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The Legal Issues Facing European Golfers

The Saudi-backed and newly formed LIV Golf tour has sent shockwaves through a sport that is typically resistant to change. What once seemed an unlikely disruption by the polarising Greg Norman, became a reality in June 2022, when he snapped up some of the game’s household names and caused a schism in an otherwise uncontroversial sport. Beyond fiscal and formatting ramifications, Europe’s professional golf tour, the DP World Tour, and its professional golfers face pressing legal issues.


The LIV Golf Formula


LIV Golf (54 in Roman numerals) is a new tour consisting of 54-hole, three-day tournaments that is funded primarily by the Saudi Arabian Public Investment Fund (PIF). High calibre players, young stars and some veterans of the game have been amongst those to switch allegiance from the DP World Tour to LIV Golf. Players who have joined have emphasised their desire to ‘grow the game’ in Saudi Arabia, ignoring the elephant in the room - the tantalising eye-watering sums of money on offer.


During LIV Golf’s inaugural season the first seven events amounted to $25 million in overall prize money, with $20 million on offer for the individual competitions and $5 million for the top 3 teams. The single event purses eclipse those seen on the DP World Tour, leaving the players with a choice between upholding tradition and massive financial gain. Traditionally, players on professional tours earn money depending on their performance, specifically if they make the “cut” after two days of golf. Failure to do so means they are not paid or reimbursed for travel costs.


The LIV Golf tour not only involves fewer tournaments than the 39 found on the DP World Tour, but also compensates players regardless of their performance on tour. Nevertheless, the removal of the sense of jeopardy has undermined the competitive nature of the game.


The LIV events do not currently qualify for Official World Golf Ranking (OWGR) points. Consequently, golfers that only play on the LIV Golf tour will be unable to compete in the Ryder Cup, the pinnacle of team competition in golf and will also struggle to qualify for all the majors. From media reports, this seems to have surprised the players that joined LIV Golf who appear to have assumed they could continue playing on multiple tours to gain ranking points.


The Alleged Breach of Regulations


The LIV Golf tour began on the 9th of June 2022 and once players turned up at the event the DP World Tour alleged a breach of contract. Although the details are not available publicly, players sign a contract to play on the DP World Tour which includes a non-compete agreement preventing them from competing in golf tournaments that clash with any DP World Tour Events. Prior to the event, the LIV Golf rebels (those who left the DP World Tour) asked for an exemption to play at the LIV event and continue to play DP World Tour events, which was refused. Consequently, on Friday 24th June 2022 the DP World Tour released a statement saying that sanctions will be taken against members of the tour that ‘breached Tour regulations and participated in the LIV Golf event at the Centurion Club from June 9-11.’ These Regulations are set out in the ‘Members’ General Regulations Handbook’ and the ‘Code of Behaviour Regulation’, which refers to the ‘non-compete agreements’ the players are bound to and constitute the grounds from which individual players may be sanctioned against. These sanctions included fines to each of the sixteen players in breach of the contract in the amount of £100,000 and suspended them from the following three events. The reaction of the players was combative, composing a letter addressed to the CEO of the PGA European Tour (the body behind the DP World Tour) Keith Pelley insisting the sanctions were lifted before the 1st of July.

Governing Law and Dispute Resolution

The organisation behind the DP World Tour is a UK LLP but the Tour takes place in many jurisdictions and the golfers are from a variety of countries. It is perhaps for this reason that sporting bodies often use arbitration rather than the courts to settle disputes.

In response to the request of the ‘Sour 16’ players to lift the sanctions the DP World Tour held firm. Nevertheless, highlighting that the original contract between the DP World Tour and its players included arbitration as a first resort to breaches of contract, Ian Poulter, a modern British icon of the game, alongside younger golfers Justin Harding and Adrián Otaegui proceeded with legal action.

The ‘Sour 16’ sought an interim injunction on the sanctions at an arbitration hearing at the International Dispute Resolution Centre by Sports Resolutions where an injunction was granted for the players to play in the upcoming events and the fine of £100,000 was temporarily paused. Their legal case was centred on their ability to continue to earn their living, as being banned from the current year’s already planned DP World Tour events would unfairly exclude them from their expected income. Whilst the DP World Tour lost what they would term the “battle” they are readying themselves for the “war”. The dispute will be revisited in February 2023, in front of a panel over five days.

Individual Actions vs Corporate Actions

LIV Golf has made public statements promising to back individual players in any legal action. It seems that the Sour 16 are being used as the front-line fighters in what is actually a proxy battle between LIV Golf and the DP Tour. As LIV Golf has no legal “relationship” with the DP Tour, they have no direct right to be represented in the breach of contract matter.

The battle between LIV Golf and the DP tour has far-reaching ramifications abroad. Some of the members of the LIV Golf tour launched lawsuits, including Ian Poulter, citing anti-competitive behaviour by the US PGA. This concerns competition law, which deals with ‘agreements or practices which actually or potentially distort competition within a market’. In September 2022, LIV Golf, as a legal body, joined itself to this lawsuit alleging unfair monopolistic practices were preventing it from establishing an alternative tour. The US PGA countersued in October seeking damages against LIV Golf for alleged interference with its players.

The outcomes of the US disputes are likely to reverberate in Europe as the DP and US PGA tours have some cross-ownership and share many players. From a legal perspective, the question is whether this dispute will be resolved in the courts or by negotiation and compromise.


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