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Sep 20, 2022

LIV Free, Die Hard: An Analysis of the Antitrust Issues Surrounding the PGA Tour and LIV Golf

By: Ryder McCool

Golf courses are the home to many different topics of conversation. Still, since 2020, not even COVID-19 has been discussed on the course or in the clubhouse as much as LIV Golf. Everyone seems to have an opinion on the impact of the Saudi-backed sportswashing venture on professional golf. LIV—the upstart professional golf tour headed by Greg Norman and funded by Saudi Arabia—dominated the conversation for a good reason.

While first shrugged off like Norman’s proposed World Tour in 1994, the international league has attracted some of golf’s biggest names, headlined by Phil Mickelson, Dustin Johnson, and 2022’s Champion Golfer of the Year, Cameron Smith. Although the PGA Tour has long been the preeminent place for the world’s best to tee it up, LIV is changing how professional golf is played and how its players are treated.

From 54-hole events to shotgun starts, LIV Golf attempts to modernize the golf playing and viewing experience. However, the PGA Tour has not sat idly by while LIV challenges its place atop professional golf. There are many battles to come regarding the treatment of LIV Golf signees and the upstart Tour, but they will not be settled on the course but in a courtroom.

The modern PGA Tour has been the preeminent professional golf tour since 1968, when some of the game’s most significant icons, including Jack Nicklaus and Arnold Palmer, broke away from the PGA of America. The PGA Tour has long classified its players as independent contractors. Still, despite this classification, it has a rule that players must seek permission to play in non-PGA Tour-sanctioned events.

Until recently, this hasn’t been an issue; but, once the PGA Tour denied some of its players’ requests to play in LIV’s first event in June 2022, the word antitrust surfaced. Severe accusations of antitrust violations arose because the PGA Tour suspended any player that played in the LIV event, and Section 2 of the Sherman Act prohibits monopolization and actors from inhibiting competition. Competition is a fundamental aspect of capitalism, and the Sherman Act ensures this aspect is protected, even on the golf course.

LIV Golf and its players that the PGA Tour has suspended contend that the suspensions directly impact competition and violate the Sherman Act. Arguments supporting the PGA Tour’s restriction on competition against Section 2 stem from the PGA Tour restricting LIV golfers from playing on the PGA Tour, which arguably only diminishes its product. One of the only explanations for this business model would be the PGA Tour aiming to lessen its product quality.

Although this argument may seem compelling at first glance, the PGA Tour likely will argue that it is not a monopoly and that having rules to ensure its players play in its tournaments is in line with its rights as an organization. The suspensions were not a surprise, and the players knew the consequences of playing in a LIV Golf event two years before the first event. The PGA Tour is not the only tour players can play on; there are hundreds of other professional golf tours worldwide. Ultimately, the success LIV Golf has enjoyed since its first tournament, and its signing of 26 of the top 100 players in the world, begs the argument that the PGA Tour’s suspensions have not thwarted competition in violation of Section 2.

Legally, a lawsuit cannot be filed alleging antitrust issues without someone or something suffering an injury and, specifically, suffering an antitrust injury to competition. LIV Golf has successfully created a new golf tour that has signed some of the best players in the world to its roster and receives hundreds of thousands of viewers for each event. Considering this success, LIV Golf will be hard-pressed to show it has sustained an injury when this is the state of its Tour. In addition to LIV Golf, some players have joined LIV Golf after voluntarily giving up their membership to the PGA Tour. This group of players also likely cannot show injury, considering the PGA Tour did not suspend them because they were no longer members. 

A subset of LIV Golf players has a better argument than LIV Golf as an entity or the players that gave up their PGA Tour memberships. Many of LIV Golf’s players are PGA Tour members suspended from playing in future events on the PGA Tour. These players have more of a leg to stand on in court to argue they have suffered an injury because of harm to competition. Their argument finds support because these players may no longer participate in PGA Tour events because of their involvement with LIV Golf. The suspensions are, potentially, a direct restraint on competition by the PGA Tour. We will have to wait to see how the courts handle the allegations made by this group of players, but they have the best argument as to the PGA Tour’s alleged antitrust violation.

Much to the PGA Tour’s disdain, LIV Golf does not seem to be going anywhere. The legal issues are ripe and complex, and LIV continues to grow in popularity. Until resolved, the topic of conversation at golf courses will remain fixed on antitrust and sportswashing. At the same time, golfers and fans await not the result of a tournament, but the opinion of a judge and jury.