The PGA Tour and LIV Golf Announce Shocking Merger Amid Tense Legal Battle

This past Tuesday, June 6, the PGA Tour, DP World Tour, and LIV Golf announced that they agreed to a merger.[1] The agreement combines the commercial entities into a new company.[2] The merger shocked the golf world, as the companies have been at odds since LIV Golf was officially announced in October 2021.[3]

LIV Golf was launched on the notion that it was an alternative professional golf league that would compete with the PGA Tour.[4] From the outset, LIV offered eight-to-nine figure payouts to prominent PGA players to draw them to the new organization.[5] Many players wanted to join LIV for the bigger paydays throughout the year, only to return to play in major tournaments and the FedEx Cup Championship.[6] Soon after, the PGA released a statement that said players who defected to LIV would have their PGA membership revoked, and they would not be allowed to participate in any PGA events.[7]

The newly signed LIV players were unhappy with the PGA’s decision, and a group of players even brought an antitrust suit against the PGA in early August 2022.[8] LIV Golf had joined this lawsuit by the end of the month.[9] In the latter stages of 2022, the PGA launched a countersuit against LIV Golf for tortious interference.[10] Saudi Arabia’s Public Investment Fund (PIF), which provided funding for LIV Golf, and its chairperson, Yasir Al-Rumayyan, were added to the suit as well.[11] The merger contains an agreement that will end all legal disputes between the two entities.[12] It is possible that the main reason for the merger was to avoid the mounting legal costs the battle was sure to impose.[13] Further, the merger set a plan into motion that will allow for the reinstatement of all members of LIV Golf who were PGA members.[14]

Widespread criticism came to LIV Golf due its backing by the Saudi Arabian government, which has a disturbing history of violating human rights.[15] Many critics have taken aim at those who chose to do business with LIV Golf, claiming that they are disregarding these violations.[16] This criticism was even made by the PGA in its lawsuit. It claimed that LIV Golf was part of a “sportswashing” effort by the PIF.[17] Sportswashing is depicted as PIF attempting to clean up Saudi Arabia’s image by investing in different sports initiatives.[18] PGA Commissioner Jay Monahan even stated that association with the “Saudi fund would leave a moral stain.”[19] The words of the PGA are being thrown in its face, as it has now gone into business with the PIF and Saudi Arabia.

The PGA faces potential issues with its sponsors due to its merger with LIV Golf, as well. Some of the PGA’s biggest sponsors, such as FedEx and Anheuser-Busch, have taken stances on certain social issues that are in direct opposition to the PGA’s affiliation with Saudi Arabia.[20] Saudi Arabia’s human rights violations include discrimination against women and members of the LGBTQ+ community.[21] The severe backlash against the PGA now that it is affiliated with the Saudi government could spread to its partners. Both legal and public relations disputes could arise between the PGA and its sponsors as the league moves forward with the merger.

The US Government has begun an investigation into the new entity being formed.[22] Amongst other concerns, the company will have to face government scrutiny to determine if the merger is legitimate.[23] Antitrust issues beyond those brought up in the lawsuit against the PGA could come in to play as well. The merger may have occurred to cut legal fees for the two entities, but as the merger unfolds, the legal ramifications will become apparent.

[1] https://www.reuters.com/sports/golf/pga-tour-european-tour-liv-golf-announce-merger-2023-06-06/

[2] https://www.cnbc.com/2023/06/07/golfs-pga-liv-merger-seen-as-major-win-for-the-saudis-americans-are-slamming-it.html

[3] https://www.golfdigest.com/story/saudi-golf-league-2022-primer

[4] https://theathletic.com/4585729/2023/06/06/pga-tour-liv-golf-merge-timeline/

[5] https://theathletic.com/3634155/2022/09/27/mickelson-liv-golf-pga-tour-lawsuit/

[6] Id.

[7] https://theathletic.com/3475136/2022/08/03/mickelson-dechambeau-liv-lawsuit-pga-suspensions/

[8] Id.

[9] Supra n.5.

[10] Supra n.4.

[11] Id.

[12] Supra n.1.