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Duplicitous Statements, Lawsuits, and Antitrust Investigation: The PGA and LIV Conflict Continues

Earlier this year and in one of my first articles for conduct detrimental, I covered the suspensions and defections of current PGA Tour players to the new, “upstart” LIV tour. since then, much has occurred that warrants revisiting the issues, and evaluating the veracity of my predictions.

One of the predictions I made in that article was the possibility of antitrust action being taken against the PGA for the way that they were approaching this newfound competition. Well, it seems that that prediction was spot on. As reported by ESPN, the Wall Street Journal, and others, The US Department of Justice has opened an investigation into potential antitrust violations by the PGA. Additionally, Mickelson, DeChambeau, and nine other “ex” PGA members filed a lawsuit in federal district court in northern California—also alleging antitrust violations—and seeking a temporary restraining order to allow them to compete in the upcoming rounds of the PGA tour.

Since news of that lawsuit first broke, several of the golfers have dropped out of the suit (bringing the total number down to 7), but, interestingly, LIV Golf Inc itself joined the suit. (see article detailing this here). LIV joining the suit makes sense from the perspective that they purport to stand for golfers who want more freedom as to where and how they play golf, and joining the lawsuit is a great way to bolster this “value” in the eyes of the public.

The PGA: Unchanged Rhetoric and Attitudes

Despite these lawsuits, the PGA has not softened its position regarding players who leave to play in the LIV tournaments. In a memo from PGA Commissioner Jay Monahan (as reported by ESPN), Monahan states:

“Fundamentally, these suspended players—who are now Saudi Golf League employees—have walked away from the Tour and now want back in. With the Saudi Golf League on hiatus, they're trying to use lawyers to force their way into competition alongside our members in good standing.”

I have a number of issues with this statement. First, I don’t fall for the rhetoric that suggests that the golfers who left for LIV are trying to “force their way back” into the PGA. Yes, they are trying to re-enter, but they shouldn’t have been expelled in the first place—because 1) PGA members are independent contractors, which gives them the freedom to “work” elsewhere, and 2) the PGA has the discretion to grant up to three releases per year (per golfer) to compete in events other than PGA tour events if there are conflicts—yet no releases of any kind were offered to golfers who “defected” to LIV. They were suspended immediately and for no other good reason other than “we don’t like the tour you’re playing for” (you could argue that not all the suspended players attempted to get a release, but I think it is pretty clear the PGA wouldn’t have granted it).

Second, it calls attention to the fact that the players who have signed contracts with LIV are considered “employees”—an ironic and duplicitous statement coming from the PGA. As mentioned in my first article on the subject, the PGA consciously CHOOSES to have golfers not be recognized as employees but instead views them as independent contractors—meaning they legally can't prevent or bar members from competing in other tours, and ESPECIALLY can't penalize them for doing so (both of which the PGA has attempted to do). While it does appear that LIV has something more analogous to an “employment” contract with its golfers—contracted players are obligated to play in all events on the tour, including if the tour expands the number of events—there is no evidence that these contracts would preclude LIV contracted golfers from playing in PGA events. While obvious to me, the PGA seems to forget that it could have avoided this entire issue, including the antitrust (and likely federal labor law) suits if it had chosen to recognize members as employees—but it was more interested in saving itself money.

While the PGA may be “confident” that it will prevail in these lawsuits, I think there is a high probability their past and continued hostile attitude and “punishments” to golfers who “defect” will cause them to lose the antitrust lawsuits already instituted, and a high probability of being found in violation of federal labor laws (if a suit is brought alleging they are treating “independent contractors” as employees are instituted—and I think one could [and should] be brought). Their continued rhetoric and actions in the face of these real possibilities of losing are bold, to say the least, and could very realistically be aiding in their defeat.

The Big Picture—Positive Impacts

No matter if you are “Team PGA” or “Team LIV,” if you take a step back, you have to conclude that this conflict will create positive change. Ultimately, this conflict can be boiled down to player rights and freedoms, which most people agree are good things to have. Before LIV, the PGA had no competition, and regardless of what the DoJ decided, the PGA was at least “acting” as a monopoly. It was “their way or the highway”—and “their way” maximized their own profits while giving the lowest it reasonably could to golfers to still incentivize them to play.

Now, the PGA has competition, which is causing it to have to shift some of its hoarded revenue to the players—which is what they all wanted in the first place. Mickelson has said that the changes the PGA announced (increasing the purses and adding some events with guaranteed payouts) are “welcomed” and a good sign—but these forced changes are ultimately why the PGA is so upset. They want to keep their power (and their money) close at hand, and they have had to relinquish some of both.

I think this is a good thing—competition makes the market (in this case for talent and golf content that is interesting) more efficient, still allowing the PGA to make money, but giving golfers more of their share. I think this is something golf fans should be happy about, no matter which side they are on in this ongoing LIV/PGA debacle.

Zachary Bryson is a graduate of Wake Forest University with B.A. in Economics and a Minor in Entrepreneurship. He is currently a JD candidate at Elon University School of Law, Class of 2023. You can connect with him via LinkedIn or follow him on Twitter at @ZacharySBryson.


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