The Justice Department met with PGA Tour lawyers this week, but a timeline for the completion of its review is unclear.
PITTSFORD, N.Y. — The Justice Department’s antitrust inquiry into men’s professional golf has included interviews with players, including the major tournament winners Phil Mickelson, Bryson DeChambeau and Sergio García, as the authorities examine whether the PGA Tour sought to manipulate the sport’s labor market.
The department, which has been conducting its investigation since at least last summer, has also explored the specter of collusion in the Official World Golf Ranking and the tight-knit relationships between the leaders of the PGA Tour and the distinct organizations that stage the Masters, the P.G.A. Championship and the U.S. Open.
Although lawyers for the PGA Tour met with Justice Department officials in Washington this week, a timeline for the review’s completion — much less whether the government will try to force any changes in golf — is not clear. But the inquiry’s scope and persistence has deepened the turbulence in the sport, which has been grappling with the recent rise of LIV Golf, a league that used money from Saudi Arabia’s sovereign wealth fund to lure top players away from the PGA Tour.
Eight people with knowledge of the Justice Department’s inquiry described its breadth on the condition of anonymity because the investigation was pending. The department declined to comment.
Unlike Major League Baseball, no golf organization has a blanket exemption from federal antitrust laws. A handful of organizations that have close ties to one another have run golf’s top echelon for generations but have withstood some scrutiny in the past.
The PGA Tour, the dominant professional circuit in the United States and LIV’s opponent in a pending antitrust lawsuit that the rebel league brought last year, stages tournaments that have often made up the majority of golfers’ competition schedules. But the tour does not run the four so-called major tournaments, which are the sport’s most cherished events and important ways for players to earn prize money and sponsorship-sparking clout.
This week’s P.G.A. Championship, for instance, is being overseen by the P.G.A. of America at Oak Hill Country Club, just outside Rochester, N.Y. The U.S. Open is organized by the United States Golf Association, and Augusta National Golf Club administers the Masters Tournament. (The R&A, which organizes the British Open, is based in Britain.)
The groups have not moved in lock step since LIV debuted last year — the circuit’s players, for example, have not faced bans from the majors — but professional golf’s establishment has remained a focus of antitrust investigators. Lawyers for LIV have cheered the government’s scrutiny and have regularly communicated with Justice Department officials, who have taken no stance on the league’s lawsuit against the PGA Tour and have not intervened in the case.
“If the system is rigged, then consumers are not getting the best product, and if that is the result of an agreement between two or more parties, then that becomes a violation,” said Stephen F. Ross, who teaches sports law at Penn State University and previously worked for the Justice Department and the Federal Trade Commission.
The PGA Tour, which declined to comment on Wednesday but has aggressively denied wrongdoing and predicted that the department’s inquiry would fizzle, adopted a hard line last year when LIV emerged. It threatened, and then imposed, suspensions to discourage players from defecting to the Saudi-backed league, which has offered guaranteed contracts sometimes worth $100 million or more and provided some of the richest prizes in golf history.
Tour executives have insisted that their strategy was rooted in membership rules designed to protect the collective market power of elite players in matters like television-rights negotiations and tournament sponsorships, and that golfers who breach rules they agreed to can be disciplined. But investigators have shown interest in the possibility that the tour’s punitive approach threatened the integrity of golf’s labor market, which now includes a LIV faction that vocally argues that players are independent contractors who should be free to compete on tours as they choose.
The department’s inquiry swiftly moved beyond a superficial glance at LIV’s public complaints and came to include interviews with some of golf’s most recognizable figures.
Mickelson, who has won six majors, including the 2021 P.G.A. Championship that at 50 made him the oldest major tournament winner in history, has been a fearsome public critic of the PGA Tour. He accepted a reported $200 million in guaranteed money to join LIV last year, provoked a firestorm when he played down Saudi Arabia’s record of human rights abuses and, last month, all but silenced people who doubted his remaining playing potential when he tied for second at the Masters.
DeChambeau was a sensation when he captured the 2020 U.S. Open title, and García, a Masters winner, first starred at a major in the 1990s and has been among the most distinguished European golfers of his generation.
Representatives for Mickelson and DeChambeau declined to comment. A representative for Garcia did not respond to messages requesting comment.
LIV declined to comment. But the league’s commissioner, Greg Norman, publicly hinted in March at the circuit’s cooperation with the Justice Department investigation.
“The D.O.J. came, trying to understand the antitrust side of things,” Norman said during an appearance in Miami Beach. “So the PGA Tour created this other legal front that they have to fight.”
The review of the tour’s labor practices could prove the most consequential element of the investigation, antitrust experts said, if the Justice Department finds fault with the circuit’s approach.
“That one goes more to the sort of core of what the PGA is,” said Paul Denis, a retired Justice Department official who later worked on antitrust matters in private practice. “If that’s where they’re headed, that’s much more significant because that really does affect their business model in terms of their relationship with the players.”
But American regulators have also become increasingly mindful of the close ties among golf’s most powerful organizations and their executives and administrators.
That prong of the investigation is not unique to the golf inquiry. During the Biden administration, the Justice Department’s antitrust division has shown particular concern about people serving in multiple top roles for potential competitors, and its misgivings have sometimes led directors of public companies to surrender board seats.
In October, Jonathan Kanter, the assistant attorney general for the antitrust division, said that the prohibition on overlapping service was “an important, but under-enforced, part” of federal law.
Whether the Justice Department seeks to compel changes in executive or board leadership in golf may hinge on whether Kanter and his lieutenants believe they can prove that the PGA Tour is a competitor to a major tournament organizer, a notion that tour executives have privately scoffed at and used to cast doubt on the strength of the department’s potential case. The tour and the major tournaments jockey for television-rights fees and sponsorships, but they are far from head-to-head rivals in many senses.
They do, however, cooperate.
The tour has a stake in the world ranking system, which major tournaments use, in part, to determine their fields. Along with the tour, Augusta National, the P.G.A. of America and the U.S.G.A. also have seats on the ranking system’s governing board, and all of them supply personnel for its technical committee.
Player rankings are based on a complex formula that considers performances in accredited tournaments, from PGA Tour events to competitions on circuits that draw little notice. Since administrators have not yet acted on LIV’s application to participate in the system — LIV executives have acknowledged that the league would require special dispensations to be accepted immediately — its golfers have slid downward in the ranking, threatening their future participation in the majors. (Jay Monahan, the tour’s commissioner, has recused himself from deliberations about LIV’s bid to join the system.)
The Justice Department’s inquiry is of substantial importance to LIV Golf, which has faced setbacks in its lawsuit against the PGA Tour. But the league has spent months stoking chatter about the federal investigation, its potential implications for the PGA Tour — and the potential benefits for LIV.
The tour has countered that effort by citing its record: an F.T.C. inquiry that lasted years and ended in 1995 without any action against the tour.
Shortly beforehand, Norman’s first quest to start a global circuit to rival the PGA Tour collapsed.
David McCabe contributed reporting.
Source: Golf - nytimes.com