LIV Golfers File Antitrust Lawsuit Against PGA Tour
If you are not a subscriber of Huddle Up, join 60,000 other professional athletes, business executives & casual sports fans that receive it directly in their inbox each morning — it’s free.
This Email Is Sponsored By…
I’m excited to announce my partnership with MoonPay — the leader in web3 infrastructure.
Trusted by major crypto brands and millions of people worldwide, MoonPay is a portal to web3, a place where you can transact with peers globally and own your digital identity.
As blockchain technology continues to integrate with sports all over the world, teams and leagues are looking for simple solutions to unlock their digital markets.
MoonPay can help.
Whether you are front office staff, a business executive, or a marketer, and you’re looking to mint collectibles on blockchain to create an NFT marketplace for your brand, MoonPay’s technology can bring your digital strategies to life.
Eleven golfers on the Saudi-backed LIV Golf Tour filed an antitrust lawsuit against the PGA Tour on Wednesday. The lawsuit argues that the PGA Tour is protecting its longstanding monopoly on professional golf by engaging in unfair and anticompetitive practices against its former members.
“The Tour’s unlawful strategy has been both harmful to the players and successful in threatening LIV Golf’s otherwise-promising launch,” the complaint reads.
The lawsuit was filed on behalf of Phil Mickelson, Bryson DeChambeau, Ian Poulter, Pat Perez, Peter Uihlein, Abraham Ancer, Carlos Ortiz, Jason Kokrak, Talor Gooch, Hudson Swafford, and Matt Jones—and the latter three (Gooch, Swafford, and Jones) are also seeking a temporary restraining order that would allow them to play in next week’s FedEx Cup Playoffs.
“You should be confident in the legal merits of our position,” PGA Tour Commissioner Jay Monahan wrote to members in a memo on Wednesday. “Fundamentally, these suspended players — who are now Saudi Golf League employees — have walked away from the tour and now want back in.”
I’m not a lawyer, so I’ll leave it to others to speculate on the eventual outcome of what might be a multi-year legal battle. Instead, let’s look at what’s happened so far.
LIV Golf has played three events. They have hosted tournaments in London, Oregon, and New Jersey over the last two months, and they have five more events on the calendar this year, with the season finale taking place at Trump National Golf Club Doral in Miami, Florida, at the end of October.
The loud music, shotgun starts, live concerts, and champagne celebrations aren’t for everyone, especially golf purists, but it’s evident that LIV Golf is trying to do something different. Is that a problem? Not necessarily; it’s up to you to decide.
But the live audience has been less than spectacular. Sure, the picture above makes it look like every tee shot is Sunday at the Masters, yet $75 tickets were selling for just $1 on the secondary market last week ($6 if you include the $5 StubHub fee!), and I’ve seen several videos of people yelling in players backswing and protesters being removed from the course after heckling golfers, staff, and fans.
In short, I think what we have discussed since day one is still valid. This is obviously not a profitable business model in the short term, and you have to zoom out and look further down the road through a super optimistic lens for it to look any better in the long term.
For example, LIV Golf doesn’t have big sponsors. They aren’t selling tens of millions of dollars in merchandise. They have poor ticket sales and still don’t have a cable TV deal in place—they stream for free on Facebook and YouTube.
So that means they have already committed hundreds of millions of dollars, and potentially $1 billion-plus when you add up course fees, infrastructure, etc., without any meaningful way to pay for it.
Of course, the elephant in the room is Saudi Arabia. The LIV Tour is financially backed by Saudi’s $620 billion sovereign wealth fund, and they obviously have the capital to withstand short-term losses, even if they potentially reach ten figures plus.
But that’s why I think the PGA Tour should be slightly more concerned than others might believe. Because nothing is more dangerous than going up against someone with billions of dollars in cash and nothing to lose.
Will players and fans care less about the moral aspect of the situation as this drags out? Do more players start to opt for guaranteed cash and less travel on the LIV Tour versus fighting for cuts and paychecks on the PGA Tour? Or does Saudi lose interest, cut off funding, and the whole thing gets shut down?
I don’t know the answer to these questions, and I’m not sure anyone does. But this is one of the most fascinating conflicts I’ve seen in the sports business.
My gut feeling is that this isn’t going away any time soon, and if I were the PGA Tour, I would start thinking outside the box. Why? Because simply increasing prize money is a game LIV Golf was always going to win—the PGA Tour needs to think differently.
I hope everyone has a great day. We’ll talk tomorrow.
Enjoy this content? Subscribe to the Huddle Up YouTube Channel.
Your feedback helps me improve Huddle Up. How did you like today’s post?
Loved | Great | Good | Meh | Bad
The Joe Pomp Show: New episode with Andrew Brandt is now live!
Andrew Brandt is the former Vice President of the Green Bay Packers and one of the sharpest minds in the sports business. So we sat down to discuss various topics around the NFL, including Deshaun Watson's six-game suspension, the Miami Dolphins tampering case, and more. Enjoy!
Ps. I highly recommend subscribing to Andrew’s newsletter. It’s fantastic.