PGA Tour, Saudi wealth fund removes poaching clause from agreement at the request of the Justice Department
The PGA Tour and LIV Golf’s Saudi financiers responded to a Justice Department investigation by removing a provision in their agreement that would have banned player poaching, the PGA Tour said Thursday.
The New York Times first reported on the development, which stems from the Justice Department’s antitrust review that began last summer and expanded when the PGA Tour and Saudi Arabia’s national wealth fund agreed to become business partners.
The non-solicitation clause was part of the framework agreement announced on June 6 and signed by the PGA Tour, European Tour and Public Investment Fund.
Key to the agreement was the elimination of all antitrust cases, which were approved by a federal judge last month. Under that section was the non-solicitation clause that said PIF, the PGA Tour and the European Tour would no longer “solicit or recruit players who are members of the other tours or organizations to join their respective organizations.”
The clause took effect on May 30, when the agreement was signed.
“Based on discussions with Justice Department officials, we have elected to remove specific language from the framework agreement,” the PGA Tour said in a statement. “While we believe the language is legal, we also deem it unnecessary in the spirit of cooperation and because all parties are negotiating in good faith.”
WATCH | Explaining the PGA Tour’s deal with the Saudis:
The merging of the PGA Tour and its rival, LIV Golf – a Saudi Arabian-backed startup that lured big golfers with the promise of huge payouts – has rocked the sports world. Andrew Chang explains how the unlikely merger came about, and the allegations of ‘sportwashing’.
LIV Golf signed deals reportedly worth $100 million or more last year as the rival league kicked off, big names ranging from Brooks Koepka and Dustin Johnson to Phil Mickelson and Bryson DeChambeau. The rival league added more players last August, including British Open champion Cameron Smith, after the PGA Tour season ended.
A new crop of defectors for the second season were Mito Pereira, Thomas Pieters and Brendan Steele.
The Times reported that antitrust experts have warned the clause could violate federal law if it threatens the integrity of the job market and promised to stifle competition for players, who are independent.
LIV Golf has a permanent squad of 48 men for this season – substitutes are available for injuries – so it was unlikely that any player would have left for LIV until the 2024 season.
The future of LIV has yet to be determined.
PGA Tour Commissioner Jay Monahan will be the CEO of the new company, which will include LIV. The agreement said the company would objectively evaluate LIV Golf and its prospects and potential and make a “good faith assessment” of the benefits of team golf.
