Has the PGA Tour driven into the rough?
LIV Golf has taken the golfing world by storm by radically modernising one of the world’s most conservative sports, Golf. However, this vanguard movement, spearheaded by Australia’s own Greg Norman, has wedged apart golf institutions and the golf community.
LIV Golf poses a significant threat to the product of the PGA Tour, having already poached some of, if not most of, the world’s best male golfers. The lure of never-before-seen salaries upwards of $100 million has proven too great for golfers like Australia’s own Cameron Smith, and golfing greats Sergio Garcia and Dustin Johnson.
This threat led the PGA Tour to suspend those golfers who chose to participate in LIV Golf’s inaugural event in London, in June 2022. These suspensions, in turn, led to the ongoing dispute between PGA Tour and LIV Golf, which raises interesting issues of competition law in sports.
The relevant competition law issue is anti-competitive conduct, which is an issue in sport on the field and in the administrative sphere.
The initial competitive concern
One of the complaints levelled at the PGA in LIV Golf’s submissions filed in August 2022 regarded conflicting event regulations, whereby the PGA grants and denies players permission to compete in non-PGA events.
The issue with the application of the conflicting event regulations in this context, according to Amman Alrefaei , is that ‘the application of the rule is anti-competitive in nature because, while denying a release requested by players for LIV Golf events, [the PGA] granted such releases for other tournaments’. The players, who were party to this action alongside LIV Golf, claim that this is because LIV Golf is seen as a competitive threat in the golfing market, which competition law should seek to protect.
According to the Court in Re Queensland Co-op Milling Association Ltd and Defiance Holdings Limited (1976) 8 ALR 481, ‘[a] market is the area of close competition between firms or ... the field of rivalry between them’. These suspensions may indeed threaten competition in the field of rivalry between PGA and LIV.
However, the dispute has evolved from a battle between golfers, LIV Golf and the PGA into what looks likely to become a long and protracted dispute which is now stuck in a spiral of discovery appeals and has a hearing date of May 2024. Jodi Balsam, sports law professor at Brooklyn Law School, believes that delay strategies will see this date postponed further.
How might this play out in the Australian context?
Under Australian competition law, the inconsistency in the application of conflicting event regulations may invoke section 45(1)(b) of the Competition and Consumer Act 2010 (Cth) which prohibits corporations from giving ‘effect to a provision of a contract, arrangement or understanding, if that provision has the purpose, or has or is likely to have the effect, of substantially lessening competition’.
Pursuant to the ACCC, competition will be substantially lessened when, as a result of a business’ behaviour, competitors are restricted from competing effectively or it would be very hard for a new business to set up and start competing.
The suspended golfers and LIV Golf may argue that the PGA has created an understanding that golfers are not able to compete in both LIV and PGA events, which consequently has the effect of lessening the capacity of LIV Golf to attract high quality golfers and compete effectively with the PGA in breach of s45(1)(b).
Below are some links if you wish to know more on the issue:
Sports law Professor Jodi Balsam’s interview on the state of the proceedings as (13/05/23): https://www.youtube.com/watch?v=DJ30Ar9-WNg
Ammar Alrefaei S. J. D article, ‘LIV Golf and PGA Tour: Reinvigorated Issue of Antitrust in Sport’: https://www.researchgate.net/publication/368444654_LIV_Golf_and_PGA_Tour_Reinvig orated_Issue_of_Antitrust_in_Sport
ESPN article, ‘Judge pushes trial date for LIV suit vs. PGA back several months’: https://www.espn.com.au/golf/story/_/id/36109099/judge-pushes-trial-date-liv-lawsuit-vs- pga-back-several-months