When Judge Beth Labson Freeman held a hearing two weeks ago concerning LIV golfers suing the PGA Tour, much of the discussion centered on a party not in the room: LIV Golf. That has changed.
The Saudi-backed league recently joined the high-profile antitrust case headlined by Phil Mickelson, and LIV’s addition comes with advantages and risks for the plaintiffs.
On Aug. 26, attorneys for the plaintiffs filed a 118-page amended complaint, 23 days after they filed their original, 106-page complaint. While LIV is a new plaintiff, four golfers—Pat Perez, Carlos Ortiz, Abraham Ancer and Jason Kokrak—have withdrawn. Perez and Ortiz told journalists they still support the lawsuit but are no longer interested in taking on the Tour. Kokrak, as Sportico detailed, recently lost an endorsement deal with a U.S. law firm as a result of joining LIV.
The amended complaint largely tracks the same legal arguments. As seven golfers (down from an original 11 who filed suit) and now LIV contend, the PGA Tour allegedly behaves as an illegal monopsony in exerting too much control over the buying of services offered by elite golfers. The Tour is depicted as trying to undermine market competition by restricting golfers’ ability to play in competitor leagues, through, for instance, its power to suspend golfers. The Tour’s alleged suppression is portrayed as causing economic harm to golfers, who are forced to pick between the Tour and LIV, and consumers, who are denied chances to watch golf competitions that feature the best golfers instead of select golfers from one of the two leagues.
LIV’s entry is reflected in a new count, tortious interference, which refers to wrongfully inducing another party to breach a contract. LIV contends the PGA Tour has tried to “prevent professional golfers and other third parties from performing their contracts with LIV Golf.” The claim for tortious interference illustrates how LIV, as a plaintiff, enables additional legal arguments. A wider scope of claims will make it harder for the Tour to convince Judge Freeman to dismiss the entire case.
As a plaintiff, LIV can also attempt to rebut a potential deficiency in the original case. In denying a motion for a restraining order that would have permitted Talor Gooch, Hudson Swafford and Matt Jones to play in the FedEx Cup Playoffs, Freeman drew attention to LIV golfers portraying their new league as superior to the PGA Tour and to the golfers’ own expert underscoring the significance of LIV’s large payments.
If LIV is better than the PGA Tour, Freeman’s reasoning suggested, how can the Tour be a monopoly?
The amended complaint attempts to address that concern by suggesting LIV can only compete by excessively paying golfers, which is neither efficient nor evidence of a competitive market for elite golfers’ services.
“While LIV Golf has been able to pursue the launch of its business in the face of supracompetitive costs and artificially reduced access to supply (i.e. players), facing headwinds of this nature is not sustainable,” the amended complaint warns. To that end, the complaint maintains “LIV Golf’s entry will be thwarted and its ability to maintain a meaningful competitive presence in the markets will be destroyed,” unless the court sides with LIV.
A loss, LIV warns, “will harm not only LIV Golf, but also competition.” This is a crucial point, since it tries to convince Freeman, and potential jurors, that LIV’s capacity to compete is not a sign the marketplace is competitive but rather that LIV has the wherewithal and willingness to overspend at this time.
The addition of LIV also ensures the case doesn’t rely on the continued willingness of individual golfers to litigate against the PGA Tour. With four of the 11 golfers withdrawing within only a few weeks of the case starting, some of the remaining seven could eventually grow tired of the attention and optics and similarly opt out. The case is poised to last several years, with a trial date currently scheduled for Jan. 8, 2024, and potential appeals that could run well into the latter half of the decade. LIV, which is mostly funded by the Public Investment Fund of Saudi Arabia, has the resources and willingness to remain until the case concludes.
LIV joining presents risks, too.
For starters, the PGA Tour could countersue LIV for tortious interference, arguing that LIV induced Tour golfers to violate their contractual obligations to adhere to Tour rules. The Tour has likely suffered economic harm in the form of fewer elite golfers, as well as potential harms in terms of lost sponsorship and marketing opportunities.
Another risk for LIV is that of pretrial discovery. Even at this early stage of the litigation, the two sides are already contesting whether certain materials comprise trade secrets.
Should Freeman order discovery, PGA Tour attorneys will likely seek witness testimony, emails, texts and other evidence from LIV related to its communications with Tour golfers and its relationship to the government of Saudi Arabia—particularly Crown Prince Mohammed bin Salman, whom many in the international community, including President Biden, have criticized for the murder of Washington Post writer Jamal Khashoggi. Both the complaint and amended complaints contend “the Tour has no problem accepting its own sponsorship money from companies that do billions of dollars in business with Saudi Arabia each year.”
However, expect the Tour to draw distinctions in its relationship with Saudi funding from that of LIV and to rely on any advantageous findings from the Department of Justice’s probe into LIV.