v. PGA Tour, Nat’l L. Rev. (Sept. 9, 2022), https://f.datasrvr.com/fr1/622/98619/Amended_Complaint.PDF [https://perma.cc/BL2T-BMAJ] [https://web.archive.org/web/20221110192750/https://f.datasrvr.com/fr1/622/98619/Amended_Complaint.PDF].
[2] For example, Phil Mickelson, a former PGA star, accepted a $200m signing bonus for joining, while Tiger Woods was offered nearly $1bn as a signing bonus, an offer he declined. Tariq Panja & Andrew Das, What Is LIV Golf? It Depends Whom You Ask, N.Y. Times (July 28, 2022), https://www.nytimes.com/article/liv-golf-saudi-arabia-pga.html [https://perma.cc/UVC4-XDY2] [https://web.archive.org/web/20221110193354/https://www.nytimes.com/article/liv-golf-saudi-arabia-pga.html].
[3] Id.
[4] Update on Mickelson v. PGA Tour, Nat’l L. Rev. (Sept. 9, 2022), https://f.datasrvr.com/fr1/122/20730/Original_Complaint.PDF [https://perma.cc/YC8V-JYTS] [https://web.archive.org/web/20221110193805/https://f.datasrvr.com/fr1/122/20730/Original_Complaint.PDF].
[5] Steven Keating, For 9/11 Families LIV Golf is ‘Death Golf,’ Says Advocacy Group, Reuters (Oct. 27, 2022), https://www.reuters.com/world/911-families-liv-golf-is-death-golf-says-advocacy-group-2022-10-28/ [https://perma.cc/V9X5-QJWQ] [https://web.archive.org/web/20221112191508/https://www.reuters.com/world/911-families-liv-golf-is-death-golf-says-advocacy-group-2022-10-28/].
[6] See 15 U.S.C. § 1; 15 U.S.C § 2.
[7] Nat’l L. Rev., supra note 1.
[8] Diane Bartz & Frank Pingue, Mickelson and Three Others Drop Out of LIV Golf Lawsuit Against PGA Tour, Reuters (Sept. 27, 2022), https://www.reuters.com/legal/litigation/golfer-phil-mickelson-others-drops-out-lawsuit-against-pga-tour-liv-fight-2022-09-27/ [https://perma.cc/U9FC-39HN] [https://web.archive.org/web/20221110194823/https://www.reuters.com/legal/litigation/golfer-phil-mickelson-others-drops-out-lawsuit-against-pga-tour-liv-fight-2022-09-27/].
[9] Kevin Cook, LIV Long and Prosper? Probably Not., Wall St. J. (Sept. 20, 2022), https://www.wsj.com/articles/liv-long-and-prosper-probably-not-greg-norman-pga-tour-golf-saudi-public-investment-fund-dustin-johnson-tiger-woods-xfl-11663699028 [https://perma.cc/VHR5-EANF] [https://web.archive.org/web/20221110195142/https://www.wsj.com/articles/liv-long-and-prosper-probably-not-greg-norman-pga-tour-golf-saudi-public-investment-fund-dustin-johnson-tiger-woods-xfl-11663699028].
[10] Bartz & Pingue, supra note 8.
[11] Emily Brooks, LIV Golf’s Greg Norman Gets GOP Pushback Over Saudi Ties, Hill (Sept. 21, 2022), https://thehill.com/homenews/house/3654662-liv-golfs-greg-norman-gets-gop-pushback-over-saudi-ties/ [https://perma.cc/J3F5-7VPR] [https://web.archive.org/web/20221110195751/https://thehill.com/homenews/house/3654662-liv-golfs-greg-norman-gets-gop-pushback-over-saudi-ties/].
[12] Sean Zak, PGA Tour Countersues LIV Golf: Here’s Where the Lawsuit Stands, Golf (Sept. 29, 2022), https://golf.com/news/pga-tour-countersues-liv-golf-where-lawsuit-stands/ [https://perma.cc/89MH-QYMJ] [https://web.archive.org/web/20221110200017/https://golf.com/news/pga-tour-countersues-liv-golf-where-lawsuit-stands/].
[13] Cook, supra note 9.