Is Antitrust Liability In The Future For The PGA Tour, And Beyond?

• Published date: 05 August 2022
• Subject Matter: nti-trust/Competition Law, Antitrust, EU Competition
• Law Firm: BakerHostetler
• Author: Mr Aaron O'Brien and Alyse Stach

On August 3, 2022, 11 professional golfers, led by Phil Mickelson, filed an antitrust complaint in the Northern District of California against the PGA Tour for the actions it took against the golfers - including suspension from PGA Tour events - for their participation in events for the new Saudi-backed LIV Golf Invitational Series (LIV Golf). It is no secret that the new LIV Golf league seeks to compete with the PGA Tour, having publicly offered nine-figure payments to players joining its tournaments.

In addition to the recently filed federal lawsuit, the PGA Tour's reaction to competition from LIV Golf appears to be under federal investigation. The U.S. Department of Justice (DOJ) is reportedly conducting an antitrust investigation of the PGA Tour into possible anticompetitive conduct relating to efforts to keep PGA Tour players from entering LIV Golf tournaments.

The DOJ's Antitrust Division is reported to have reached out to players' agents and sent inquiries about the PGA Tour's actions in recent months relating to LIV Golf and about PGA Tour bylaws governing players' participation in other golf events. It is possible that the investigation will reach beyond players and those directly affiliated with the PGA Tour to advertisers, sponsors and other tours to determine whether there have been any antitrust violations.

In a move that it had previewed, in early June, the PGA Tour indefinitely suspended 17 players who teed off at LIV Golf's inaugural tournament in London. The golfers are considered independent contractors. The antitrust allegations focus on whether that action can be read as a restriction of the players' ability to freely compete in a competitor's event and a violation of the antitrust laws.

There is ample precedent in the intersection of sports and antitrust law that may impact an eventual antitrust fight here. First, notably, professional golf does not enjoy a general exemption from the antitrust laws. In fact, in a 1957 case where the National Football League blacklisted players who played for rival leagues, the Supreme Court found that professional football was subject to antitrust laws, and expressly limited the sports exemption to baseball. See Radovich v. NFL, 352 U.S. 445 (1957). The Supreme Court in Radovich found that the affected players had stated a claim under the antitrust laws and, thus, the NFL allowed players to join rival leagues. This case will delve into whether the Radovich precedent will be applicable in the golf...