The PGA Tour and the Saudi backers of LIV Golf have made a significant change to their agreement in response to a recent inquiry from the Justice Department. The provision that would have prohibited the poaching of players has been dropped, according to the PGA Tour’s announcement on Thursday.
This development follows the antitrust review conducted by the Justice Department, which began in the summer and gained momentum when the PGA Tour and Saudi Arabia’s national wealth fund established a business partnership.
The non-solicitation clause, previously included in the framework agreement announced on June 6 and signed by the PGA Tour, European tour, and Public Investment Fund, has been removed. The agreement itself is still under negotiation and requires approval from the PGA Tour board. It aims to establish a for-profit company that consolidates commercial businesses and rights. During a recent Senate hearing, Ron Price, Chief Operating Officer of the PGA Tour, disclosed that PIF would contribute a minimum of $1 billion.
A crucial aspect of the agreement was the discontinuation of all antitrust litigation, which was approved by a federal judge last month. This was followed by the non-solicitation clause, which stated that PIF, the PGA Tour, and European tour would no longer engage in efforts to “solicit or recruit any players who are members of the other tours or organizations to become members of their respective organizations.”
The effective date of this clause was May 30, coinciding with the signing of the agreement.
PGA Tour Removes Specific Language from the Framework Agreement
The PGA Tour has decided to remove specific language from the Framework Agreement after discussions with staff at the Department of Justice. In a statement, the PGA Tour stated that while they believe the language is lawful, they consider it unnecessary in the spirit of cooperation as all parties are negotiating in good faith.
Last year, LIV Golf signed deals reported to be $100 million or more, attracting marquee names such as Brooks Koepka, Dustin Johnson, Phil Mickelson, and Bryson DeChambeau. The rival league further bolstered its roster in August by adding players like British Open champion Cameron Smith after the PGA Tour season concluded.
For their second season, LIV Golf has managed to attract a new batch of defectors, including Mito Pereira, Thomas Pieters, and Brendan Steele.
According to antitrust experts cited by The Times, the clause in the agreement could potentially violate federal law if it undermines the integrity of the labor market and hampers competition for the independent players.
The finalization of the deal is expected to take place by December 31st, although both sides have the option to agree on an extension if necessary.
As LIV Golf has already established a set 48-man roster for this season, with available alternates for injuries, it is unlikely that any player would consider leaving for LIV until the 2024 season.
The future of LIV Golf remains uncertain and under deliberation.
PGA Tour Commissioner Jay Monahan is set to become the CEO of the new company, which includes LIV Golf as one of its assets. The agreement outlines that the company will objectively evaluate LIV Golf and assess its prospects and potential, taking into account the benefits of team golf in good faith.