LIV Golf (Saudi PIF), "Mergers," and More

[DaveP043]

39 minutes ago, GolfLug said:

I hope I am not digressing too much on this thread but also interested how in the world could the court rule in favor of LIV that is supported by the Saudis, who by all indications can be considered a state that sponsors terrorism. Can that aspect alone supersede any other arguments in favor of LIV?  

My guess is that LIV would not be the one filing suit, its individual players against the PGA Tour.  I have limited sympathy, when these guys are leaving school they want nothing more than to become a member of the "club", because membership in that club gives them the best opportunity to make a lot of money.  In return for that opportunity, they voluntarily agree to give up some of their freedom, they agree to abide by the rules of the PGA Tour.  Now they've used that opportunity to become professionally and financially successful, they want their freedom back, but still want the opportunities that the club provides.  That's certainly not a legal argument, its just the way i think of it.  If they want their freedom, fine, but they should give up their membership in the club if they don't like the club's rules.

[GolfLug]

46 minutes ago, DaveP043 said:

My guess is that LIV would not be the one filing suit, its individual players against the PGA Tour.  

Yes, but it benefits LIV squarely while hurting PGAT equivalently hence, I would be surprised if LIV's Saudi connection would not have substantial consideration in the decision making.   

Anyway, the players still have freedom to their livelihood via LIV if they choose too. I don't see how they can demand livelihood from two different organization as a fundamental right concurrently. Not sure if the constitution covers that.  

46 minutes ago, DaveP043 said:

That's certainly not a legal argument, its just the way i think of it.  

Right..,

46 minutes ago, DaveP043 said:

 If they want their freedom, fine, 

right..,

46 minutes ago, DaveP043 said:

but they should give up their membership in the club if they don't like the club's rules.

and right.

Edited May 12, 2022 by GolfLug

[jmanbooyaa]

Besides the legality of it all. When do we find out which players will be playing? The names that are being floated around are not impressive. Well maybe 5-10 years ago. It all seems like a tour for the almost eligible for the Champions tour. 

[turtleback]

It will be interesting to see the fan reaction to Mickelson if he plays the PGA.

[jbishop15]

the nolayingup guys did a podcast with alan shipnuck about the whole phil thing that I thought was interesting re: phil and his Stuff

im with dave on the "if you dont like the rules, don't be a member of the club" thing. i think the existence of the saudi golf league and the Dude Perfect World Tour and the Asian Tour, etc make it difficult for them to argue that the PGA Tour is violating anti-trust laws 

[mdl]

3 hours ago, DaveP043 said:

My guess is that LIV would not be the one filing suit, its individual players against the PGA Tour.  I have limited sympathy, when these guys are leaving school they want nothing more than to become a member of the "club", because membership in that club gives them the best opportunity to make a lot of money.  In return for that opportunity, they voluntarily agree to give up some of their freedom, they agree to abide by the rules of the PGA Tour.  Now they've used that opportunity to become professionally and financially successful, they want their freedom back, but still want the opportunities that the club provides.  That's certainly not a legal argument, its just the way i think of it.  If they want their freedom, fine, but they should give up their membership in the club if they don't like the club's rules.

So monopsonies should generally be free to prevent any other buyer entering a market because... their suppliers have earned a lot of money?

[Vinsk]

24 minutes ago, mdl said:

o monopsonies should generally be free to prevent any other buyer entering a market

They’re not preventing anything. The other buyer is up and running. 

[saevel25]

28 minutes ago, mdl said:

So monopsonies should generally be free to prevent any other buyer entering a market because... their suppliers have earned a lot of money?

Note, they are not preventing LIV or any other tour from starting up. PGA Tour players have to make a choice. Play on the PGA Tour or play on this other tour. 

I have a choice, work for this company, or work for another company. 

Free Markets are not about freedom for employees to do what ever the hell they want. 

 

[DaveP043]

33 minutes ago, mdl said:

So monopsonies should generally be free to prevent any other buyer entering a market because... their suppliers have earned a lot of money?

The flip side of this, should the PGA Tour NOT be allowed to enforce the agreement it has between itself and the individual players?   The player's have to request a release to play in an event that conflicts with a PGA Tour event.  The Tour may decline to grant that release.  If the player chooses to play in the conflicting event without the release, the player can face discipline.  That's his choice. 

Consider yourself as an independent contractor, going into the office one day and saying "I won't be here next week, I'm doing some work for your competitor."  Would the original company be within its rights to terminate your contract?  Possibly, depending on the agreement you have with that company.

[DeadMan]

Wonder how team uniforms (aka no personal sponsors) will go over?

[iacas]

15 hours ago, DeadMan said:

They have probably just done that by not releasing players for the event in London. There is a Supreme Court case that is a strong fit for the facts here. it's Lorain Journal v. US:

Lorain Journal Co. v. United States - Wikipedia

What happened there was that a newspaper that had a monopoly in a town. A radio station started, but the newspaper refused to advertise with anyone who was also advertising with the radio station. The Supreme Court found that this violated US antitrust laws. That case is a very strong fit for here. The PGA Tour is saying, or will be saying, that you if you play for a competing tour, you can no longer play with us. Very similar to that case. 

That doesn't mean any case against the PGA Tour would be a slam dunk, though. The biggest hurdle may be defining the market. In that case, the market was a town. Here, is the market US professional golf tours (where the PGA Tour undoubtedly has a monopoly)? Or is it worldwide (may be a tougher sell with the European Tour and others)?

Also, a lot of things are anti-competitive but legal. Non-compete clauses in employment contracts are anti-competitive, but usually not illegal under antitrust law.

Bottom line, it's complicated, but the PGA Tour might have a problem here.

IASNAL (S = "still"), but this doesn't feel the same, because the contractors (the players) willingly joined the membership and are making a choice of their own to violate the terms of the membership.

The advertisers don't feel the same to me.

6 minutes ago, DeadMan said:

Wonder how team uniforms (aka no personal sponsors) will go over?

SGS made the point that Sergio acts like he doesn't like having a boss, etc. and yet he may not know what he's getting into with the LIV shit. I think for their many-$M they're going to place a lot of demands on players.

[mdl]

1 hour ago, Vinsk said:

They’re not preventing anything. The other buyer is up and running. 

1 hour ago, saevel25 said:

Note, they are not preventing LIV or any other tour from starting up. PGA Tour players have to make a choice. Play on the PGA Tour or play on this other tour. 

I have a choice, work for this company, or work for another company. 

Free Markets are not about freedom for employees to do what ever the hell they want.

I apologize. I totally worded my comment incorrectly. I didn't meant that the monopsony is (or can) preventing other buyers (as in, other tours) entering the market. I meant that the monopsony is preventing their suppliers (in this case PGA players selling their services to the tour) from selling to any other buyers. There is no other contractor business where that would be acceptable.

 

1 hour ago, DaveP043 said:

Consider yourself as an independent contractor, going into the office one day and saying "I won't be here next week, I'm doing some work for your competitor."  Would the original company be within its rights to terminate your contract?  Possibly, depending on the agreement you have with that company.

But that's not what's happening. PGA tour players aren't full time employees nor contractors with a contract committing them to full time. They've entered into an agreement with a buyer to supply at least 15 tournament appearances per year. They can choose (almost) any 15 weeks a year.

As I understand it, non-competes in contracts are either illegal (e.g. California) or reclassify you as an employee rather than a contractor. So the PGA can't have it both ways. They can't have no responsibility for players and not let them sell their services elsewhere.

Just to be clear, the Saudi leadership is backwards and evil, and Norman has for a long time clearly been a deeply bad person. So in this case I emotionally support the PGA giving a big middle finger to LIV and Norman. And also selfishly I'd rather there not be a bunch of competing tours just because as a fan the fields would be thinned out and less fun to watch. But in principle I definitely don't think they're right.

[iacas]

28 minutes ago, mdl said:

As I understand it, non-competes in contracts are either illegal (e.g. California) or reclassify you as an employee rather than a contractor. So the PGA can't have it both ways. They can't have no responsibility for players and not let them sell their services elsewhere.

The PGA Tour doesn't have a true "non-compete."

[jmanbooyaa]

How i am seeing this is the liv is a slow burn. Start out with names past their primes and move to grab the next new great players before they go to pga. 

[turtleback]

3 hours ago, mdl said:

But that's not what's happening. PGA tour players aren't full time employees nor contractors with a contract committing them to full time. They've entered into an agreement with a buyer to supply at least 15 tournament appearances per year. They can choose (almost) any 15 weeks a year.

 

But the contract is an exclusive agreement.  Are exclusive agreements no longer OK?  Can a streaming service make an exclusive agreement to stream a particular movie but then be in violation of antitrust laws when it refuses to allow the movie to be streamed on a competing streaming service?

[saevel25]

4 hours ago, mdl said:

I apologize. I totally worded my comment incorrectly. I didn't meant that the monopsony is (or can) preventing other buyers (as in, other tours) entering the market. I meant that the monopsony is preventing their suppliers (in this case PGA players selling their services to the tour) from selling to any other buyers. There is no other contractor business where that would be acceptable.

I would say, that is not correct. 

There are plenty of exclusive contracts out there for people who are in legal terms, independent contractors. 

I understand form the stand point of an engineering business, where there isn't an exclusivity because they have hundreds of employees to spread across multiple agencies or other businesses who are contracting them out. 

Still, participation in the PGA is agreeing to their terms of service, which means they need a waiver to do these sort of things. If they didn't want to do this, they could quit the PGA Tour and join another tour. Still, is there any financial consequences if a PGA Tour player quits the PGA Tour? If not, then there is not real preventative measures the PGA Tour has to stop players from quitting and joining an alternative tour. 

I just do not see this as monopolistic. 

 

[Troy Ocker]

The discussion should be about sportswashing though, not about the legallity of denying players PGA rights for joining LIV. It is a case of total lack of ethics and moral, and any player who joins the LIV-tour should have a serious look in the mirror and ask themselves if this is the person they want to be. They will be openly be taking money to defend one of the worst dictatorships in the world today and help them polish their public image in the west. 

This is a country who enforces death penalty or long prison sentences for openly critizicing the regime and Islam, for infidelity, for any sex outside of marriage (even if you've been raped), for being gay etc. There is no freedom of speach, no freedom of religion, no elections, women are being heavily discriminated and they have zero respect for the most basic human rights instituted by the UN. Before they imply real change to how they run their country, anyone taking money to help them wash their image deserves all the bad they get. 

How anyone can support a players choice of joining that league is beyond me. Normann's latest comments regarding Kashoggi is just totally shocking and shows a greedy man with zero moral compass and no brains who would do absolutely anything for money. A lifetime ban from the PGA-tour is going too easy on them if you ask me. 

I wouldn't take money from any other dictatorship or tyranny either.  

Sorry for the harsh post. I just can't sit back and watch the world take big steps backwards like this, and sportswashing just helps totalitarian regimes hold on to their power in countries that desperately needs change and a different path forward...

[mdl]

18 hours ago, iacas said:

The PGA Tour doesn't have a true "non-compete."

I know, but they have a not universally enforced de facto one, so it seemed like the right framing.

15 hours ago, turtleback said:

But the contract is an exclusive agreement.  Are exclusive agreements no longer OK?  Can a streaming service make an exclusive agreement to stream a particular movie but then be in violation of antitrust laws when it refuses to allow the movie to be streamed on a competing streaming service?

Streaming contracts are between studios and streaming/cable companies. The streaming/cable industry is highly concentrated, but not a monopsony. As in, a studio has a reasonable number of different companies to get bids from. If there were a single streaming company and a new entrant attempted to come in and the single existing streaming company told every studio and producer that if they ever sold content to the new entrant they'd be permanently banned from the single existing streamer, that would absolutely not be okay.

15 hours ago, saevel25 said:

I would say, that is not correct. 

There are plenty of exclusive contracts out there for people who are in legal terms, independent contractors. 

I understand form the stand point of an engineering business, where there isn't an exclusivity because they have hundreds of employees to spread across multiple agencies or other businesses who are contracting them out. 

Still, participation in the PGA is agreeing to their terms of service, which means they need a waiver to do these sort of things. If they didn't want to do this, they could quit the PGA Tour and join another tour. Still, is there any financial consequences if a PGA Tour player quits the PGA Tour? If not, then there is not real preventative measures the PGA Tour has to stop players from quitting and joining an alternative tour. 

I just do not see this as monopolistic. 

 

I also know this stuff best from a digital/engineering point of view. I'd say the difference is that there is an incredibly broad market there. If a contractor doesn't like working with a company or feel they could get a better deal elsewhere, they have a massive number of other companies to try to get a better deal/gig with.

PGA tour players have literally zero other choices (at least on the same continent). You say they could join another tour. What tour? Sure they could move to Europe and try to get status on the DP tour. In North America, there is no existing alternative. Any upstart tour is highly likely to fail (either as a business that needs to produce enough revenue, or the backing dictator getting bored or deciding their sportswashing isn't working). The preventative measure the PGA tour takes is banning a player from what is highly likely to be the only place a player can make money 3-5 years out. That seems very close to the definition of monopsony to me.