In law, a court generally does not hear a legal matter until there is a real dispute. Hypotheticals and maybes are not enough.
For golf fans wondering if the PGA Tour can legally discipline its members for playing LIV Golf’s first event at the Centurion Club outside of London, that issue now has a real dispute and could be contentious.
On Thursday, PGA Tour Commissioner Jay Monahan announced in a letter to members that golfers who compete without a release, “are suspended or no longer eligible” to play on the Tour, including the Presidents Cup.
Monahan’s reasoning is simple. As a contractual condition of Tour membership, golfers agree to participate in Tour events and agree not to participate in other events without Tour permission. In this sense, players contractually agree to the Player’s Handbook, which explicitly allows the Tour to fine, suspend or ban members for violating the regulations.
Monahan’s letter acknowledged that members were rationally making decisions “for their own financial reasons.” But he also noted that when a person joins a member organization, there are duties and responsibilities that must be followed.
Players who join LIV, Monahan pointed out, do so without permission from the Tour. According to Monahan, these players “cannot demand the same benefits, considerations, opportunities and platform of PGA Tour membership” as Tour members who follow the rules.
“This expectation,” Monahan contextualized for Tour members, “disrespects you, our fans and our partners.”
LIV Golf sees the situation quite differently. In a statement, the new league called Monahan’s statement “vindictive” and “deepens the rift between the Tour and its members.” LIV also finds it hypocritical that the Tour, “an organization dedicated to creating opportunities for golfers to play the game,” is “stopping golfers from playing.” LIV concluded her statement with a warning, saying the Tour will not have “the last word on this” and stressing that “the era of free will is beginning.”
Chances are a court will have the final say. As detailed in more detail in other Sportico legal histories, there are at least four types of litigation that could follow.
- Suspended golfers could sue the Tour for antitrust and contract claims.
A golfer who lost their Tour membership by participating in LIV events without permission could ask a court for a restraining order. If granted, the order would prohibit the Tour from carrying out a suspension. Le Tour may appeal such an order to the appropriate US Court of Appeals. Similarly, the denial of a restraining order could be appealed by a player.
In this type of litigation, the golfer would argue that the Tour operates as a monopsony in violation of federal antitrust law. The Tour, according to this theory, precludes other purchasers (i.e. LIV) of services offered by elite golfers. Aware that antitrust law is primarily concerned with protecting consumers, Golfer would insist that excluding rival organizations is detrimental to golf fans. These fans, it will be said, are better off if they can watch their favorite players compete in as many tournaments as possible. In statements to the media, LIV also maintained that fans would appreciate its format as a point of differentiation from the Tour format. The golfer could therefore argue that the Tour robs golf consumers of a chance to see an exciting new format.
In addition to an antitrust complaint, the golfer is said to be arguing that the Tour acted in an arbitrary and capricious manner — the applicable legal standard for judging how a member organization enforces its own rules — in denying permits to play for LIV. If the Tour has a history of granting releases easily, a player might say the decision to deny LIV is intended as a punitive measure that betrays past practices.
The Tower would be armed with several defenses.
First, the Tour would emphasize that members contractually agree to follow the rules of the Tour. These rules are in writing and, as a condition of membership, golfers agree to them. If members do not want to follow these rules, they can, as Dustin Johnson and many other golfers have done, leave the Tour. In other words, Tour golfers can’t have their cake and eat it too.
Second, the Tour would reject the idea that its rules harm golf fans and, by extension, consumers. The Tour would claim that it built a model of a well-organized competition system that made the sport hugely popular and lucrative, including for its member players. To prevent the Tour from enforcing its rules, the Tour would argue, harm, not benefit golf fans. There would be chaos in the industry and the Tour would suffer from a reduced ability to negotiate valuable sponsors and other contracts popular with fans. This defense would also rely on precedent. Nearly 50 years ago, the American Tennis Association leaned on her to defeat an antitrust lawsuit brought by member players whom she had denied 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 should play fewer events, undermining the argument that consumers benefit from the new outfit.
Thirdly, the Tour would like to point out that, like other sports leagues, it enjoys great latitude in the application of its rules. Courts constantly defer to decision-making by private organizations as long as they follow their own rules. Here, the Tour would maintain that it warned golfers in advance of what could happen and now it has.
- LIV Golf could sue the Tour under antitrust and tortious interference allegations.
LIV Golf is also a potential plaintiff. The league could raise antitrust arguments similar to those discussed above and those claims would focus on (alleged) consumer harm. Separately, LIV could argue that by punishing member golfers for doing business with LIV, the Tour tortiously interfered with LIV’s potential business dealings.
The Tour, on the other hand, would point out that its members have agreed to follow the rules, that the sport has become very popular with fans (consumers) through its system and that as a member organization it has every right to apply its own rules.
- The suspended Tour golfers and LIV could sue the Tour’s business partners as co-defendants.
Antitrust lawsuits are among the most dreaded in law. Those who succeed can attract treble damages, which means that if a jury finds the defendant caused $10 million in damages to economic competition, those damages are automatically multiplied by three. Plaintiff attorneys can make not-so-small fortunes with antitrust cases. Antitrust lawsuits also tend to be very expensive, requiring expert witnesses and other parties and often lasting several years (quick illustration: NCAA vs. Alston was in court for about eight years).
Any entity, including sponsors, courses and media companies, that does business with the Tour could be joined in an antitrust lawsuit over the theory that it is part of an illegal conspiracy to interfere with competition economic and harm consumers.
This may be one of the reasons why, for example, the United States Golf Association has announced that it will allow golfers who participate in the LIV event in London to also participate in the Next week’s US Open at the Country Club in Brookline, Mass. The USGA, which oversees the 14 national championship tournaments, including the US Open and the US Women’s Open, has no obligation to follow the rules of the Tour and, for antitrust reasons, not to apply the Tour bans. On the other hand, the USGA has always maintained that it can deny entry to anyone at any time for any reason. He also pointed out that his decision only pertains to this year’s event, suggesting the USGA’s decision could buy time to let things play out. The Professional Golfers’ Association of America, meanwhile, would take a similar legal risk by imposing a Tour ban.
- The Tour could sue LIV for tortious interference.
Tour golfers are independent contractors rather than employees. This distinction has significant antitrust significance. If the golfers were employed and unionized, they would enter into a collective bargaining agreement that would void their right to sue the Tour under antitrust law. But even as independent contractors, they are members who have contractual duties towards the Tour.
The Tour could argue that LIV wrongfully interfered with its membership contracts by enticing golfers to leave the Tour (like Johnson) or attempt to play in violation of their Tour membership (like Mickelson). LIV, in response, would argue that golfers are adults who can make their own career decisions, and offering them a chance to play in other events is not illegal.