Joseph M. Hanna and Jason S. Kaner, partner and associate in Goldberg Segalla’s Sports and Entertainment group, explored the developing business and legal spheres in professional golf as LIV Golf Invitational Series and PGA Tour continue their tours in an article with Law360. The article analyzes the financial structure of the leagues, contract issues, and what action might be taken against the PGA if the suspended golfers wish to continue to compete in PGA events. The article also delves into the PGA potentially facing antitrust litigation and what could lead to golf creating its own “free agency”.
“LIV Golf provides an alternative with a completely different financial structure. Free agency has now come to professional golf, with the choice between guaranteed lucrative multiyear contracts with LIV Golf, or the classic meritocratic system employed by the PGA Tour,” they wrote when comparing the financial structures of the leagues. However, “… LIV Golf and the golfers who have jumped from the PGA Tour have faced criticism due to the Saudi government’s involvement in LIV and concerns over its human rights record,” they clarified, but also expressed that LIV Golf has maintained the ability to attract some star power.
Joe and Jason also discussed the contracts of PGA tour golfers, emphasizing that they are classified as independent contractors and that, per their handbook and code of ethics, they agree to participate exclusively in PGA tour events unless given permission. This has served as the structure for suspensions of LIV Golf participants, with them observing “If golfers are prevented from competing in the majors, it could halt the momentum LIV has started to build and prevent future PGA Tour golfers from jumping ship to LIV Golf. The most likely scenario, in the event that the major championships bar LIV Golf participants, would be for the aggrieved golfers to petition a court for injunctive relief, attempting to nullify the suspension.”
The article also brought forth the potential for antitrust litigation from both LIV Golf and impacted golfers, as the Sherman Act applies to the given situation and there is standing to bring an antitrust suit. “Antitrust law centers around protecting consumers; thus, the legal argument would be that the PGA Tour, in violation of antitrust law, is preventing the professional golfers of the world from competing in events which is harmful to the game and those who watch,” they noted.
Looking forward, Joe and Jason expressed “The most likely outcome is that the players who haven’t yet resigned their PGA Tour membership but continue to play in LIV Golf events will seek injunctive relief lifting the PGA Tour suspension.”
“The PGA Tour is teeing up against an entity with unlimited financial resources, and the looming legal showdown will shape the future of professional golf,” they concluded.
“The Looming Legal Showdown Set To Change Golf’s Course,” Law360, July 6, 2022
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