European Tour May Punish LIV Golfers, Arbitrators Rule

AUGUSTA, Ga. — Golf’s European tour may punish players who defected to the rival Saudi-financed LIV Golf series, an arbitration panel in London ruled in a decision released on Thursday, the first day of the Masters Tournament.

With litigation in the United States possibly years from a conclusion, the panel’s decision about the European series, the DP World Tour, was the subject of immense anticipation and anxiety among players and executives. All sides saw it as a crucial test of whether long-established tours could easily discipline players who joined LIV, the league bankrolled with billions of dollars from Saudi Arabia’s sovereign wealth fund.

The ruling in Europe will have no effect on the Masters, where 18 LIV players are in the field. But it was a blow to a rebel league that had hoped the days of tournament play would deliver a springboard to greater credibility, not renewed discussion about its appeal and risk to big-name pros.

The decision is also likely to shape the European roster for the Ryder Cup, the wildly popular U.S.-vs.-Europe competition that will be held in Italy this fall. To be eligible for the European team, players must be members of the DP World Tour.

The case before the arbitrators in London involved a narrow issue: the conflicting events policy of the DP World Tour, formerly known as the European Tour, which bars players from participating in certain tournaments without approval. In their ruling, announced after a five-day hearing in February, the arbitrators concluded that rebel players had committed “serious breaches” of the tour’s rules.

The arbitrators found that the violations “increased the likelihood that commercial partners would be tempted to terminate or limit relationships with the tour.” Citing “the scale and importance of the potential harm” to the tour, the panel said that Keith Pelley, the tour’s chief executive, had “acted entirely reasonably” when he turned down the players’ requests to appear at LIV events.

In a statement hours before the start of the Masters, Pelley embraced the ruling.

“We are delighted that the panel recognized we have a responsibility to our full membership to do this and also determined that the process we followed was fair and proportionate,” Pelley said.

LIV did not immediately comment on the decision.

Even though the case dealt only with a specific tour policy, many sports lawyers predicted that its outcome could shape ambitions to create alternatives to marquee leagues, tours and federations. A victory for the tour, that thinking went, would lend fresh support to the kinds of rules leading sports organizers have created to protect their television rights agreements and market power. A ruling for the players might have encouraged athletes — and not just in golf — to weigh more seriously overtures from start-up leagues and competitions offering richer paydays.

The subject has bubbled up repeatedly in recent years, with particularly fraught cases involving soccer, speedskating and swimming, and could become more common as athletes assert greater autonomy and as wealthy Persian Gulf states look to invest more heavily in sports. The women’s golf world, for example, has been rife with speculation that Saudi Arabia will eventually underwrite a women’s league similar to LIV, a competition that has fractured the men’s game.

That split became conspicuous last June at a course near London, when longtime tour players like Ian Poulter, Charl Schwartzel and Lee Westwood appeared at LIV’s first event. The tournament offered early glimpses at just how much money golfers stood to make if they shunned traditional tours in favor of the Saudi-backed circuit: Schwartzel won $4.75 million at the three-day event, thanks to his individual and team performances. He had earned close to 17.7 million euros, or more than $19 million, over his tour career, where his first win was in 2004.

Tour officials, wary of allowing individual golfers to undercut their multimillion-dollar television contracts and sponsorship arrangements, responded with suspensions and fines. Poulter, though, was among the players who won a stay of the punishments, pending the arbitrators’ ruling. This week’s decision ultimately covered 12 players — four others had abandoned their appeals — who competed in the LIV event in Britain or a subsequent one in the United States, a group that included Poulter, Westwood, Martin Kaymer, Graeme McDowell and Patrick Reed. Schwartzel and Sergio García were two of the players who had withdrawn from the case.

García, Reed and Schwartzel, all of whom are past Masters winners, are among the LIV players competing this week in Augusta.

LIV’s skeptics routinely see the circuit, with its 54-hole, no-cut tournaments, as promoting a diluted version of golf and as a way for Saudi Arabia to put distance between itself and its human rights record. LIV executives insist they are only trying to electrify and repopularize a sport they judge stagnant, and the league’s players, many of whom signed contracts that guaranteed them tens of millions of dollars, see themselves as independent contractors who should be free to compete when and where they choose.

“There is no difference whether I’m on the PGA Tour or on LIV: I’ve always played two tours,” Reed said in a January interview at a DP World Tour event in Dubai, where he was wearing a LIV hat on a driving range. “So all these guys saying that you can’t basically double-dip, you can’t — What’s that cake phrase they love to use? Make your own cake and eat it, or something like that? — well, Rory, myself, all these guys have played on multiple tours.” (Rory McIlroy, a star of the PGA Tour and DP World Tour, has been among the most outspoken opponents of LIV.)

In their decision, the arbitrators said pointedly that the independent contractor argument was “overplayed.”

“Individual players have to accept some limitation on their freedoms inherent in tour membership,” the panel said. No player, the arbitrators noted, “suggested that he had given up his independence by signing up to onerous (albeit remunerative) obligations to LIV.”

The tour, the arbitrators ruled, had not broken laws governing competition or the restraint of trade.

“It is no part of competition law to require incumbents to offer no resistance — they are entitled to react and retaliate, even if dominant,” the panel added.

The ruling by the arbitrators is unlikely to have a direct effect on the legal battles in the United States, where LIV and the PGA Tour are mired in bitter and expanding litigation. The American dispute will not go to trial before next year.

The British newspaper The Times had reported on Tuesday that the arbitrators had ruled in the DP World Tour’s favor, triggering a wave of chatter around Augusta National’s grounds. With the text of the ruling then still unreleased, McIlroy largely deferred comment but said, “If that is the outcome, then that certainly changes the dynamic of everything.”

If LIV players resign from the tour, their prospects of making the Ryder Cup team will vanish under the eligibility rules. Sticking around might not guarantee a place on the roster, either.

“I can only do what I can do, and that is to play the tournaments I can play, try to play them the best way possible, and then everything else is out of my hands,” García said on Tuesday. “So the decisions if we can get picked or will get picked or anything like that, it’s not going to come down to me.”

Instead, he said, his Ryder Cup fate could be settled by whether the European captain, Luke Donald, “thinks that I’m good enough. We’ll see.”