Augusta National was in the news again last week, but not in the way it would prefer.
The Wall Street Journal reported that the U.S. Department of Justice’s antitrust division is investigating the PGA Tour for antitrust violations, and in the process has included looking into Augusta National Golf Club and the United States Golf Association (USGA).
In August, 11 members of the new Saudi-backed LIV golf tour filed suit against the PGA, saying among other things that the tour had colluded with Augusta National to keep players from participating in tour events. Although it was not immediately clear why the DOJ was investigating the golf entities, it appears it stems from the allegations in the suit filed by the golfers against the PGA.
The Federal Government enforces three major Federal antitrust laws, and most states also have their own. Essentially, these laws prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for products and services.
Most major sports leagues have faced antitrust investigations in the past. The PGA Tour faced an extensive antitrust investigation in the early 1990’s and, although the report recommended enforcement against the tour, no action was ever taken.
The suit against the PGA Tour – filed by Phil Mickelson, Talor Gooch, Hudson Swafford, Matt Jones, Bryson DeChambeau, Abraham Ancer, Carlos Ortiz, Ian Poulter, Pat Perez, Jason Kokrak, and Peter Uihlein – alleges that before the LIV Tour began this year, the PGA Tour was the only meaningful option for golfers playing at the highest levels, yet the tour doesn’t compensate the golfers from their revenues at the level of athletes in other sports. Then, when the LIV Tour began, it further alleges that the PGA used its power to restrict the options of golfers, even though they have the status of independent contractors.
Among the many citations of examples of this, the lawsuit alleges that Augusta National and chairman, Fred Ridley have played a part. It accuses the PGA of pressuring Augusta National “to do its bidding.”
In addition, the suit alleges the PGA used similar pressure tactics to convince the other three Majors, the Ryder Cup, and the European Tour to ban any players who joined the LIV Tour.
The PGA Tour has countersued, alleging that it is LIV that is competing unfairly and is taking a free ride on the Tour’s investment into developing professional golfers.
