For PGA Tour commissioner Jay Monahan, it must have felt like dejá vu all over again last week when word broke of a new Saudi-backed venture and its plans to launch a global golf league.
The prospect of a rival circuit, threatening to siphon off top Tour talent, has come up more than once before.
This time around, the Tour has yet to issue an official response and did not respond to GOLF.com’s request for comment. But in the past, its stance has been consistent: Sign on with a rival league, Monahan has told players, and prepare to face sanctions from the Tour.
That’s the commissioner laying down the law.
But does he have the actual law behind him?
In his quest to prevent players from jumping ship, how much legal leverage does Monahan have?
That question gets into the area of antitrust law, which, though no small subject, essentially comes down “only two rules,” according to Craig Seebald, a partner and antitrust specialist with Vinson & Elkins, an international law firm.
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“We worry about monopolization,” Seebald says. “And we worry about what’s called conspiracy.”
Broadly defined, the first is when an entity uses unfair practices to gain or maintain a stranglehold on a market; the second is when two or more entities work together to thwart competition through, say, price-fixing or some other conspiratorial shenanigans.
Among major sports, baseball is unique in being exempt from antitrust laws.
Golf does not enjoy that luxury.
In other words, Seebald says, “all the rules that apply to Microsoft and Google apply to the PGA Tour.”
Regarded in that light, Seebald says that the Tour could be treading on fraught legal terrain if it takes aggressive steps to prevent players from competing on a rival circuit, whether by imposing or threatening to impose fines, suspensions or some other disciplinary action. Such moves might be regarded as an attempt to squelch competition, which could trigger an antitrust claim. The same is true if the Tour were seen to be colluding with another organization to stifle an outside challenge. It’s no secret, for instance, that the PGA and European tours have strengthened their ties in recent years. That relationship could, in theory, raise a legal risk.
“I would be concerned if it looked like (the two tours) were discussing or coordinating their reaction to screw the Saudi tour,” Seebald says. “That potentially could be an issue.”
An antitrust claim could be filed by an individual player, multiple players or the rival tour itself. It could also come from the U.S. government. The Federal Trade Commission, which administers antitrust and consumer protection legislation, has trained a wary eye on the PGA Tour before. In the early 1990s, the agency took a long hard look at two Tour rules in particular: one that requires players to get permission from the commissioner to participate in non-Tour events, and another that places the same condition on appearances on televised golf programs.
In 1994, following a four-year investigation, FTC attorneys determined that both rules violated antitrust laws and recommended that federal action be taken to have them nullified.
That no such action was ever taken owed in part to a vigorous lobbying campaign by the PGA Tour under then-commissioner Tim Finchem. Flexing its muscles inside the Beltway, the Tour exerted enough pressure by political proxy that the FTC’s commissioners wound up backing down, despite the findings of their staff.
As many avid golf fans know, 1994 was also the year that Greg Norman announced his plans to launch a World Tour, an early iteration of the kind of rival concept that has been floated in various forms in the years since. Finchem’s response at the time presaged Monahan’s. He warned players of repercussions if they pegged it on the rival circuit, and eventually the World Tour went away without a legal fight.
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Now, Norman, who declined through a representative to comment for this article, is back as the CEO of Saudi-funded LIV Golf Investments, which reportedly plans to launch a global golf league this spring. Given the money and apparent momentum behind it, it does not seem like the sort of venture destined to fade quietly into the night.
Adding to the intrigue is a report of the involvement of another prominent golf-world figure, former President Donald Trump, who, according to No Laying Up, is said to have offered up his courses as potential host sites for the league’s events.
Trump is no stranger to antitrust litigation. In the 1980s, as owner of the New Jersey Generals of the United States Football League, Trump was part of USFL suit against the NFL, alleging that the league was an unlawful monopoly (though the jury sided with the USFL, it awarded what amounted to just over $3 dollars in damages).
Different facts. Different times.
But, Seebald says, an antitrust suit against the PGA Tour would be “right out of Donald Trump’s USFL playbook.”
The plot could thicken in all sorts of ways. But Seebald is quick to note that it’s impossible to say whether or when any legal challenges might emerge, much less which side would come out on top.
Marc Edelman, a law professor and expert in sports business at the Zicklin School of Business, Baruch College, at City University of New York, agrees.
“At this stage, it seems very early to presume the outcome of any such case, especially given that a complaint has not been filed,” Edelman says.
Like Seebald, though, Edelman believes that aggressive action by the Tour to keep players off the rival circuit could bring the risk of an antitrust claim.
Meantime, golf fans are left to watch and wonder, waiting to see how this latest challenge to the Tour will develop and what the Tour’s response will be.
Seebald’s best guess is that Monahan will stick to the same ‘it’s us against them’ position.
“It’s risky, but what other choice does he have?” Seebald says.
In golf, you can’t play defense. It remains to be seen whether the Tour will have to play it in the courts.
