Jamie Squire
By Joel Beall
For the moment, the proposed Super Golf League remains just that, hearty in concept but short on substantive matter. What is clear is the PGA Tour’s stance towards the wannabe global tour, a position Commissioner Jay Monahan has not strayed from since the threat materialised two years ago: them, or us.
However, as the SGL toes closer to existence with players reportedly weighing eight- and nine-figure offers, Monahan’s warning to players in an email in January 2020—that those who join a rival circuit will face immediate suspension and a possible lifetime punishment—could be put to the test. Does the tour have the legal authority to permanently ban individuals for aligning with the SGL?
For starters, the PGA Tour, like any other employer or organization, has the discretion to enact rules of conduct of its members, employees and independent contractors. One of the provisions in the PGA Tour Player Handbook and Tournament Regulations is that each PGA Tour member acknowledges the commissioner, the tour’s policy board and the appeals committee have the authority to permanently ban a member from playing in a tour co-sponsored, approved or coordinated tournaments if the member violates its regulations. The handbook also provides that a player ceases to be a member of the PGA Tour if, in the judgment of the policy board, the member commits a serious breach of the Tournament Regulations, the PGA Tour’s Code of Ethics, or otherwise conducts himself in a manner unbecoming of a professional golfer.
One such regulation generally prohibits tour players from playing in events when there is a PGA Tour-approved or sponsored event taking place at the same time. Per the handbook, players who reach the 15-event minimum (which a member must meet as a condition of their membership voting rights) are eligible for three conflicting-event releases per season, which is why so many tour players were allowed to play in this week’s Saudi Invitational. However, the regulations also state such requests can be denied. In short, the PGA Tour likely has the discretion to decide that joining a competing tour is a serious breach of its regulations.
Now, one of the long-standing truths is that players are not tour employees but independent contractors. This seemingly bestows more freedom to when and where an individual can play and thus raises the question if the tour has the power to limit that. But according to Darren Heitner, who teaches at the University of Florida and has written several books on sports legislation, that contractor status is not as big of a factor in a potential league fight as some may believe.
“This response [of a suspension or ban] by the PGA Tour has the feel of a ‘non-compete,’ intending to prevent players from performing for leagues that do seem to be competitive to the PGA Tour,” Heitner says. “Players have the choice of complying or not.”
Attorney Tom Allen—who practices in government services, litigation, and labor and employment areas—agrees, saying that though the tour will need to be careful when navigating the laws regarding agreement to limit competition, it shouldn’t be a material difference. “Typically, employers have greater latitude with regard to independent contractors versus employees—hence, the ‘independent’ part of being a contractor,” Allen says. “Here, the focus will be on what powers the PGA Tour can exercise overall with regard to its members, and that shouldn’t depend on ‘employee’ versus ‘independent contractor’ status.”
Luke Walker/WME IMG
Still, do event denials and suspensions and bans violate antitrust laws?
Heitner asserts the tour is operating within the law. “I do not believe [the tour is violating antitrust laws], since the player has other options to compete, which is the basis for the ban itself,” Heitner explains. “The PGA Tour is a non-profit organization that has the right to exclude individuals from its ranks as long as it abides by its own policies, provides no preferential treatment, and does not act in a discriminatory manner.”
However it may not be that definitive, says Allen. Unlike Major League Baseball, which infamously received an exemption from the Sherman Act (which prescribes the rule of free competition among those engaged in commerce in the United States), the PGA Tour has to abide by the law and any argument against a ban would use antitrust as the heart of its counter.
“To make such a case, that would require a player to show, No. 1, that the tour has monopoly power in a market and, No. 2, that the PGA Tour is trying to maintain that power through means other than having a superior product or business savvy,” Allen says.
Allen notes this is not new ground for the PGA Tour. In 2015, a class-action lawsuit was brought by caddies against the tour using antitrust and intellectual property claims, an effort that proved unsuccessful. “Prevailing in an antitrust lawsuit is much more complicated because the plaintiff would have to establish many things, but most importantly, a threshold requirement: defining the market,” Allen says. “That’s where the caddies lost.”
Allen also mentions the tour could face heat not just from players but the Federal Trade Commission on antitrust claims. In fact, the FTC concluded after a four-year investigation in the early 1990s that the tour had violated antitrust laws—partially due to the aforementioned rule stipulating permission for a conflicting-event release—and recommended federal action. But no action was ultimately taken, a circumstance credited to the work of then-tour Commissioner Tim Finchem (a lawyer himself who worked in President Jimmy Carter’s administration) and the tour’s lobbying mastery. Coincidentally, this clashed with Greg Norman’s first try to challenge the PGA Tour through his attempt to launch the World Tour.
Back to the present. There is another point to a theoretical antitrust claim that is unique to the tour. That would be the tour’s status as a charity—a status that has garnered plenty of scrutiny in itself. That circumstance, though, does not necessarily apply in this case. All entities, be it for profit or not, are subject to the Sherman Act, but the PGA Tour is a 501(c)(6) non-profit, which is different from the more commonly known 501(c)(3) entity. Organizations that are 501(c)(6) are typically entities such as business associations, chambers of commerce and sports leagues. Basically, as long as the entity’s actions are taken to benefit the association or its line of business, the entity is operating within the IRS Regulations. And as an extension, any rumblings that this could jeopardize the tour’s tax-exempt status are misguided.
Oisin Keniry
“To lose that status, the PGA Tour would have to do something to benefit one individual as opposed to its line of business, and I do not believe a ban of a player or players falls into this category,” Allen says.
Along with the caddie lawsuit, the tour has successfully defended itself against antitrust claims from Morris Communications Corporation regarding the tour’s limitations on real-time scoring, and it prevailed in former tour player Harry Toscano’s Clayton Act antitrust lawsuit against the Senior PGA Tour. History is on its side.
Of course, as professor Lee Igel of New York University’s Institute for Global Sport notes, beyond the legality of the decision of banning players are the moral and business questions of such an action.
“In a larger world, in which free agency, job hopping, and changing expectations about work are the norm, banning someone from participation because they want to take on a new opportunity may not be a good look,” Igel says. “It can also be a response to trying to hold on to too much of what made the organization successful.”
Even juxtaposed against the SGL’s ethical baggage are the optics that the tour is not operating for the good of the game but for the good of its own interests. “There are two separate, but related, issues being dealt with here. One is about the PGA Tour and its players needing to work out overdue updates to the business model, including what have become big-money items such as ownership of and income opportunities from video content,” Igel said, nodding to the complaints Phil Mickelson made to Golf Digest earlier this week. “Another is about the PGA Tour needing to work out its role in the future of the sport. Trying to combat an upstart competition puts attention, time, and resources there instead of thinking through what the PGA Tour could do to maintain its competitive advantage.”
On that last front, the tour may argue that combatting a rival and maintaining competitive advantage are one in the same. And it appears they have the legal power to do so.
