PGA Tour and LIV Golf try to drop lawsuit against each other
The PGA Tour, LIV Golf and Saudi Arabia’s sovereign wealth fund on Friday asked a federal judge in California to dismiss the lawsuit that catapulted golf’s economic and power structure into the US legal system.
The request to dismiss the case with prejudice, meaning it cannot be resubmitted, came less than two weeks after the tour and the wealth fund, which funded LIV, announced a preliminary agreement to form a partnership to go. While the deal may not be finalized for months and is under increasing scrutiny in Washington, Friday’s filing in Federal District Court in San Jose, Calif., was a milestone in the abrupt relaxation between the rival circuits.
Judge Beth Labson Freeman, who is overseeing the case, is expected to approve the request, a cornerstone of the preliminary agreement between the tour and the wealth fund. By waiving the lawsuit, LIV, the PGA Tour and the wealth fund limit the potential for damaging revelations and mounting legal bills, closing an opportunity for redress if the new alliance falls apart.
Justice Department officials, who were already conducting an antitrust investigation into men’s professional golf, are expected to look closely at the deal and even try to block it or force changes. At least two Senate panels are demanding information about the planned transaction and its fallout, and the deal hasn’t even received approval from the PGA Tour board.
Much about the deal itself also remains in flux, including valuations of the tour’s assets, LIV and the DP World Tour, formerly the European Tour, which will be housed in the new for-profit venture. The tour’s commissioner, Jay Monahan, is expected to serve as the company’s CEO, and Yasir al-Rumayyan, the wealth fund’s governor, is set to serve as the chairman. The PGA Tour expects to get a majority of seats on the new company’s board, but the wealth fund will have extensive power over how it is financed, ensuring the Saudis significant clout.
Until June 6, when the deal was announced, the PGA Tour had warned against allowing Saudi money and influence into golf, leading to lawsuits in California that had costly, complicated lives.
The bitter litigation began last August, when 11 LIV players, including major tournament champions Phil Mickelson and Bryson DeChambeau, filed a lawsuit accusing the tour of violating antitrust laws. LIV joined the cause herself later that month.
The tour also pursued its own claims against LIV, which it said had improperly disrupted existing contracts with players. The tour later received Judge Freeman’s approval to expand the case to include the wealth fund itself and al-Rumayyan, just one of the rulings that put pressure on the Saudis and their allies, whose superior financial resources put enormous strain on the tour.
The tour, endowment fund and LIV fought a ferocious battle over evidence gathering in the case, and many documents in the case were redacted, but a federal magistrate judge concluded this year that the endowment fund was “the driving force behind the establishment, funding , the oversight and operation of LIV”, undermining the claim that it was a passive investor in golf.
A lawsuit was not expected until at least next year.
Hours before Friday’s filing of the tour and LIV, The New York Times filed a motion asking the court to open the documents in the case. The Times cited a “substantial and legitimate public interest in this proceeding and its outcome” and suggested that the planned partnership could address concerns about competitive harm.
“To the extent that competitive harm existed at the time of sealing, those justifications may not apply with equal force today — or after completion of the parties’ expected merger,” the Times filing reads. Sealing is a decision that can and should be reviewed as facts change and circumstances require it.
It was not clear when the judge would rule on any of Friday’s motions.