In golf’s civil war, the system favours the establishment – but for how long?
By Roddy Cairns - Posted on 27 June 2022
In the past few weeks and months, the world of golf has found itself embroiled in a messy civil war, with some heavyweight belligerents. On one side stand the established golfing competitions, particularly the lucrative USA-based PGA Tour, boasting decades of history and backed up by leading players such as Rory McIlroy and John Rahm. On the other side are LIV Golf, the big-money breakaway competition bankrolled by Saudi Arabia’s public investment fund and fronted by Aussie golfing legend Greg Norman. LIV Golf has already rallied an impressive list of names to its lucrative standard, including American superstars Phil Mickelson and Dustin Johnson, as well as European Ryder Cup icon Ian Poulter.
As with so many facets of modern sport, the dispute has money at its heart. The PGA Tour and its European equivalent have long dominated top level golf; with the best golfers typically belonging to one or the other and travelling around the world to compete in their lucrative events. LIV Golf is the new kid on the block, a disruptor which wants to do golf differently – and has the petro-dollars to back up its big ambitions. The first LIV Golf event (the LIV Golf Invitational) took place near London at the start of June, and instantly became the sport’s most lucrative event of all time – champion Charles Schwartzel scooping a $4.75m cheque, from a total prize fund of $25m. That’s serious money, and it is not hard to see why it appeals to top players. LIV Golf would not accept the characterisation of their tour as merely a cash-cow, though; they have set out an ambitious plan to change the entire spectator experience. Figurehead Greg Norman would also argue that top players should have the right to maximise their playing revenues as they see fit, to operate as independent contractors and to gain the compensation their talents deserve – all things LIV Golf are facilitating.
The question for the established tours is whether to shuffle over and make way in their eco-system for LIV Golf, or to try to nip it in the bud and preserve the status quo. The PGA Tour have signalled their intent to take the latter approach. On the first day of the LIV Golf Invitational, the Tour announced it was suspending all those Tour members who were playing in the rival event, on the basis that the players involved had breached the PGA Tour’s Tournament Regulations (the “Regulations”). The Regulations (along with the Player Handbook) govern the relationship between the player and PGA Tour members, who by playing in PGA Tour events are acknowledging the right of the PGA Tour to take action against them for any violation of the Regulations. The Regulations stipulate that a Tour member cannot play in a non-PGA Tour event which conflicts with a PGA Tour event (the PGA Tour’s Canadian open was being played in the same week).
The LIV Golf rebels had requested a waiver to play in the event (a “conflicting event release” or “CER”), but the PGA Tour turned it down, exercising the discretion it holds to reject a CER request if it would place the Tour “in violation of a contractual commitment…or would otherwise significantly or unreasonably harm the PGA Tour”. PGA Tour commissioner Jay Monahan pulled no punches in the statement that accompanied the suspension, stating that the rebel players had “made their choice for their own financial-based reasons” and that golf fans were “surely tired of all this talk of money, money and more money”. Before the suspensions had even been finalised, however, several of the LIV Golf rebels had already resigned their PGA Tour membership, jumping before they were pushed in a clear power play.
The European Tour has followed suit in punishing those of its members who played in the LIV Golf Invitational, who breached a similar provision of its Members General Regulations Handbook. It has fined each of the rebel players £100,000 (a substantial sum, but small change to those on the LIV Golf payroll), and it has suspended the rebels from the next two European Tour events – with a threat of further sanctions for players who play in further “conflicting” tournaments. The message is clear – pick a side.
The reaction of golf fans to the defections may yet be the most interesting element of the whole affair, and reported ticket sales for the inaugural event did not appear to indicate that it has captured the hearts of the golfing public. Many appear to be disgusted by the source of LIV Golf’s bottomless pit of prize money, with the human-rights-shy Saudi state (and, in particular, the brutal execution of journalist Jamal Khashoggi by Saudi government agents) turning some off the tournament. It’s a moral issue the players have had to grapple with, too, as press questioning in advance of the inaugural event focused heavily on the decision to accept the Saudi money. Most dodged the question, but it doesn’t look like going away.
Phil Mickelson’s position is perhaps the most interesting – he is just back from a self-imposed 4 month hiatus from the sport, which came on the back of him describing the Saudis as “scary mother%*£^s to get involved with”, as a result of the Khashoggi murder and their “horrible record on human rights”. Despite this, in the same interview he said that he would consider getting involved with the proposed breakaway league because it gave the players “leverage” in their relationship with the PGA Tour, who he accused of using “manipulative, coercive, strong-arm tactics” in its dealings with players. In the end, Mickelson’s desire to reset the relationship with the PGA Tour appears to have outweighed his qualms about his new paymasters.
Mickelson’s is not the only criticism that has been levelled at the PGA Tour, despite its attempts to paint itself as the innocent, injured party. Some of the rebels have pointed out that the PGA and European Tours have not exactly shied away from Saudi cash in the past – the latter ran its own event in Saudi Arabia until recently, with the former granting waivers to a number of its players to compete. There is also a feeling that the European Tour may already be well used to seeing top players being poached by a rich competitor, as it has for many years been powerless to stop the top European players from following the money to the PGA Tour. These considerations mean the moral high horse on which the PGA Tour currently stands is a little lower than they might like you to believe.
A complicated relationship
So, why don’t all the parties just go their separate ways? If the money on offer at LIV Golf is so good, why do the likes of Mickelson need to worry about being banned from the PGA Tour? Could they not just become full-time LIV Golf players and forsake the traditional tours?
Ultimately, the relationship between an individual golfer and the PGA or European Tour is essentially contractual in nature. By becoming a member of the Tour, they agree to be bound by its rules (in this case, the Player Handbook & Tournament Regulations). If they don’t want to follow those rules any more, the parties can elect to end that relationship - leaving the player free to earn his corn elsewhere.
However, there are two complicating factors – the Major Championships and the Ryder Cup.
The four golf Majors (the Masters, PGA Championship, US Open and Open Championship) are not organised by the PGA or European Tours, but by a range of third parties – meaning the PGA Tour suspension doesn’t stop a LIV Golf player from competing in these most iconic and historic of events (at least not immediately). That can be seen in the field of last weekend’s US Open, which included a number of the LIV Golf players, with the hosts (United States Golf Association, “USGA”) having confirmed in advance that any LIV Golf players who had met the qualification criteria were eligible to play (and a similar statement having now been made by the organisers of the Open, which takes place in St. Andrews in July).
The qualification rules for the US Open are not straightforward, but essentially players are split between those who have qualification exemptions (due to previous major successes, or a spot in the top 60 of the Official World Golf Ranking, the “OWGR”) and those who have to go through the nail-biting qualification process. This means that a huge number of the world’s top golfers earn their place at the US Open (and other majors) on the basis of their OWGR position. At present, the PGA Tour is one of the eligible tours which contribute to OWGR rankings, whilst the LIV Golf tour is not - meaning any player who solely competes in the breakaway tour would tumble down the world rankings and quickly lose their OWGR major exemptions. That isn’t a complete bar to qualification, of course – the likes of Mickelson, who has won all four majors, could rely on those past glories to grant exemptions, whilst others could try their hand at qualifying.
However, the availability of ranking points is a significant advantage for the PGA and European Tours – for now. LIV Golf are aiming for their events to garner ranking points in future, although that may be a tricky sell – any changes to the OWGR system would be made by its Governing Board, which includes representatives of both the PGA and European Tours. There’s also a chance the majors could change their exemption criteria, with Mike Whelan (chief executive of USGA) saying that, whilst he could see it becoming harder for LIV Golf tour players to qualify for the US Open, the organisation was constantly re-evaluating its field criteria and that it would take a “long-term view”.
The other ace card currently being held by the PGA and European Tours is the Ryder Cup, the biennial international team competition between Europe and the United States. This is golf’s premier international competition, holding the same sort of status as the football World Cup – a chance for players to compete for their country or continent, and to elevate themselves beyond their bread and butter results on an international stage. It is a competition that has made legends of some golfers, with Ian Poulter famously garnering the nickname ‘The Postman’, on the basis that he always delivers for the European Team.
Qualification for the Ryder Cup can vary from year to year and between the teams, but generally speaking points are awarded for dollars earned at certain events – again, regular PGA Tour events count towards that total, and if LIV Golf events do not obtain the same status then it will become very difficult for many of its players to qualify for the Ryder Cup (especially if they are simultaneously struggling to make it into the Majors, which are another key Ryder Cup qualification route). The Ryder Cup could change its rules, of course, but given that it is jointly administered by Ryder Cup Europe (the majority stake in which is held by the entity which runs the European Tour) and the PGA of America (from which the PGA Tour spun off), that may involve an implausible element of turkeys voting for Christmas.
This is the issue that proposed breakaway competitions sometimes find themselves in. The established competition enjoys some sort of official, recognised status which allows it to be a gatekeeper of the game – something which can be very hard to challenge, even with an unlimited pot of money. The recognition of the PGA and European Tours by the OWGR and in qualification for the Majors and Ryder Cup (and LIV Golf’s current non-recognition) are a powerful factor in favour of the status quo.
A similar situation arose in football when the European Super League staged its attempted breakaway, with FIFA saying they would not recognise it and threatening that ESL players would not be able to compete internationally for their countries at World Cups or continental championships. In common with most team sports, football is well used to operating this way; with a chain of “membership” that runs from FIFA down through UEFA, national associations, domestic leagues and clubs until it reaches the player themselves. If a player wishes to compete in the biggest competitions (the World Cup as an international player, the Champions League at club level) then they have to play in an officially sanctioned league. Whilst the collapse of the ESL under fan pressure means the World Cup question was never fully tested, there is no doubt that it was a key consideration – and will be if the ESL resurfaces in future. Golf’s status as an individual sport may give players greater agency over their career than footballers (who will be registered as an employee of a single football club), but the issues outlined above show that there does remain a similar imperative to play in ‘official’ competitions.
So, what options does a disruptor such as LIV Golf have in the face of this kind of entrenched position, where official recognition of some sort or other gives the establishment a competitive advantage?
Well, one approach is to challenge the legal validity of that privileged position on the basis that it is anti-competitive (ie. that it constitutes a monopoly or cartel of some sort). That’s the approach the ESL has taken, filing proceedings in a court in Madrid which have since been referred to the European Court of Justice, on the basis that UEFA and FIFA’s attempts to sanction the breakaway clubs are in breach of EU competition law. In particular, the case revolves around two articles of the Treaty on the Functioning of the European Union: Article 101, which prohibits cartels and other agreements/practices which could distort competition in the EU; and Article 102, which prohibits undertakings who hold a dominant position in a market from abusing that position. The case will be heard on 11 and 12 July, and could set a significant precedent in the EU arena.
There is perhaps some cause for nervousness, as the ECJ has shown in the past that it is willing to force fundamental changes to the way sport is organised in its defence of EU Law principles – the ground-breaking case of Jean Marc Bosman ripped up much of the football transfer system on the basis that it was contrary to a player (Bosman)’s right to freedom of movement. If the ESL are successful, it may bolster the confidence of the likes of LIV Golf that the dominant position enjoyed by the PGA and European Tours could potentially breach competition and/or anti-trust law.
However, it is worth noting that the PGA Tour has faced (and defeated) such actions before, with a group of caddies having unsuccessfully brought a class action suit against it in California in 2016 for threatening to expel them from working on tour if they did not wear sponsored bibs and refusing to compensate them for doing so, practices the caddies had claimed were anti-competitive.
The other option LIV Golf have is to settle in for a war of attrition and seek to undermine the trump cards being held by the established tours. If they can successfully set up competitions which rival the Majors in terms of status and player pool, perhaps the lustre of those fine old competitions will begin to fade and qualification for them will cease to be such a pull factor in favour of the PGA and European tours. Similarly, if LIV Golf prepare a rival trans-continental competition which attracts bigger stars and generates better drama than the Ryder Cup, it could eventually replace the near-century old tournament in the golfing pecking order.
This was the approach taken in the sport of darts by the breakaway PDC, with the older competitions of the established BDO being reduced in status over the years by the absence of big stars such as Phil “the Power” Taylor. It took 26 years from the breakaway for the BDO to finally fold, but there had been a constant reduction in the quality, prestige and financial reward associated with its tournaments and a steady stream of top players defecting to the PDC. The winner of the final BDO World Championship in 2020 received a mere £23,000 for his troubles, and by that point the competition was very evidently inferior to its PDC equivalent (which, by comparison, rewards its winners with a cool £500,000). Whether the same kind of usurpation can be replicated in golf, where the scale of both finance and professionalism is far greater than darts, remains to be seen – but the almost limitless resources of the Saudi public investment fund mean that it could afford to absorb years of heavy losses to reach that point, were it minded to do so.
The relationship between the PGA Tour and the breakaway rebel golfers has been severely damaged, potentially beyond repair. With neither side currently looking like backing down any time soon, the fate of the sport at elite level looks set to be decided by a combination of law, contractual provisions, the stance taken by third parties such as USGA and OGWR, and the resolve (and financial clout) of both sides in this ugly dispute. As this story rumbles on, all eyes will be on golf – for all the wrong reasons.