What’s Next in the Legal Fight Between LIV and the PGA Tour?

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Speaker 1: I miss a green, for example, I'm already upset.

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Speaker 2: When I find my ball in the bunker, I'm really upset.

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Speaker 1: And when I find my ball in a brid egg Frida egg, the dreaded Frida egg, Frida egg, fridagg Frida egg, bride egg.

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Speaker 2: Lie, I'm about ready to run off of the hump.

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Speaker 1: Welcome to the Frida Egg Podcast. I'm Garrett Morrison, and today we're discussing Live Golf's legal fight with a PGA Tour. Last week, a California judge denied an effort by three Live players to obtain a temporary restraining order that would have allowed them to participate in the PGA Tour's FedEx Cup playoffs. So that initial skirmish is over and the tour one, but the same players, along with several have a larger anti trust suit against the PGA Tour, and that one is ongoing. The Live group is also likely to explore legal challenges to other organizations in golf, including potentially the official World Golf Ranking. To get a much needed expert perspective on all of this, I'm talking today to Gabe Feldman. Gabe is a law professor at Tulane University and He specializes in antitrust and sports law. He's also the host of Between the Lines, a podcast about sports and the law. So, Gabe, why don't we start with the fundamentals here. The plaintiffs in this big anti trust suit are Phil Mickelson, Rice and to Shambo, Ian Poulter and seven other players who signed on with the Saudi backed Live Golf series and were promptly suspended by the PGA Tour. So what is the basic legal rationale that these players believe they have to sue the tour?

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Speaker 2: Yeah, so there's two rationales. One is under contract law, where they basically say, and this came up in the tro that the PGA Tour didn't follow their own rules in suspending those three players not letting them play in the FedEx playoffs. The anni trust claim, which is the bigger claim and the claim that will proceed with that big group that you mentioned, is at its base that the PGA Tour has engaged in a bunch of behavior. And we can talk about what those things are, but they've engaged in behavior, including disciplining and suspending the players in a way that harms competition in the professional golf market. And with their claim since they're the players, they really have to say either that they have been harmed because they now have lower salaries, lower endorsement income, whatever harm they might be able to allege, or that consumers are harmed because the product is somehow worse off, or lots of arguments that might come up. They focus primarily, as we might expect, on the harm that they suffered or will suffer. And so what they have to prove, essentially, as any anti trust plants, it would have to prove, is that the conduct that the defendant engaged in here the PGA tour, was unbalanced harmful to competition, which means you look to see what's the harm to competition they caused, and are there any what the law calls pro competitive benefits that they achieved? Is there anything good that came out of this, any innovation. So you might have let's say, tours coming together and they're able to produce a better product if you had the AFL and the NFL they were competing with each other. They came together and created the full NFL as we know it, and people say, well, that's a better product because now all the teams are playing against each other instead of these two separate leagues. So you balance the harm versus the benefit, and if the harm is greater than the benefit, then it violates anti trust law, or if the benefit is greater than the harm, then it doesn't. And another way, and this is the last point I'll make on the before all your listeners fall asleep on the legalities of anti trust law? Is that really the question that gets asked? Now you remember one thing about anti trust law and golf, it's you look at the harm that the players are alleging, and then you ask were the PGA Tour's rules reasonably necessary to achieve whatever benefit they were claiming, Because we know they're harming the players, but they're alleging that there's some offsetting benefit. Did the PGA Tour need to do what they did to achieve those benefits or was there some other way to do it that wouldn't have involved, in this case, suspending the players or disciplining them. So that's again, and it's frankly, if you're not a little bit confused by the anti trust standards, then you're not really listening because it is incredibly confusing and unpredictable, and it's muddy, and it gets muddier when you have a case like this, which is not the typical anti trust case where you have a bunch of manufacturers accused of getting together to fix prices that harm consumers. This is very different. So you're taking a complicated area of law and applying it to a very complicated industry.

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Speaker 1: Well, let's start with the harm side of the equation. What are some important examples of anti competitive behavior that creates harm that the live players are citing in their complaint.

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Speaker 2: Yeah, so they are citing a relatively narrow group of cases because they're citing the cases where workers in this case you're not employees or independent contractors, but where the labor is harmed as opposed to the end consumer like us. Because again, in the typical anti trust case, two TV manufacturers get together and they agree to the fixed prices of their TV and we have to pay more as consumers, and that's illegal because they're harming us. For the golfers, they're looking at other cases, particularly in professional sports, where teams have gotten together and said we are going to restrict your ability to move from one team to another free agency restrictions. We are going to have an entry system that you can only play in this league if you're drafted by a particular team, and then you can't negotiate with anyone else player drafts. All of those things were challenged as illegal under anti trust lawn them were held to be illegal. The reason they all exist now is because the players have unions and they agreed to those things as part of their collective bargain agreement. We don't have that in golf. There's no union, there's no collective bargaining. So you can see these anti trust cases playing out differently than you would now in the NFL or the NBA. And they also point to other golf cases, some tennis cases out there where the leagues or the tours or the associations put rules in place that made it one difficult for the players to play in competing tours, and then two made it difficult for those tours to exist, because if you can't get the players, you can't compete. And so the ATP Tour in tennis has been sued a couple of times on these grounds. PGA obviously faced scrutiny back in the nineteen nineties on these grounds, and almost the UFC is facing this right now. Lots of sports organizations. The dominant ones face this, They claim that the reason you're dominant is because you are engaged in a bunch of behavior that is keeping your competitors out of business. And the dominant tour says, no, no, no, no, we're dominant because we're better. The NFL says, we're dominant because we have the best product, that not because we're doing something to push the XFL out of business or whatever. New I mely all American Football League, all these these businesses, these competing leagues that end up going out of business. Now Live obviously is different because Live is not gone out of business, and that's that's been part of the problem, ironically for the players, is that the tour is actually competing.

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Speaker 1: Live has in a sense been a victim of its own success. And we'll talk about that later because that was a key factor in the recent ruling on a specific case that came up recently and played out. But just going back to the kind of general anti trust case here, I heard you make a distinction between harms to the players and harms to consumers. Now, harms to consumers might be the usual anti trust situation, and that we would all be familiar with the players are the concerned party in this case, what would be necessary for Live to bring an antitrust suit that had more to do with harms to consumers? Would that be? Is that a potential avenue because it doesn't seem like it's being explored right now right.

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Speaker 2: Well, I think what would have to happen is one if the Live Tour itself were the plaintiff as opposed to the players.

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Speaker 1: Yes, because the players.

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Speaker 2: Are complaining that they were harmed, I think, as we'll talk about, but they're making a ton of money, and they're making more money than they were in the PGA Tour. But so it's hard for them to say that this is what antitrust law should be concerned with that we as professional golfers are getting paid sixty million dollars but were not allowed to then play in the FedEx playoffs. But the Live Tour can say, well, yes, we still exist and we are competing. But if it weren't for the PGA Tour's restrictions, we wouldn't have had to pay this much money to the players. Part of the reason we had to pay them so much is because they knew that they were going to be suspended from the PGA Tour and not eligible for the playoffs, and that they might lose some endorsement money and they might lose the opportunity to play in some majors. They knew they were going to take a financial hit because of the PGA Tour's restrictions, so to make it worth their while, we had to pay a lot more than we normally would. And if it weren't for the PGA Tour, we would pay. I forget the total number of dollars that's been publicly announced that the players are getting from them, but we would have had to make pay half of that right because it's attractive to make more money than on the PGA Tour. But we wouldn't have needed to pay twice as much or three times as much as four times as much. So the Live Tour could argue that they have more direct proof of harm even though they still exist. It's still harmful. If you're a billionaire and you can afford to pay one hundred thousand dollars, but somebody forces you to pay two hundred thousand dollars in violation of the law, you can still sue. You can't say, well, but you still have so much money you can planning about it still would be illegal, So that would be the more direct case. Now, maybe the Live Tour, for a variety of reasons, doesn't want to bring that lawsuit. And then there's also the Department of Justice that's investigating this, and they can look at really any harm. They can look at, whether it's harm to the consumer, harm to the player, harm to live tour, whatever the case may be. They're not limited by the harm that they've suffered because they're bringing the case on behalf of the US right, they're bringing it on behalf of protecting competition more broadly, so that I think the Live Tour again, they would be a better plaintiff in a lot of ways. Put aside that they may not be the most sympathetic plaintiff, but they would be. They would have more direct harm that they could allege at least now. And I think we are also talk about how the players may be able to prove that they've actually suffered more harm than the judge was willing to recognize in the Toro hearing. But it's really difficult because and when the NFL players brought there in I trustly losses, there was no real claim or real winning claim that it was harming consumers, that it was harming the end consumer. So it's going to be a tough argument for the golfers to make unless they can prove that without the PGA Tours restrictions, the consumers would see more golfers playing in more tournaments and that would be better for everybody. So that's that's a possible argument down the road.

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Speaker 1: Well, I mean, if Live itself is not a particularly sympathetic plaintiff, then the Live players themselves probably aren't super sympathetic at this point either, given that some of them have gotten over one hundred million dollars to play on the tour, and that seems to have been been an important fact.

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Speaker 2: Yeah, it's true, but they're at least they're people. They're not they're not an entity back by the Saudis, and now they're players getting paid a lot of money buy an entity backed by the Saudis. So they're still not the most sympathetic plaintiff. But but I do think that if it to a jury, which I'm not sure this case would ever do, that someone on a jury might relate to that person and say, hey, that's one of the best golfers in the world. Why should you be limiting the amount of money they can make as opposed to I, Greg Norman or somebody sitting up there on behalf of the tour. It might just be a tougher argument either way. I think it is a tough argument.

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Speaker 1: So going back to the first complaint itself that the players brought against the PGA Tour, was there anything in there that made you stop and say, uh oh, this might be a problem for the PGA Tour in future proceedings.

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Speaker 2: Yeah, I mean if there's not, then it's a really bad complaint because that's the opportunity to tell your side of the story without any sort of immediate response, and so you're able to put in all the facts that support your side and sort of spin things in your favor. So yes, if you look at it now, the PGA Tour will disagree with what I'm about to Saylawyers will disagree with what I'm about to say. But if you look at the complaint, and this is what happens when you hire very sophisticated lawyers who have a lot of experience bringing anti trust claims, the complaint makes out a case for an anti trust violation. It makes out a case that the PGA Tour with the European Tour has engaged in behavior that has harmed the players and has harmed competition, and is done not to make the PGA Tour better, but is done simply to drive competition out and whether it's livetour or some other competing tour, and but for those restrictions, we'd have lots more competition. And in almost every other industry in the country, we think of competition as great because it means more innovation, it means a better product, it means lower prices. But in sports we tend to think, well, wait a minute, we want all the players to be playing at the same time in the same tournament, just like with the NFL and AAFIL, we wanted to see the league's merge, so the best would be playing against the best. So it's not necessarily the case that consumers want ten competing golf tours, but they do probably want ten competing razor manufacturers because it means we're going to get a blade, you know, with a razor with nine blades on it, and that's going to cost less than the one before. So yes, to answer your question more succinctly, yes, there's plenty in that complaint that should worry the PGA Tour. And the biggest thing that the PGA Tour probably needs to worry about, like any anti trust defendant, is anti trust law itself being unpredictable. And if the plaintiff wins, they're entitled to three times the damages they've suffered. So if they're able to prove that without the PGA's restrictions. Again, let's let's take the Live Tour. Well, let's say that the players combined can prove that they lost twenty million dollars because of what the Live Tour did, right, just accept that number. Then anti trust law would multiply that by three and award sixty million in damages. And so if you think about the Live Tour, if they do sue and they are able to claim we paid an extra hundred million, then we need to that we should have had to because of what you did, PGA Tour, and they won that that would be multiplied to three hundred million. So that's you know, when it's an unpredictable area of law and then you get hit with three times damages, that's a that's a scary proposition. When the NFL was sued by the USFL way back in the day. If the USFL had won a big verdict, they won, but they only won a dollar, which was troubled to three dollars. But if they had one, it could have put the NFL out of business because they would have had three times the damages they suffered. So that, in theory, is a risk for the PGA Tour here. I don't think that's likely to happen, but that's what jumps out anytime you read an antitrust complaint, especially one that's this long and is able to allege so many details that yes, there's there's plenty of stuff in there to give me pause.

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Speaker 1: If on the PGA this was a one hundred plus page complaint, which I've heard a number of lawyers say, wow, this is this is a lengthy one. But I mean, part of what you're part of what you could be pointing out here is that the PGA Tour has significantly lower financial resources than the LIVE side of this, because Live is of course backed by the Public Investment Fund of Saudi Arabia, which is enormously more wealthy than the PGA Tour. Do you think it's just a general concern when you see two entities of such different financial wherewithal going up against each other.

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Speaker 2: Absolutely, and it's usually the reverse. It's usually the dominant league, whether it's the NFL or the NBA or the ATP tour, whoever's facing that challenger. They have the money, they have the resources, they have the wealthiest owners. They can sustain a long, drawn out, expensive legal battle. Typically the startup leagues can't. And they can maybe make an early fight and try to sue. But if they lose one of these early stage, at one of these early stages, like Live the players did, then they there's nothing they can do. They have to give up. Now it's flipped. So where again the PGA tours is not poor, but relative to the live tour probably is. And so the live tour, if they want to, if they keep on wanting to throw money at this, they can outlast the PGA Tour, right and whether that's through litigation or potentially just hiring away signing away the next group of players. So yeah, I mean, I think that's a significant factor in this, is that there don't appear to be in any hurry to go away, and they're not going to be intimidated or financially unable to compete in the litigation. Right, they're well resourced enough that they can hire all the intrest lawyers in the world and rack up legal bills and PGA Tour one is not going to want to do that, and two is not going to be in the financial position to do that. So yeah, that gives a tremendous advantage to anyone who's in one of these battles to have more resources.

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Speaker 1: So let's talk about the first major activity in this case, which had to do with a temporary restraining order or TRO against the PGA Tour that was sought by three live players. These players were Taylor Gooch, Matt Jones, and Hudson Swafford, who were all plaintiffs in the larger antitrust suit as well. But what made these three players different was that they had qualified for the FedEx Cup playoffs this season on the PGA Tour and the TRO was meant to allow them to play in last week's first playoff event. So, Gabe, first of all, what did the live players have to demonstrate in order to get the temporary restraining order and be allowed to play?

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Speaker 2: So the technical answer is they had to show that they had a strong likelihood of success of winning their overall lawsuit, and that if they didn't get this temporary restraining order, if they weren't allowed to play, they would suffer what the law calls irreparable harm, which basically means harm that can't be remedied through money, and so that if you aren't given the release, if you're seeking right now, there's no way to fix it after the fact. So those are the two elements that the players had to prove, and that the court found that they hadn't proven either of those.

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Speaker 1: Now. Of course, last Tuesday, Judge Beth Freeman denied the tro so Guch, Jones, and Schwafford did not get to play in the FedEx Saint Jude Championship. What was Judge Freeman's basic reasoning in her ruling.

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Speaker 2: Well, the reasoning, if you want to simplify this, it's because temporary restraining orders are almost never granted. They are only only in emergency situations. It's an emergency relief, and you think about what might constitute emergency relief and what people often think about when they hear a tro is. You ask for a temporary restraining order because you have an abusive partner, and you need someone to be physically distanced from you, because there's no way to rectify the harm if they're if they're not kept away from you. So we're thinking we're talking about real emergencies again that can't be remedied by money damages. And the judge found two things. One is, there doesn't change me any irreparable harm here because to the extent that you might lose money by not being able to play in the playoffs, and you might lose sponsorship, and you might lose the ability to play in the majors, that's money and you can get that money back, So that's not really considered a reparable harm. But I think even more problematic for the players is the judge said, I'm not even sure you suffered any harm because you're getting more money through Live than you would have or were getting through the PGA tour. So and that's why you're getting so much money is because you knew, and the judge is very clear about this, you knew that when you signed up with the Live tour under your terms of your agreement with the PGA Tour, they were going to suspend you. And you knew that if you were suspended, this is what you were going to lose. And that's why I Lived Tour paid you so much money, was to make up for the money you were going to lose. So definitely no irreparable harm and again not even sure you've suffered any harm whatsoever. And then they also said, look, to win the case, you would have to show that the PGA Tour has harmed competition. And in order to harm competition, you typically need to show that they've driven competitors out of the market. And there's Live Tour. They've not been driven out of the market. And they're also paying lots of money and they have you know, it's sort of cuts both ways. When the Lift Tour is trying to promote itself to say we're a real tour. You know, we're not exhibitions. We're here to stay. Okay, If they're here to stay, then what harm have they suffered? And what harm have the players suffered if they're touting the fact that they're here for the long runner are paying this much money. So and the last one I'll make is the judge didn't say, which she can't because it was this is emergency relief. The judge didn't say the players will lose this case when if it goes to trial. She also didn't say they're going to win this case. But that's the point of emergency hearing. They don't have time to take depositions, to actually dig into the case and then go through a lengthy trial. So this is all right, we have four days to look at this. I'm going to give you my snap judgment. And if in my snap judgment it doesn't look like you're really likely to win and that you'll suffer real harm or reparable harm, if I don't give you the relief, then you lose. So ninety plus percent of plaintiffs lose on a toro. Doesn't mean they'll lose the case, but one of the to silver line this a little bit for the Live Tour. One of the benefits of having this decision is the judge sort wrote laid out a roadmap for what they will need to do to have a stronger chance of success as the case progresses, on what type of harm they will have to show and why they failed here. So again, it would have been a massive, massive upset if the Live Tour players had if the plaintiffs had won their case. The fact that they lost very little impact on what the outcome of the full case may be, just because again there was so little evidence on the record and so little chance to make legal arguments. So I wouldn't read too much into that one result.

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Speaker 1: You mentioned that Judge Freeman laid out a kind of roadmap for potential success for the live case against the PGA Tour. Can you give me a basic idea of what that roadmap is.

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Speaker 2: Yeah, I mean the roadmap would be providing evidence that by not getting into the playoffs, and again, the tro was on a very narrow issue, so she wasn't looking at the underlying anti trust case or the overarching an I trust case, but she said there may be some merit to it would just need a full trial to see that, or at least more extensive discovery and briefing. But it would be that either the PGA Tour is dominant in golf in the world and the Live Tour is really not going to be able to stick around, or that the PGA Tour and the European Tour and the World Golf rankings and maybe other entities have gotten together and conspired. Is the big word you use in an a trust law. It's a conspiracy that they have conspired to make it almost impossible for players to not play regularly in the PGA Tour because if they don't play regularly, they don't get the ranking points, and they don't get the ranking points, they don't get entry into the majors, they don't get the endorsement money, and so this is sort of a blip on the radar that these players left. And then even though they're being paid more by Livetour than they were by PGA Tour, they're still going to be harmed because you can't replace the exposure you would get in the majors and whether in terms of endorsement deals, future career as a broadcaster, whatever the case may be. They're going to line up experts that say, here's how much each one of these players lost or will lose because of these suspensions, and here's how dominant the PGA Tour is, and again, here's how much money they have cost everybody involved. So it's really just how are you harmed? Just I need to see why you are worse off than you were before all this started happening.

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Speaker 1: So the claim against the PGA Tour can kind of take the form of the tour controls in a way access to the majors. Now we can talk about a potential suit against the OWGR, the Official World Golf Ranking later, But that's interesting because they have to find somewhere where the players can't just be compensated monetarily, right because if they can just recoup the money through the live tour, then there's not a great case that they've been harmed. But if they're denied access to the majors or to other ultra prestigious events that offer something other than money, then the case for harm starts to gain a little bit more traction, am I? Right there? That they have to find some way that you know, the players can't just be compensated with money for what they've lost. There has to be a sense of, you know, like greater harm about the tournaments that they get to play in and what that prestige means for their careers.

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Speaker 2: Right well, now, now that we're past the temporary restraining order, it doesn't have to be a reparable harm anymore. It could just be money damages, but they're not being damaged the least. The judge determined on this. You know, this very emergency basis because the Lived hour is paying them so much, so the extent that they are losing out on any monetary opportunities, they're getting more than that from the Live tour, which is why they agreed to go to a live tour. Otherwise they would have stayed with the PGA Tour. Now, despite some of the players saying they're doing this to spread the love of golf and you know all that sort of stuff that I think most people would see that they're doing this because they're going to make more money, a lot more money. And if you are making more money, then again, how have you been harmed? But if you can say, yes, I'm making a lot of money, but overall they are restricting me from playing in these major events and from getting these endorsement opportunities, that is harming my career. And even if I'm making ten million dollars more this year, twenty million more this year, overall, it is going to harm me because of all these opportunities I'm losing out on. The judge's response to that and PGA toy is responsible, is wait a minute, I thought Live Tour was an elite golf tour. Why do you have to come play in our tournaments, just play over there. And I think that's going to be part of what the players need to flesh out on the record, is there's a difference. There's a difference between the regular tournaments and the majors, and there's a difference between the exposure and the prestige and what it means for your future career if you get to play in majors and have a chance to win majors. So I'm not sure that the judge fully grasps that or was fully convinced of that. Again, but even if it's true that you might be heard if you don't get to play in the Masters one year, I think the court still said, well, all right, then, how much does that cost? How much is that worth that you can get paid three times that amount if you win the case. I'm not going to prevent them from enforcing their rules. And you know, it goes to almost a more fundamental issue that the PGA tours are arguing and that other sports leagues have argued, is Hey, it's our tour. We get to decide what the rules are, and you can decide not to play in our tour, which you've decided to go play in this other tour. It's not like in the NFL, where there's really no competitor for the NFL. If you want to play elite professional football anywhere in the world and be on national TV and make the salary you do, it's the NFL or nothing. So if the NFL kicks you out, you have been prevented from being a professional football player at the highest level. If you're kicked out of the PGA Tour, I kicked out of playing professional golf because you have a live tour. Which, again, the more the Live tour says hey, we're real, We're real, PJ tour says, okay, then why are you bothering us go play there if they're so real. So again, it's a little bit of a double edged sword. The more the live tour is successful, the less likely these anti trust suits are to be successful.

00:29:22
Speaker 1: This episode of the Frida Egg Podcast is brought to you by USGA Memberships. We all know the USGA for things like championships, rules and handicapping, but they are also a big investor in golf's future. They do this through a variety of programs. These programs include helping golf courses manage water, fuel, and resources, expanding junior golf, and making sure that all races, genders, and ages have access to golf and feel welcome to play. All of the work that the USGA does wouldn't be possible without the support of USGA members. When you join the USGA, you not only leave a positive impact on the game you love, but you also get great benefits. Benefits like a member's only hat, a rule book, and a subscription to the Golf Journal. Visit USGA dot org slash join and become a member today. All right, back to the episode. Going back to the tro for a second, you mentioned that this is not a death blow for the case by any means, because there's a higher standard for getting a TRO than there would be for getting a favorable settlement or whatever in the larger anti trust case. But it sounds like you've picked out some things in the judges reasoning that are concerning for the long term case that live or live players have against the PGA Tour. You've talked about some of those. Is there anything else that you saw in that ruling where it made you think, oh, you know, this might be troublesome for the future case here.

00:30:54
Speaker 2: And let me put it in a golf analogy, if somebody makes like a one foot putt, don't read anything to how good of a golfer they are. But if they make a twenty foot putt or two or three of them are like, oh, that person can really put This was a one foot putt for the PGA Tour. Doesn't mean that they're not really good or have a really strong chance to success. But again it's just it's too early. But to answer your question in terms of what else is in the opinion where the Live Tour might be concerned, it was in a lot of ways the whole tenor of the judge's decision. There was a little bit of I don't say sarcasm, but a little bit of sort of snarkiness in there.

00:31:30
Speaker 1: Yeah, there's a little exasperation kind of like, yeah, why is this in my courtroom? You know, I've got more important things to deal with here.

00:31:37
Speaker 2: Exactly, And I think in the first sentence of the opinion, the judge says, these are plaintiffs who sign lucrative deals with the Live Tour and now they are seeking emergency relief. You don't have to read anything else that right there. The judge is basically saying you're making a lot of money and you know you're claiming this is some sort of emergency. I'm just not buying it, and so that again, fundamentally, I think the biggest problem for the player's case, again at least Lift Or might have a different argument, is you are doing really well, and when there's a video of the players on the private jet, nobody's really going to look at them and say, ah, we really need to step in to protect these guys, because that harm to competition. So it is a again, it's gonna be a real uphill battle, not because of what the judge necessarily said, but just because of the facts. Because the Lift Or Now if the Lift Tour has to cancel a tournament, or if fans don't come to see it, or if they can say that the ratings aren't doing well, or players can say that they've lost sponsors directly or more sponsors because of this, then that starts to give them more evidence of harm. But as it is right now, my biggest fear if I'm the Lift Tour is the judge is not convinced, or if I'm the tour or the players that the judge is not convinced that they actually have suffered any harm.

00:32:58
Speaker 1: Do you think there are other judges who had been more sympathetic to the live case? Not saying anything about Judge Freeman in particular, but just in your experience, might there be a judge out there who would be more inclined to side with the live argument here?

00:33:13
Speaker 2: Yeah, I mean there certainly are more plaintiff friendly, anti trust judges and more that sort of favorite big business or favor the employee. Here, like with a lot of sports cases, it's not you know, if you're a Republican judge, you're going to side with one of the tours, and if you're a Democrat you're gonna side the other way. It's just it's a weird ani trust case where we started talking about, you have a very wealthy PGA tour fighting with an even wealthier live tour, and so there's not big business in small business here. It's just two giant businesses. But and again with the foreign investment in the live tour muddying things even more. But you could get a judge or series of judges that just say, let the market work, just let competition work. There's no reason for you to prevent them from playing in these other tours that we just don't want any restrictions on how other tours might be able to compete and how the players might be able to compete. So if you get some sort of more extreme, free market focused judges, then you might get a different outcome. I'm not sure there's many judges in the country frankly that would have granted this TRO I don't think this was a bad draw for the live tour. I just think it's a bad case at the TRO stage.

00:34:35
Speaker 1: So say you were an attorney for the live players, and I know you don't know as much about the case as a live attorney would, but generally, what would you advise them to do next?

00:34:47
Speaker 2: For the players themselves, I mean, there's not much that think the players can actually do to strengthen their case right now unless things start happening to them. But the players just have to keep playing and and you know, not maybe glowed about how much they're making and how awesome they can do.

00:35:09
Speaker 1: They need to not look too happy about it. Basically, yeah, yeah, they.

00:35:12
Speaker 2: Talk about how terrible the conditions are and all these courses and how a t broke and hit them in the eye, and that never happened on the PGA Tour, But it's more really has the lawsuit progresses, and as the lawsuit progresses, if it progresses, what the Live Tour or the players, excuse me, you're going to try to do is get what we call discovery, which is just documents and information and evidence that the PGA Tour has that the Live Tour does not have. And what they'll hope to find is smoking gun evidence. And they claim in their complaint that they that they have it, that the PGA Tour is basically put together a document or a series of documents and how to destroy the Live tour.

00:35:52
Speaker 1: This is the monopoly manifesto. Is this what they refer to is yeah, exactly.

00:35:56
Speaker 2: And the USFL had that back in the day when they sue the NFL. The fell had put together a plan basically had to destroy the USFL and that was exhibit number one in the trial to say they're not doing it to make their product better, They're doing it to drive us out of business, which is exactly the argument that you want to make in an I trust case. So if there is better evidence that the PGA Tour has gotten together with the European tours gotten together with the world God Franklins and said, hey, we have it pretty good right now. We need to keep this tour from rising up and competing with us, and so here's what we're going to do to make it difficult for them to exist. Now, that would be the type of evidence that you get if you don't have anti trust lawyers in the room. But most times people don't have antit trust lawyers in the room, so you'd be surprising how many times people take notes of anti trust violations or conspiracies. So that would be what I'd be searching for in this case, and what I'm sure the plants' lawyers are searching for is what is the evidence we have that one they enter into some sort of conspiracy, two that it was designed to drive us out of business, which then harms competition, hurts consumers, hurts the players, hurts the competing tours, and then three, here's the evidence that we suffered harm. Right, It's just you got to go back to the basics of what an ana trust case is. And so there was an agreement in restriction of competition that harmed us, and some of that evidence, again maybe out of their control. They don't have it the PGA Tour has it, and so if they're able to get through the next legal hurdle, which would be potentially filing for a preminary injunction, which is sort of one step softer than a tro or trying to get past what's called emotion to dismiss or motion for somebody judgment. If you can survive past each one of these stages, you typically get access to more and more discovery. You can start deposing commissioner, you can start deposing other players, you can start deposing sponsors, whatever it might be, to get more evidence that yes, they are out to get us the live tour and the live tour players.

00:38:03
Speaker 1: Speaking of smoking guns, I'm not saying that this is a smoking gun, but something that came up in the hearing was that the PGA Tour apparently had some interactions with vendors where the tour was putting some pressure on vendors not to help out the live tour. If that kind of interaction between the tour and various vendors for tour events was prevalent common, would that constitute some harmful evidence for the PGA Tour.

00:38:35
Speaker 2: Yeah, absolutely, And they would still have to show that that action harmed them and harm competition.

00:38:42
Speaker 1: Sure, so they'd have to say, like, we tried to get this this was the best vendor for this particular thing, and we couldn't get.

00:38:48
Speaker 2: Them right exactly, Or we try to get on this network and we couldn't because the PGA Tour threatened that if you show their tournaments that we're going to stop showing yours.

00:38:56
Speaker 1: The TV deals might be a factor here, because that is I mean, if the Live can't get on TV, that's that's harm for sure.

00:39:03
Speaker 2: Oh yeah, And again that was a big issue in the in the USFL NFL case where the USFL said the NFL has talked to ABC and this is only major networks at the time, and said, hey, if you show any USFL games, we're done and you can't afford to lose the NFL. So again, maybe there's a different calculus here because of the money the Live Tour has and if the Lift Tour is willing to pay enough to a network, maybe they'd be willing to do it. But again, if you have let's say Tiger Woods or some other players that are working with the PGA Tour to say to the vendors, the sponsors don't touch them, because you know, then the question is what comes after the Because if they say because they're toxic and they're bad and they're doing all this bad stuff and I think it's going to hurt your business, that's one thing. If they say because we want to drive them out of business and we don't want them to compete with us, that's that's obviously a very different story, and that would be much more damning for purposes of the NIA trust lawsuit.

00:39:58
Speaker 1: If the PGA tour feels that it might be harmed in discovery, the discovery the discovery process might not be good for him. Maybe there are some emails out there that it doesn't want to come to light. Would the tour do you think be inclined to settle with the live players? I'm not even sure what that would look like. I mean, do you think that's a potential outcome? Here is some kind of, you know, behind closed door settlement where the tour is like, okay, okay, we don't want to go through this whole saga. What do you guys want? And the live players are sort of like, yeah, your case maybe wasn't that good in the first place. Let's settle. Is that possible?

00:40:34
Speaker 2: Yeah, it's possible, and I think settlement is certainly possible. I think it's probably unlikely that the opportunity to have some discovery would push the PGA Tour to settle, unless there's some stuff in there that's really really bad, which there isn't any company, But I'm not sure that that by itself would be enough. I think if they start to lose on the merits, that's when I think you're more likely to see settlements, or if they the judge starts to signal to them that they might lose on the merits. But that's what judges often do, is they'll say where mediators will come in and say, hey, you're at real risk here, your case is not as strong as you think it is, and here's why. So you're better off stepping out of court and reaching some sort of voluntary settlement where you still maintain control, because yes, PGA Tour, you might win, and then the at least the anti trust threat goes away. The live tour doesn't go away, but at least the anti trust threat does. But if you lose, you just might break you right, So there's even if only a five percent chance, it's a five percent chance, that your business is going to go under, and so that's typically what would push them more towards settlement. I don't know. You would might know better than I would if there is even a possible settlement here. Can they live, so to speak together? Can they coexist where the Live Tour is doing its thing, the PGA Tour is doing its thing. Maybe there is, you know, and maybe in ten years will look back and say, I can't believe the just just had the PGA Tour or without the Lift Tour. But you know, there's clearly so much animosity between the two and so much mistrust and so much stuff that's been said publicly that it may be hard for them ever to work together. But can they still work side by side? Right even if they're not working together, they can coexist, not be happy about it, but run their individual tours and then the players can you know, as the Lift Tour, if they can get in the world off rankings, if their tournaments can't, then you know a lot of those sort of things I think would make it more palatable for them. So yes, it's definitely possible they will settle. I think it's unlikely early on, but if the case progresses I think those chances increase.

00:42:44
Speaker 1: Yeah, I mean, I think you're right on in your interpretation of the animosity between the two sides. I think that that really plays a role here because Greg Norman, the CEO of Live, is out for blood, and I think that if Live had a different leader right now, that the whole tenor of the content would probably be different. But there is quite a bit of bitterness, and maybe that can be set aside if people find that their mutual interests are more aligned than they are not. So they're definitely those who think a merger is likely. It just doesn't seem like it at this point, which is which is kind of funny.

00:43:18
Speaker 2: Yeah, and there have been lots of bitter enemies that have found a way to merge because the money was right, So this wouldn't be the first time that seemingly mortal enemies have been able to come together. But we'll see again, we'll see if that happens.

00:43:32
Speaker 1: So, talking about some other potential legal avenues for Live players or for Live itself, we've been talking mostly about the case against the PGA Tour, and it sounds like this case against the PGA Tour can address a potential conspiracy that the tour engaged in with other organizations in golf, but the complaint would still be against the PGA Tour. Do you think it's it's likely or a strong move by Live or its players to see what it's what it might be like to see the OWGR. Because the OWGR consists of the PGA Tour, the RNA, the USGA, the International Federation of PGA Tours, et cetera. The OWGR kind of represents a collaboration of all of those. Is that potentially a vulnerable entity that Live can go after.

00:44:29
Speaker 2: Yeah, And it's because of that word you use their collaboration in ani trustful they call it a conspiracy and so so yes, it's vulnerable anytime any group comes together, more vulnerable if they are competitors that are coming together and agreeing not to compete on certain things. There's a question that came up about whether a PGA Tour and the European Tour or actually competitors, and the court said, no, they're not, or do you agree that they're not? Live Tour. But if you have these entities coming together to reach this agreement, and the Live Tour player is going to again prove that this harmed them. And I think the World Got Rankings is a good example of that, because if the players are not eligible to get points in the rankings and their rankings drop, then the downstream ramifications of that of the tournaments, the major they don't get to play in the endorsement dollars they may not get, all that harm that they will suffer becomes more tangible. And while you might say, way, of course you can have a ranking system, yes, but if the ranking system is designed more to drive your competitors out or keep them out rather than have a legitimate ranking system that makes it fun for fans to watch, that's when the antitrust issues start to come up again. The same thing happened with the ATP Tour. They have similar rules where you have to play a certain number of ATP tournaments to get Master Series Majors to get ranking points. And what PGAs said and the ATP has said is this makes it more fun. People want to see a playoffs, people want to see who the best is is. And that's all fine unless we have evidence that you said. You know what, a really good way to prevent another tour from starting is if we only award ranking points. If you play a certain amount of tournaments. In that way, players won't be able to leave because they won't get their ranking points. So, yes, it's and I would certainly it seems like a vulnerable spot that there'd be some evidence that there was some discussion that this kind of cements all of their status as the dominant players because nobody else can break into the system.

00:46:34
Speaker 1: Does somebody just sort of have to say it? Does Jay Monahan have to kind of like twirl his mustache. He doesn't have a mustache, But does he have to twirl his mustache and say I am doing this to prevent competition from coming into the marketplace. Does he have to like literally say that in order to prove that this is the intention of the actions that the tour has taken.

00:46:55
Speaker 2: Yeah, so he doesn't, because you actually don't have to prove intent even if you had the intent. What anaitrust law cares about is the effect. What's the effect on competition? So if you do have that smoking gun where Jay Monahan is twirling his imaginary mustache that says we want to drive the live tour out of business or at least make them spend a lot more money than they otherwise would have. If you have that smoking gun, that makes it a lot easier to prove the effect, which is, yeah, we had to pay all this money because look, they told us that's what they were doing. So if you don't have the evidence of the intent, it just gets a little bit harder to say, well, we don't know why.

00:47:37
Speaker 1: They were doing it.

00:47:38
Speaker 2: We don't know if they were doing it just to make their tour better, And yeah, you have to pay more money to compete. That's exactly what Apple has to do. If they want to hire the best engineers away from Google, they have to pay more money to convince them to leave. That's normal, that's the market. But if you can then show but Apple engaged in all this stuff to say we don't really care that much about these particular engineers. We just want our competitor to have to pay more, I think it's unlikely there's going to be anything that obvious in the discovery. But the more you can prove again that they were thinking about restricting competition, restricting player salaries, whatever it might be, the stronger your case is. But no, you don't need the smoking gun because you're likely not going to get it. What really matters is to show that there was this harmful effect on competition, which brings us back to the very beginning of the conversation. All right, what's the harm? What harm have you proved? You might think Jay Monahan hates Greg Norman, but hatred is not an anti trust violation. It's harm to competition. That's the anti trust violation. Let's see the evidence of it.

00:48:44
Speaker 1: So I want to zoom us out to ten thousand feet and ask you to engage in some reckless speculation, and I apologize. But do you think that any of these lawsuits, the current lawsuit and any potential ones, do you think that Live is going to find success through legal avenues here or are they eventually just going to have to drop this and compete, you know, in the way they have been doing so far. Do you think that the legal strategy is going to bear fruit in some form or fashion eventually?

00:49:20
Speaker 2: Yeah, me, it's a great question. Let me answer two ways. One is I think, as currently situated, I don't think the player's suit has much chance of success winning the trial right, winning the trouble damages. I think they might have a chance to get through some of the ear pliminary stages where the PGA Tour is going to move to dismiss, move to endicse really early, which is what every defendant does in every lawsuit because they just want to not have to go through that full trial. I think they may get through some of those initial stages, but I don't think their chance of success is very strong, as the judge said. But I do think there is a possibility that the Live Tour, as we talked about, might have more success because they're able to show more harm because they had to spend so much money. I do think the Department of Justice investigation is never a good thing. When the Department of Justice is investigating you for anything, I think that might turn up something. But it may be that the Live Tour's strategy, given their financial resources, is to compete while suing, and they put double pressure on the tour. And if you've got the financial resources to do it, why not do it? It just gives you even more leverage. You know, we don't have to beat you in court to beat you on the course, right, we might be able to outcompete you, but we also do have this other quiver in our arrow. In our quiver.

00:50:46
Speaker 1: I'm not an archer, so this other quiver in our quiver bag.

00:50:50
Speaker 2: Yeah, yeah, yeah, exactly, this whole this whole army of quivers here that we can call on that we have, we have other ways to beat you. And I think that even if if they don't think the case is going to be successful in the long run, if they can drag it out and make the PGA Tour spend more money, then I think in some ways that may be a win, right, just to force the PGA Tour to say, it's not so much that we think we're going to lose the case. We just don't want to keep spending millions in legal fees to make you go away. So we're better off because even if we win the case, you're still there. It's not like these other startup leagues that say our only chance of survival is if we win the anti trust suit for the live tour. That's not their only chance. It's going to be, as we call in Louisiana, land yapp, it's gonna be a little gravy that you get more money, but you don't necessarily need it. Now do you need it to make it easier to get all the players to come play on your tour in your tournaments, Yes, unless you want, you know, you want to spend another I don't know. I mean if Tiger fully retires and they were offering to pay him eight hundred million dollars, then it suggests they've got a fair amount of money to spend on other players. There's no other Tiger, but maybe there will be, and maybe the Live Tour will be able to say, look, you can play on the PGA Tour, but we'll play We'll pay you five hundred million dollars to come play with us. And you know, again, they don't need to win an anti trust lawsuit to do that.

00:52:20
Speaker 1: They haven't needed to so far, and they've they've gotten gotten some pretty big players to jump over to the Live Tour, even with a lot of the risks that are apparently inherent and going to live, one of which is that you're not getting many world ranking points. You might not get into the majors. Well, a lot of players have said, you know what, the money is good enough so that that's not that big of a deal.

00:52:43
Speaker 2: Yeah, And and I trust Love would say go ahead and start your own rankings then Live Tour, Yes, and you can have your own rankings than your own majors and and everybody will be even happier because there'll be more tournaments and more stuff for golf fans to watch. And it's a really good interesting question is would golf fans rather watch more tournaments that have the field cut in half, or rather just watch half the number of tournaments? But where you have everybody in the field.

00:53:10
Speaker 1: I think that most golf fans would say, we want the best players in the world centralized and playing in the same tournaments as often as possible. But I can see where if you go to a courtroom with this and you make the argument that golf fans will benefit from more tournaments, there's no reason for somebody who's not a golf sicco to not believe that argument. It seems completely reasonable. Yeah, exactly, Well, that's great for the live versus PGA tour or live versus everyone side of this. I don't know if you saw the breaking news last night about Patrick Reid's defamation case against Brandall Shambly, but that's the latest little wrinkle. It is related to the live versus PGA tour conflict, but this is of a more person nature. It's an entirely different kind of law, right, we're talking about defamation law, and the lawsuit seems on its face pretty frivolous and ridiculous. But I was wondering if you had some quick thoughts about that.

00:54:14
Speaker 2: Yeah, I think anytime you see a seven hundred and fifty million dollars defamation lawsuit, it should it should raise some eyebrows. And it's it's interesting because Patrick Reid, who is not the most popular guy in professional golf, if he's claiming that he's suffering seven hundred and fifty million dollars in damages because of these comments that I forget brand sham about him that he called I think the the Skip baylists of School of Broadcasting and Analysis, and so that gives you a reason for pause when you see that number. But if you look at the allegations, to prove a defamation lawsuit against a public figure, it's really really hard to do and putting aside like the specific legal s, and you can't defame someone based on your opinion. Your opinions are not defamatory. Is if you say facts about someone, they are defamatory. So one of them where I think he said Patrick Reid's ego is as big as Jupiter. That's not. You can't have a defamation claim. Nobody really thinks you are suggesting that his ego is the size of Jupiter. So it is. In some ways it looks like it. Again, it's early. Who knows. Maybe there's more. Maybe there's a smoking gun of Chambley twirling his his imaginary mustache and saying, here are the ways I can hurt Patrick Reid by saying lies about him in public but putting that aside. I think this may be more of just a pr move, and it's sort of cathartic because when athletes complain about a reporter or an analyst saying something, say, well, then sue me right, And if I'm really saying something wrong, then sue me. Okay, I'll see you, you know, And even if you don't have a chance of success, it might be Ah. It feels good. It feels good to get this out there, and it feels good for there to be a story out there that the Golf Channel and this guy in particular are bad people. And even if you don't win the case, you get to have people talking about it, right, and you get to have sort of the salacious details out there. So I don't think again, briefly reading the complaint or the headlines about it, it doesn't seem like it's has much of a chance of success. But with the right judge and the right sort of allegations, you never know. But it's a really, really high standard to meet to win a defamation case against the.

00:56:39
Speaker 1: Celebrity, And the objective might have already been achieved, as you're saying, by getting the complaint out there as something that people are reading and that's being aggregated online, and so perhaps the goal has already been achieved here.

00:56:53
Speaker 2: Yeah, and it's the win. Nobody cares if you win or lose a lawsuit. The fact that you filed it, it became public and people now know about it. And even if your case gets dismissed, people have read more about this than they ever would have in the past or otherwise.

00:57:05
Speaker 1: Have done well. Gabe, thank you so much for educating me about all of this stuff, which I didn't understand very well before and I understand much better now. Where can people find your work most easily?

00:57:19
Speaker 2: So you can follow me on Twitter at sportslog Guy, and then on my podcast not my podcast, my podcast half between the lines of podcast about sports and the law. So I appreciate you.

00:57:31
Speaker 1: Having me on of course, Thank you so much. This episode of the Frida Egg Podcast was edited by Meg Atkins. If you've been enjoying the Frida Egg Podcast, please consider leaving a rating and review in iTunes. That is one of the quickest and simplest ways to support what we're doing here. Thank you so much for listening, and I'll see you early next week.