The PGA Tour just shook up its LIV Golf lawsuit in a major way. Will the strategy pay off?
In a significant legal move, the PGA Tour is pivoting the focus of its countersuit against LIV Golf to the Saudi Arabian Public Investment Fund and its governor, Yasir Al-Rumayyan. According to court documents filed Tuesday, the Tour is moving to add Al-Rumayyan and the PIF itself as counter-defendants in the case.
Why? The Tour argues that instead of LIV Golf and Greg Norman having autonomy, it’s Al-Rumayyan and the PIF that have ultimate power over LIV’s business, inclusive of recruiting players, approving contracts, determining payout structures and even promising to indemnify them from financial responsibility in lawsuits. (LIV Golf is a subsidiary of LIV Golf Investments, which is funded entirely by the PIF, which owns 93% of LIV.)
All of these alleged actions, the Tour argues, are tortuous interference of the contracts the defecting players signed with the PGA Tour, as well as the contracts between the Tour and players who stayed (but LIV actively recruited).
The lawsuit at hand is a countersuit waged by the PGA Tour against LIV Golf in response to a separate antitrust suit LIV filed against the Tour for anticompetitive practices. In short, everyone is suing everyone and we’ve reached the point where other industry leaders are being pulled into it. (On Monday, both sides filed a joint statement on whether or not LIV can gain access to communications between PGA Tour policy board directors and dozens of Augusta National members.)
As for this suit, the main point remains: The PGA Tour believes that Norman is simply an acting CEO and must retain approval for all meaningful decisions from Al-Rumayyan and the PIF. “It is Al-Rumayyan who functions as LIV’s chief executive,” the Tour alleges, adding that LIV’s leadership understands Al-Rumayyan to be “de facto CEO,” and that Al-Rumayyan micromanages “LIV’s day-to-day operations both while in the United State and abroad.”
“And even once contracts are signed and debts accrued,” the Tour alleges, “PIF holds the purse strings: none of LIV’s partners or golfers gets paid until PIF and Mr. Al-Rumayyan agree to distribute the money.”
The Tour has recently worked hard to subpoena Al-Rumayyan and the PIF for various documents about its actions toward players and agents in its efforts to get a golf league off the ground. Al-Rumayyan’s text messages and emails — with the likes of Bryson DeChambeau and sports agent Casey Wasserman, among others — were included in the Tour’s presentation during a discovery hearing on Jan. 13. Presumably, those documents were acquired via discovery with players and agents, not Al-Rumayyan himself, who has evaded the discovery process to this point. Also presented during the three-hour hearing was a key document referred to as the Shareholders’ Agreement.
The agreement, as it has been shared with the Tour, was signed by Al-Rumayyan. In it, the Tour states, the PIF is “required to approve” the reported nine-figure contracts signed by the likes of DeChambeau, Dustin Johnson and Phil Mickelson. During the Jan. 13 hearing LIV argued that the Tour was misinterpreting the agreement, but what’s clear is the Tour has quickly doubled down on what it believes to be the truth.
Jodi Balsam, a sports law professor at Brooklyn Law School, has been sharing her insights on the cases on the Golf Channel and on Twitter. “About time,” she tweeted Tuesday night. “By adding Saudi PIF and Al-Rumayyan as defendants in tortious interference counterclaim, PGA Tour strengthens argument for discovery against those parties, something they and LIV Golf are so anxious to avoid, it may change (end?) the course of the lawsuit.”
Though wrangling Al-Rumayyan and the PIF into a U.S. court room has proven difficult for PGA Tour lawyers, if Balsam is correct, we could see swift changes in the trajectory of the lawsuits, pending an order on the amended counterclaim by Judge Beth Labson Freeman.
All of this comes following various structural changes to LIV Golf’s corporate hierarchy in recent months. COO Atul Khosla resigned from his post in the fall after LIV’s first season. According to reporting in The Telegraph, which was cited in Tuesday night’s filing, Khosla’s resignation came after a “confrontation” with Al-Rumayyan. Khosla’s role has been filled by a trio of directors from golf marketing company Performance54 — all of whom have all been tied to the idea of a rival tour for years. Then this week, Sports Illustrated reported that Majed Al-Sorour, who was a managing director for LIV, would no longer be in that position, and that Norman would now have more direct contact with Al-Rumayyan.