PITTSFORD, N.Y. — A Justice Department antitrust investigation into men’s professional golf has hit major tournament winners Phil Mickelson, Bryson Smith, and others as officials probe whether the PGA Tour attempted to manipulate the sport’s labor market. It includes interviews with players including DeChambeau and Sergio Garcia.
The ministry has been investigating since at least last summer, including allegations of collusion in the official World Golf Rankings and close ties between PGA Tour leaders and the individual organizations that host the Masters. PGA Championship and US Open.
Lawyers for the PGA Tour met with Justice Department officials in Washington this week, but it’s not clear when the review will be completed, let alone whether the government will seek to force any changes on golf. But the scope and relentlessness of the investigation has further confused the sporting world, grappling with the recent rise of LIV golf. The league had used money from Saudi Arabia’s sovereign wealth fund to lure top players off the PGA Tour.
Eight people familiar with the Justice Department investigation, who spoke on condition of anonymity because the investigation is pending, described the breadth of the investigation. The ministry declined to comment.
Unlike Major League Baseball, no golf organization has a blanket exemption from federal antitrust laws. A handful of closely related organizations have run golf’s top class for generations, but have endured some level of scrutiny in the past.
The PGA Tour, America’s leading pro circuit and the LIV’s opponent in a pending antitrust lawsuit filed last year by the Rebel League, often hosts tournaments that make up the majority of a golfer’s competitive schedule. . But the tour will not host the so-called Big Four tournaments, the most cherished events in the sport and a key way for players to earn influence to generate prize money and sponsorships.
For example, this week’s PGA Championship is overseen by the PGA of America at Oak Hill Country Club outside Rochester, New York. The US Open is hosted by the United States Golf Association, and Augusta National Golf Club operates the Masters tournament. (The R&A, which hosts the British Open, is based in the UK.)
The groups haven’t moved in unison since LIV debuted last year — the circuit’s players, for example, haven’t been suspended from the majors — but the establishment of professional golf remains antitrust. It is the focus of investigators. LIV lawyers welcome government oversight and are in regular contact with Justice Department officials who have taken no stance on the league’s lawsuit against the PGA Tour and have not intervened in the lawsuit. there is
Stephen F. Ross, a professor of sports law at the University of Pennsylvania, said, “If the system is rigged, consumers aren’t getting the best product, and it’s a conflict between two or more parties. If it is the result of an agreement, it is a violation.” He graduated from State University and previously worked for the Department of Justice and the Federal Trade Commission.
The PGA Tour, which declined to comment Wednesday, has adamantly denied any wrongdoing and has predicted the ministry’s investigation will fail, taking a tough stance when the LIV surfaced last year. They have threatened and even imposed suspensions to discourage players from leaving the Saudi-backed league, which has sometimes offered guaranteed contracts of more than $100 million and offered the highest prize money in golf history.
Tour executives said their strategy was rooted in membership agreements aimed at protecting the collective market power of elite players in negotiating TV rights and sponsorship of tournaments, and violated agreed rules. The golfer claims he can take disciplinary action. But investigators are concerned that the Tour’s punitive approach may have threatened the health of golf’s labor market, which now includes players as independent contractors and free choice. It also includes the LIV faction who loudly argue that they should participate in the tour as a group.
The department’s investigation went beyond a superficial glance at the LIV’s public complaints to include interviews with some of golf’s most prominent figures.
Mickelson, who has won six majors, including the 2021 PGA Championship when he became the oldest major winner in history at age 50, is also a fearsome public critic of the PGA Tour. He reportedly received a $200 million bond last year to join the LIV and sparked fires for disrespecting Saudi Arabia’s record of human rights violations, when he tied for second in the second round last month. Nearly silenced those who doubted the rest of his playing potential. Masters.
DeChambeau was a sensation when he won the 2020 US Open, while Masters winner Garcia made his major debut in the 1990s, becoming one of the most prominent European golfers of his generation.
Representatives for Mickelson and DeChambeau declined to comment. A representative for Garcia did not respond to a message seeking comment.
LIV declined to comment. But in March, league commissioner Greg Norman publicly hinted at the circuit’s cooperation with the Justice Department’s investigation.
“The Department of Justice came and tried to understand the antitrust side of things,” Norman said during an appearance in Miami Beach. “So the PGA Tour created another legal front they had to fight.”
Antitrust experts said a review of Tour’s labor practices could be the most important element of the investigation if the Justice Department admits the circuit court’s practices were flawed.
“This gets to the heart of what the PGA is,” said Paul Dennis, a former Justice Department official who later worked on antitrust issues on his own. “If they’re heading there, it’s more important because it really impacts their business model in terms of player relationships.”
But US regulators are also becoming increasingly aware of the close ties between golf’s most powerful organizations and their executives and managers.
This aspect of the investigation is not unique to golf investigations. Under the Biden administration, the Justice Department’s antitrust division has expressed particular concern about individuals holding multiple top positions at potential competitors, leading public company directors to vacate their board seats. There was also
Jonathan Cantor, assistant attorney general for the antitrust division, said in October that the ban on double duty is an “important but poorly enforced part” of federal law.
Whether the Justice Department seeks to force changes in the leadership of golf executives and its board of directors is whether Kanter and his deputies believe they can prove the PGA Tour is a competitor to major tournament organizers. It may depend, but the idea has been privately ridiculed by Tour executives, who have previously called into question the intensity of the ministry’s potential litigation. The tour and major tournaments compete for TV rights and sponsorships, but in many ways they are far from being head-to-head rivals.
But they work together.
This tour is involved in a world ranking system that major tournaments use in part to determine fields. In addition to the Tour, Augusta National, the PGA of America and the USGA also serve on the ranking system’s governing committee, all of which contribute to the technical committee.
Player rankings are based on a complex formula that considers performance in sanctioned tournaments, from PGA Tour events to competition on lesser-known circuits. Because LIV’s application to join the system has not yet been responded to by administrators (LIV executives acknowledge that special disposition is required for the league to accept it immediately), the golfer’s rankings have fallen. , and future major participation is threatened. (Tour commissioner Jay Monahan has withdrawn from deliberations about joining the LIV system.)
The Justice Department investigation is of critical importance to LIV Golf, which is facing setbacks in its lawsuit against the PGA Tour. But the league has spent months stoking debate over federal investigations, potential implications for the PGA Tour, and potential benefits for LIV.
Tour cites its records to refute the effort. An FTC investigation ran for years and ended in 1995 without taking any action against the tour.
Shortly before that, Norman’s initial quest to launch a global circuit to rival the PGA Tour fell through.
David McCabe Contributed to the report.
