The Golf War Rages On With Fresh Defections And New Escalations
2:44 PM EDT on August 30, 2022
Last week the PGA Tour announced a number of significant changes to its pay structure and annual schedule, fundamentally altering the organizer's relationship with its members going forward. The effort, spurred by a meeting of a group of the PGA Tour's best players, is designed explicitly to help the embattled organizer hold onto its most prominent stars, who are being aggressively courted by the new Saudi-funded LIV Golf tour, which can afford to hand out massive upfront payments without any immediate regard for profitability. For the 20 players who participated in the players-only meeting that prompted the restructuring, elevated events, increased purses, guaranteed minimum earnings, and a wacky new primetime product make the PGA Tour an attractive alternative to the comparative obscurity of LIV Golf, even with those eye-popping payouts.
Unfortunately for the PGA Tour, not all of its top pros participated in the meeting, and the improvements the PGA Tour announced were evidently not enough to change some pretty important minds. LIV Golf officially announced Tuesday morning what many had long suspected: Cameron Smith of Australia, a popular guy and the second-ranked player in the world, will headline a group of six PGA Tour pros who are leaving for the instant life-changing wealth, wacky team format, and ridiculous boom-chicka ambiance of LIV Golf.
Smith reportedly will collect $100 million from LIV Golf, although it's still not super clear how much of that is considered a signing bonus and how much is considered an advance on future earnings: A LIV lawyer said in court, during an ongoing antitrust suit filed by a group of LIV pros against the PGA Tour, that tournament prize money is "recouped against the LIV contracts," which directly contradicts the explicit words of a LIV spokesperson during a news conference earlier in the summer. The Wall Street Journal got ahold of a draft LIV Golf contract in mid-August, and though there was lots of unusual stuff in there about mandatory wearing of LIV merchandise and restrictions on doing interviews without tour approval, the report did not clear up the question of which official LIV Golf representative has their facts straight about those eye-popping, nine-figure upfront payments.
Speaking of the antitrust lawsuit: Four of the 11 LIV Golf players named as plaintiffs in the initial complaint have now removed their names from the lawsuit, after Abraham Ancer and Jason Kokrak dropped out of the complaint sometime before an amended complaint was filed Friday. Far from signaling an anticlimactic conclusion to this effort to force access for LIV Golf professionals to PGA Tour events, the recent filing in fact represents an escalation: As reported by Golf Digest, LIV Golf has now officially entered the suit, filing as an interested party Friday and asking the court for "punitive damages for the PGA Tour’s bad faith and egregious interference with LIV Golf’s contractual and prospective business relationships." The amended complaint zeroes in on the effects of the PGA Tour suspending the memberships of players who jump ship:
The Tour's restraints have harmed LIV Golf by, for example, raising to supracompetitive levels its costs to recruit players who are subject to the Tour's threats; completely preventing LIV Golf from securing the services of many players who have been subjected to the Tour's threats of severe punishment should they participate in LIV Golf events; forcing LIV Golf to scrap its launch plans for 2022, and instead launch a smaller-scale series; and preventing LIV Golf from entering into agreements with third parties and raising to supracompetitive levels its costs for contracting with those third parties who are willing to defy the Tour's threats, thus raising LIV Golf's costs and degrading its product offerings. The impacts of the Tour's continuing restraints threaten LIV Golf's competitive viability and existence.
I continue to find it grimly funny that a business operated by the investment fund of an infinitely oil-rich authoritarian monarchy could offer almost a billion dollars in upfront money to 46-year-old Tiger Woods to essentially serve as their mascot, and then turn around and say with a straight face that its viability and existence is meaningfully threatened by restrictions on who is allowed to participate in its competitor's events. Fortunately for LIV Golf and Cameron Smith, finances are not yet so dire for the Saudi royal family that they could not afford to lavish the Aussie with a sweet nine-figure payday to come join Team Smush or whatever. The incredibly humongous amended complaint is below, if that's your kind of thing.
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