Is the great freedom of playing LIV a mirage? ANDREW BEATON writes that contracts include a range of restrictions and measures to promote and recruit for the Saudi-backed golf upstart.
When lawyers for the PGA Tour and LIV Golf players sparred during a high-profile court hearing last week, they carefully sidestepped one of the most critical topics: details of the players’ contracts with LIV.
The contracts LIV Golf has used to lure players away from the Tour have remained hidden from public view. The deals for some LIV players were submitted under seal for a hearing last week in which three golfers unsuccessfully sought a restraining order that would have allowed them to play in the FedEx Cup Playoffs despite their suspensions from the PGA Tour. Lawyers and even the judge alluded to the contract terms, although in ways that did not explicitly reveal them.
The mystery could be resolved this week, when a federal court judge is expected to rule on a motion by the Tour to unseal those contracts.
However, The Wall Street Journal has reviewed a draft contract that LIV has offered players. The terms shed new light on both the courtroom battle and the requirements that players agreed to when they signed on with the Saudi-backed upstart. It is not clear whether such terms are included in all LIV contracts or can be negotiated by individual players.
The contract includes a number of unusual provisions. Players are supposed to wear LIV apparel, even when playing in non-LIV events. They are instructed to refrain from giving interviews without approval. They agree to assist in recruiting other players to LIV, when requested. And they also need approval for most of the logos they wear and branded products, “like coffee mugs,” that they use at events.
In addition to the rich prize money offered at the LIV events, the contract has one other surprising provision: the golfers are awarded a $1 million bonus for winning any of golf’s four major championships.
The deal reviewed by The Journal did not include language about the lucrative appearance fees that some players have received, which people familiar with the matter said was included as a separate rider specific to those golfers.
“LIV Golf, as a start-up, is proud to offer our golfers competitive contracts,” a LIV spokesperson said in a statement. “Our future is bright and we continue to be excited by the player and fan response.”
LIV, backed by Saudi Arabia’s sovereign-wealth fund, has up-ended professional golf this year by luring big-name golfers with lavish paydays. The PGA Tour, which did not grant permission to players to participate in the rival series, has suspended the golfers who have bolted, and a number of players who signed on with LIV have resigned their Tour memberships. Phil Mickelson, Dustin Johnson, Bryson DeChambeau and Patrick Reed are among the stars who have signed on.
That has led to a schism in the sport, and it’s an increasingly legal one. The Justice Department is investigating the PGA Tour for potential antitrust violations. Then, earlier this month, Mickelson and 10 other LIV players sued the Tour over their suspensions. Three of those golfers, including Talor Gooch, filed for a restraining order that would have allowed them to compete in the playoffs that began last weekend. A judge denied the request in an early courtroom win for the Tour.
The hearing began with the PGA Tour arguing that the contracts should be unsealed, while the lawyer for the LIV players, Rob Walters, said they were highly sensitive and proprietary. Still, some elements of the contracts were alluded to during the hearing in the Northern District of California.
After Walters pointed out the financial windfall available in the FedEx Cup playoffs, the attorney representing the Tour vaguely juxtaposed that to what Gooch received for just agreeing to join LIV, noting he wanted to pick his words “carefully” because those contracts were sealed.
“In my mind, I was comparing that to what Mr. Gooch received for merely signing a contract,” Elliot Peters, the PGA Tour’s lawyer, said in the hearing. “And the court knows what that is.”
“I do,” Judge Beth Labson Freeman responded.
During another exchange, Peters argued that if the trio were allowed to participate in the playoffs, it would be unfair to the PGA Tour because it would essentially provide a stage for its competitor to advertise itself. That’s when he noted the players “have an obligation under their LIV contracts [to] wear LIV stuff.”
Later, Walters said that was incorrect.
“On that uniform issue, that’s just all wrong, okay, they don’t show up in their LIV gear,” he said. When the judge pressed on whether they would wear LIV gear to the playoffs if she granted the injunction, Walters responded: “Absolutely not.”
The players’ apparel requirements are noted multiple times throughout the contract reviewed by The Journal. It says during any “League Activity, Team Promotional Activity or any other Covered Golf Activity” the player shall only wear appropriate “Team Apparel” and not display badges or logos without obtaining approval. There is an exception that the player can wear the brand of a third-party supplier of golf equipment on the right side of their hat. The contract also said that during events the player is to “refrain from using or otherwise appearing with or using any product (eg, any hard goods like a coffee mug) containing a logo without approval.”
Later, the contract more specifically indicates that the players are supposed to wear LIV gear at any tournament.
“The Player agrees to wear LIV Golf branding (or other branding supplied by the League Operator) at each Tournament and each other golf tournament you participate in anywhere in the world,” it states.
At last month’s British Open, where LIV golfers were allowed to participate because it is overseen by the R & A, most did not appear to wear LIV paraphernalia. The exception was Patrick Reed, who wore several LIV Golf logos.
A person familiar with LIV’s thinking said the language was aimed towards next season and beyond, when the circuit’s teams will be more firmly established, and that players may wear gear promoting their teams like they would any other sponsor.
Later, the contract more specifically indicates that the players are supposed to wear LIV gear at any tournament.
“The Player agrees to wear LIV Golf branding (or other branding supplied by the League Operator) at each Tournament and each other golf tournament you participate in anywhere in the world,” it states.
Another provision requires players to agree to refrain from “providing exclusive interviews or commentaries or entering into any agreements or arrangements involving exclusive interviews” in relation to any “Event or League Activity” without obtaining approval.
Another clause turns the players into LIV’s recruiters. The contract says the player agrees to “where requested, assist the League Operator in seeking to persuade players to enter into multiyear player participation agreements with the League Operator.”
Other elements of the contract aren’t too dissimilar from player arrangements with the PGA Tour. The deal is structured with the players as independent contractors. They also broadly sign away their media rights from LIV events.
LIV gives players both more and less flexibility in terms of their appearances and schedule. LIV players are permitted to play in non-LIV events, provided that they do not conflict with LIV events, while PGA Tour players have to request a release to compete in conflicting non-Tour events.
But the contract is also more rigid in a way. PGA Tour players have to play in 15 events to be in compliance with the membership organization’s rules, yet they can pick and choose among dozens of tournaments spread across the calendar. The LIV contract requires a player to participate in all of its events, which will increase to a total of 14 in 2023.
– The Wall Street Journal
.