Joe Biden’s Justice Department in Saudi Arabia investigating PGA tour – Sportico.com
As President Joe Biden arrives in Saudi Arabia on Friday for sensitive talks with Saudi leaders, his Justice Department takes aim at the rocky relationship between Saudi-backed LIV Golf and the PGA Tour. The move could make it easier for golfers to pursue the tour and potentially facilitate talks between country leaders.
As reported by The Wall Street Journal, the Department of Justice is investigating whether touring policies violate antitrust law by preventing golfers from playing for LIV. Last month, the tour suspended 17 golfers who, by attending LIV’s first event, breached their membership obligations. The DOJ has questioned the players’ agents as it investigates the controversy.
In May, Sportico raised the possibility of the DOJ looking into the antitrust implications of touring trips, especially as the DOJ has become more alert to employers limiting workers’ economic opportunities.
The potential antitrust issue is that of monopsony, whether the PGA Tour enjoys excessive control over the purchase of the services of elite golfers. Antitrust law is primarily driven by consumer interests. Consumers, especially golf fans, could be better off watching the world’s best golfers compete freely on the Tour, LIV and other leagues.
Politically, the moment is hard to ignore. The public learned of the DOJ investigation just days before Biden met with Saudi King Salman bin Abdulaziz and his leadership team, including Crown Prince Mohammed bin Salman, whom Biden has exposed for the murder of Washington Post writer Jamal Khashoggi. The leaders’ agenda is expected to include human rights, oil, national security and other hot topics. The DOJ’s golf probe, meanwhile, is a decidedly positive development for Saudi backers of LIV.
The DOJ investigation could have significant legal implications.
First, the DOJ could uncover evidence and make findings that improve a golfer’s chances in court. So far, no golfer has sued the PGA Tour. That could change. The Tour, one golfer might say, violated antitrust law or, by withholding clearances, misapplied its own rules.
Second, the probe could disrupt the tour, causing him to make strategic mistakes. The sports world has seen this before. Last year, the NCAA decided to adopt the NIL rules after receiving a threatening letter from the DOJ. The agency was concerned about the relationship between antitrust law and NCAA plans to restrict NIL. The development disrupted the NCAA’s NIL playbook. He turned to lobbying – unsuccessfully – Congress for a federal NIL law with an antitrust exemption. As Congress waned and state NIL statutes approached, the NCAA hastily adopted an interim NIL policy that critics consider ineffective.
Third, the DOJ could continue the tour or, under threat of litigation, force changes. The agency isn’t shy about suing companies for antitrust allegations. He sometimes chooses high-profile targets, such as Google or Facebook, knowing that it will attract public attention. Antitrust cases can take years, generate significant legal costs and require the hiring of expensive experts. Violations of antitrust laws can result in “triple” damages, that is, actual damages automatically multiplied by three.
While the DOJ probe is noteworthy, it is not necessarily consequential.
The PGA Tour was the subject of a Federal Trade Commission investigation in the 1990s regarding rules limiting player competition – an investigation that came and went without action. The tour is also armed with a host of defenses against claims of antitrust wrongdoing. They include: golfers have voluntarily agreed to follow the rules of the tour; the courts granting private associations latitude in applying the rules; and the argument that the Tour’s competition system is arguably pro-consumer and pro-golfer, as it is popular with fans and lucrative for golfers.