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Monday, May 20, 2024
Law

LIV Golf, PGA Tour Seek Dismissal of Federal Antitrust Case

  • Motion was filed with prejudice, meaning the case can’t be refiled even if the regulators move to block the deal.
  • Both sides spent tens of millions of dollars on lawyers before the partnership was announced last week.
The end of the LIV PGA feud is near.
Michael Madrid-USA TODAY Sports

The LIV Golf-PGA Tour antitrust case is effectively over. 

Ten days after detente was announced, a stipulation of dismissal was filed in federal court on Friday. The motion wasn’t unexpected, but the two words contained in the document were newsworthy: “with prejudice.”

LIV Golf won’t be able to re-file the case even as the there are lingering questions over last week’s tentative agreement. Regulators and the Justice Department could block collaboration, which the two sides still need to finalize since there’s just a framework of a deal currently.

In the five-page filing, the PGA Tour also seeks dismissal of its counterclaim against Saudi Arabia’s Public Investment, LIV’s major financial backer. PIF also agreed to dismiss its appeal over of a discovery ruling in the case.

And beyond potential government intervention both in the U.S. and in Europe, the PGA Tour board will have a say.

Sources with knowlege of the framework told Front Office Sports that the deal had a 10 days for the lawsuit to be dropped — and the filing hit the federal court docket with not much time to spare before that deadline tolled.

The case won’t end until Judge Beth Labson Freeman issues a dismissal, but that’s a mere formality. Before the motion to dismiss was filed, Freeman set an Aug. 3 hearing for The New York Time’s motion to intervene in a bid to gain access to many of the documents in the case that remain under seal.

Each side spent tens of millions in lawyer fees since the case was initially filed last summer, and the case wasn’t set to go to trial for at least another year. 

PGA Tour commissioner Jay Monahan was the subject of immense backlash and accusations of hypocrisy for his role in the June 6 infamous merger, with many Tour players expressing a sense of “betrayal” and U.S. lawmakers calling the Tour boss out on his sudden change of heart on Saudi Arabia. 

PIF committed billions to back LIV Golf and is expected to do the same under the new setup. The agreement hasn’t quieted concerns that Saudi Arabia is using pro golf as another sports-washing endeavor to counter the country’s human rights record. 

Beyond possible intervention by the Federal Trade Commission, the DOJ could also block the deal. The DOJ has investigated the PGA Tour for about a year over some of the same issues that LIV Golf had laid out in the lawsuit and will conduct a review of the announced partnership. 

On the course, players from both circuits compete in the third major tournament of the year, the U.S. Open, from Los Angeles Country Club. 

Exactly when LIV Golf players — suspended when they left the PGA Tour — could be back under the PGA Tour umbrella could hinge on regulatory approval. Until then, LIV and the PGA Tour golfers will continue to compete in their respective leagues. 

Phil Mickelson, Bryson DeChambeau, and Matt Jones were among the 11 LIV golfers who originally sued the PGA Tour in the U.S. District Court for the Northern District of California in August. The antitrust lawsuit alleged the PGA Tour used its dominant position in the sport “to craft an arsenal of anticompetitive restraints to protect its long-standing monopoly.”

Along with the lawsuit, Talor Gooch, Hudson Swafford, and Matt Jones sought a temporary restraining order that would have put their PGA Tour suspensions on hold so they could play in the 2022 FedEx Cup Playoffs. That injunction was denied by Freeman. 

While much of the case was under seal, lawyers for LIV Golf alleged the PGA Tour undertook several anti-competitive maneuvers in an attempt to thwart LIV: 

  • The PGA Tour allegedly flew members of 9/11 Justice — a group that includes hundreds of family members of victims and survivors of the terrorist attacks — to Oregon ahead of LIV Golf’s U.S. debut in Oregon last June. The group also protested out front of the LIV Golf event weeks later in New Jersey and spent heavily on attack ads. 
  • Facing a PGA Tour suspension and with alleged pressure applied against their sponsors, LIV claimed it had to overpay to lure players to its league. 
  • Beyond its employees and players, the PGA Tour dispatched other influential persons on its behalf,” including members of Augusta National like Secretary of State Condoleezza Rice.
  • A London-based PGA Tour executive “used illegal means to dissuade numerous broadcasters in international markets from signing broadcast contracts with LIV.”

As the case progressed, all the LIV Golf plaintiffs dropped from the case as LIV Golf became the sole plaintiff — and LIV’s courtroom losses began to mount.

The biggest setbacks were related to PIF, which had fought to avoid discovery in the case. A magistrate judge ruled in February PIF had to turn over documents subpoenaed by the PGA Tour, and fund governor Yasir Al-Rumayyan and other PIF officials had to sit for depositions. 

PIF appealed the decision to the 9th Circuit in March as its lawyers argued that the fund had sovereign immunity and, as a result, isn’t subject to discovery in U.S. courts. The likelihood of success of that appeal was considered slim, and a ruling against PIF could have had implications across the fund’s massive U.S. portfolio of investments. 

Like the main litigation, the appeal will be dismissed well before the 9th Circuit makes what could have been a precedent-setting ruling. 

Doug Greenberg contributed to this report. 

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