In 2007, Nicklaus sold a controlling partnership in a selection of companies he’d started to Emigrant Bank and its founder Howard Milstein. Milstein went on to create an umbrella company called 8 A.M. Golf that holds a number of properties related to the sport: Golf Magazine and Golf.com, Miura Golf, Club Conex, True Spec Golf and GolfLogix. As part of the mix, the Nicklaus Companies offer goods and services ranging from course design and real estate development to branded merchandise and golf equipment. Milstein’s $145 million purchase included Nicklaus’ publicity rights, trademark registrations and other intellectual property.
In a complaint filed in a New York trial court on May 13, Nicklaus Companies accuses the Golden Bear of breaching that contract, acting in bad faith and tortiously interfering with Nicklaus Companies’ business dealings. The company seeks, among other remedies, monetary damages and an injunction that would order Nicklaus to “cease providing [his] golf course design and marketing services “including commercial endorsements” and to stop “offering rights to use Nicklaus IP for commercial purposes” without authorization.
In a statement released to the media, Nicklaus flatly denies the accusations, dismissing them as “untrue.”
Though LIV Golf isn’t mentioned in the complaint, the rival league draws considerable attention. Nicklaus allegedly discussed his potential public support of Golf Saudi in exchange for compensation.
Nicklaus Companies charges that Nicklaus would betray his contract by endorsing “a rival of the PGA Tour,” with whom it is “open conflict.” The complaint maintains Nicklaus could have damaged his brand—the core of what Nicklaus Companies purchased—by doing so. An endorsement, Nicklaus Companies asserts, would risk “negative publicity, especially given Mr. Nicklaus’s widespread recognition as one of the three founders of the modern PGA Tour.” To advance that point, Nicklaus Companies highlights that “Phil Mickelson’s paid endorsement of the proposed league . . . resulted in the loss of many of his longstanding marketing relationships.”
In a May 16 interview with the Firepit Collective, Nicklaus, 82, claimed he’d turned down more than $100 million to take a position with LIV Golf similar to the one now held by Greg Norman. That interview took place days after the suit had been filed but before anyone had reported its existence.
Nicklaus Companies goes so far as to claim it “essentially saved Mr. Nicklaus from himself by extricating him from a controversial project.” The company did so, it contends, by “convincing” Nicklaus to “stop exploring a deal for the endorsement of the Saudi-backed league.”
Beyond the LIV intrigue, Nicklaus is portrayed as engaging in multiple other types of wrongful acts.
For instance, he is accused of undermining Nicklaus Companies in its negotiations with an unnamed video game developer. According to the suit, Nicklaus wrongfully rejected overtures to license the use of his name and likeness for a video game last year. Nicklaus, the suit insists, had no right to deny the request. The company says it was then “compelled to expend extraordinary time, effort and money to salvage a deal” and asserts that “Nicklaus’s wrongful conduct sowed confusion . . . risked current and future revenue opportunities, and damaged Nicklaus Companies’ goodwill with a strategic business partner.”
Nicklaus is also accused of illegally licensing his IP to a Belgian event promoter behind the Soudal Open, which was held on May 14-15. Nicklaus allegedly agreed to partake in paid promotional marketing appearances and licensed his identity for use in advertising. That supposed deal, Nicklaus Companies contends, “was in direct contravention” of the company’s “exclusive rights to Nicklaus IP.”
Nicklaus Companies acknowledges it “had been told” that Nicklaus “was considering attending the Soudal Open as a guest,” but insists it lacked knowledge of Nicklaus negotiating pay. Although the complaint says Nicklaus eventually opted out of the marketing appearances, the promoter, Nicklaus Companies charges, “persisted in its use of the Nicklaus IP for more than three months, citing the purported grant of a license of from Mr. Nicklaus.”
In the weeks ahead, Nicklaus’ attorneys will answer the complaint, rebut the assertions and seek the complaint’s dismissal. Expect them to argue that Nicklaus did not engage in the conduct described in the complaint or that even if he did, the conduct would not have violated the contract.