It’s been seven months since Phil Mickelson and 10 other golfers sued the PGA Tour.
Expect many more months, if not years, to pass before there’s a resolution.
Why? For starters, both sides have vast financial resources. Matt Jones et. al v. PGA Tour v. LIV Golf et. al began with a group of individual golfers, but only three—Matt Jones, Bryson DeChambeau and Peter Uihlein—remain. It is essentially a battle between LIV, which is backed by the Public Investment Fund of the Kingdom of Saudi Arabia (PIF) and its $676 billion in assets, and the PGA Tour, a nonprofit that generates about $1.5 billion in revenue to back its countersuit.
LIV and the PGA Tour have both retained prominent antitrust attorneys from elite law firms that are accustomed to protracted litigation. Both leagues can afford the hourly rates, and neither will likely feel pressured to settle on account of mounting costs.
Those costs will accrue, since the case could last for the better part of the 2020s. The current trial date is Jan. 8, 2024, but it faces a likely postponement because of pretrial discovery objections and the expansion of the case to include PIF and its governor, Yasir Othman Al-Rumayyan.
LIV and the PGA Tour are also litigating in a California federal district court, where appeals go to the U.S. Court of Appeals for the Ninth Circuit. Data indicates that, from start to finish, Ninth Circuit appeals usually take between a year-and-half to about three years.
The loser of the Ninth Circuit appeal could then petition the U.S. Supreme Court to grant a writ of certiorari. Although the Supreme Court only grants about 1% of petitions, this litigation raises interesting legal questions about the application of antitrust law to membership organizations and their exclusivity rules.
It’s not as if the Supreme Court is averse to sports cases. In NCAA v. Alston, the Supreme Court assessed the antitrust implications of the NCAA and colleges agreeing to limit pay for athletes’ education related costs. A review by the Supreme Court of the LIV-PGA Tour dispute would elongate the timeline by a couple of years.
A settlement could end the proceedings, but it’s not clear how this case settles.
LIV could, of course, drop the lawsuit at any time. But the PGA Tour has countersued for tortious interference, arguing that LIV falsely communicated to golfers they had a legal right to join even though their PGA Tour contracts stated otherwise. The PGA Tour might not want the case to end if it feels its exclusivity language is worthy of a fight. Retaining its position as the showcase for top talent is the lifeblood for any league.
PIF and the Kingdom of Saudi Arabia, which filed an amicus brief last week, are also now key stakeholders. A magistrate judge recently concluded—over PIF’s objections—that the PGA Tour can subpoena PIF and Al-Rumayyan. This is significant because PIF holds investments in numerous U.S. companies, some of which face or will face litigation. Attorneys in those cases could use the LIV litigation to argue they too should have a right to subpoena PIF and Al-Rumayyan.
The right to subpoena means not only that PIF must turn over sensitive emails, including those sent to golfers, agents, broadcasters and sponsors, but Al-Rumayyan could be questioned under oath about topics that might pose problems for him at home. For example, Al-Rumayyan could be asked if PIF has lost business opportunities because of criticisms about the government and its leader, Crown Prince and Prime Minister Mohammed bin Salman. Al-Rumayyan would have to answer that question truthfully or face the possibility of being charged with perjury, a felony. How that answer is addressed by the Kingdom is less certain.
If instead LIV Golf and the PGA Tour negotiate a settlement that sets parameters on how they compete, the two leagues might unwittingly spawn a new antitrust problem. When competing businesses conspire to restrict competition in a market (even the market for the world’s best golfers), they can run afoul of antitrust law and face lawsuits. Carving up global competition for golf might address LIV and PGA Tour business needs, but it might also postpone a court battle for another day.
Antitrust considerations aren’t an abstract concern, either.
Last July, The Wall Street Journal reported that the Department of Justice’s antitrust division is probing the legal ramifications of competition for pro golfers. A DOJ investigation doesn’t necessarily mean the DOJ will bring a case. But it’s a reminder that however the case ends, there are at least two governments—those in the U.S. and Saudi Arabia—watching closely.