Phil Mickelson and 10 Other LIV Golfers File Antitrust Lawsuit Against PGA Tour

The PGA Tour has suspended players lured to its rival by extraordinary appearance fees and record prize funds, pointing to Tour bylaws that bar members from appearing in other events without the permission of the commissioner. Many of the LIV golfers, such as Dustin Johnson, resigned their PGA Tour memberships.

The PGA Tour has said it believes those rules are appropriate, and legal. People familiar with the Tour’s thinking expect the Tour to say that its arrangement with players is akin to similar agreements that are ubiquitous across the economy.

LIV Golf had been preparing to bring an antitrust challenge against the PGA Tour, even before it launched, arguing that the PGA Tour has monopoly power in the golf market and is using that power to try to exclude an upstart challenger, by trying to restrict or drive up the price of LIV’s access to players.

The complaint and application for a temporary restraining order were filed in the US District Court for the Northern District of California. Ian Poulter, Abraham Ancer, Carlos Ortiz, Pat Perez, Jason Kokrak and Peter Uihlein round out the golfers putting their names to the suit, arguing that the PGA Tour is trying to hurt their careers.

“The Tour’s conduct serves no purpose other than to cause harm to players and foreclose the entry of the first meaningful competitive threat the Tour has faced in decades,” they say.

In their motion for a temporary restraining order, Gooch, Swafford and Jones say they appealed to the PGA Tour to be allowed to play in the playoffs, and that under Tour rules they should be allowed to play in the playoffs while their appeals are heard. It adds that the Tour violated its own disciplinary process when it told the players this week they wouldn’t be permitted to play while the appeals are pending.

“The purpose of this action is to strike down the PGA Tour’s anticompetitive rules and practices that prevent these independent-contractor golfers from playing when and where they choose,” that motion says.

The LIV players’ lawyers also cite the Tour’s efforts with the European tour and the PGA Tour’s alleged efforts to coordinate with the major championships as evidence that the body is acting unlawfully to cut off the players’ access to the golf ecosystem.

The lawsuit also provides new details about Mickelson’s status on Tour, which had been the subject of significant intrigue after he ceased playing in the wake of controversial comments regarding Saudi Arabia’s record on human rights that were published earlier this year. The lawsuit says Mickelson was suspended by the PGA Tour back in March for allegedly recruiting players to play for LIV, among other reasons, and that his appeal was denied. When he applied for reinstatement in June, the suit says, the Tour denied it based on his participation in the first LIV event that month outside London. It said he was forbidden from applying for reinstatement until March 2023, which was extended until March 2024 after he played the second LIV event.

The FedEx Cup Playoffs caps the PGA Tour’s season with a series of events that feature increasing hype—and increasingly small fields—culminating with the Tour Championship. The FedEx Cup is also a season-long event in which players accumulate points based on their play, and the top points-getters land lucrative payouts. The top finisher in the FedEx Cup, currently world No. 1 Scottie Scheffler, is in line for an $18 million prize.

The perks of playing in the playoffs are significant. The prizes and bonus money are large. Strong performances can qualify players for major championships. They are also some of the Tour’s highest-profile events that draw attention to the golfers and, along with that, big branding opportunities.

Under the current rules, the top 125 players are invited to the first event of the FedEx Cup playoffs, the St. Jude Championship that begins next week. Then 70 make the BMW Championship before a slim field of 30 competes for the Tour Championship.

But the LIV Golf defections led to questions about how those fields would be managed when players in the top 125 included LIV defectors who had been suspended. To address the issue, the PGA Tour modified its protocols recently to allow players from outside the top-125 to move up and take the spots of the players who had departed.

The lawsuit filed by the golfers means that the PGA Tour is now facing legal battles over its practices on multiple fronts. In addition to this lawsuit, the Justice Department has launched an antitrust investigation into whether the Tour has engaged in anticompetitive behavior, The Wall Street Journal first reported.

The Tour, however, has already begun fighting back, commanding support on Capitol Hill from lawmakers in both parties suspicious of LIV’s Saudi backers. It has previously said that it expects to prevail in the Justice Department inquiry, noting that it faced a similar inquiry in the mid-1990s from the Federal Trade Commission and quashed that with striking political backing.

“We welcome good, healthy competition. The LIV Saudi Golf League is not that. It’s an irrational threat; one not concerned with the return on investment or true growth of the game,” PGA Tour commissioner Jay Monahan has said.

“If this is an arms race and if the only weapons here are dollar bills, the PGA Tour can’t compete. The PGA Tour, an American institution, can’t compete with a foreign monarchy that is spending billions of dollars in an attempt to buy the game of golf.”

The PGA Tour is expected to respond to the LIV golfers’ pursuit of an injunction by arguing that the players do not face a real emergency; have known about the situation for some time; should not be rewarded for filing at the last minute; and that letting them in would mean other players lose out, according to people familiar with the Tour’s thinking.

The Tour will also say that they don’t have the right to play the FedEx Cup under the rules that they had previously agreed to after violating those bylaws by playing for LIV.

On the antitrust arguments more broadly, it is likely to argue that LIV and its golfers are seeking to “free ride” on value created by the collective efforts of participants in the Tour and that the Tour does not have to cooperate with a competitor, the people said.

They could also argue that LIV is acting in a predatory fashion, seeking to harm the Tour to the detriment of all the players who don’t get big contracts with LIV, maybe with the ultimate goal of hobbling the Tour so that it could be taken over by the Saudi Public Investment Fund.

This lawsuit is the first in the US that has pitted the two sides against one another, but LIV players had previously secured a favorable outcome in Europe.

A handful of players successfully won a stay on their suspensions from the Genesis Scottish Open, which is co-sanctioned by the PGA and European tours. Days before the event, a judge hearing the golfers’ complaint through a dispute resolution service said those bans should be temporarily enjoined.

Write to Louise Radnofsky at [email protected] and Andrew Beaton at [email protected]