Tag: LIV lawsuit

LIV Golf takes yet another legal blow in United States court, must comply with documents and witnesses for depositions

Last month a judge ruled that depositions could be conducted in Riyadh, but the new ruling sets them in New York.

After suffering a major setback via a United Kingdom arbitration panel on Thursday, the legal hits kept coming for LIV Golf on Friday, this time with regard to its antitrust lawsuit against the PGA Tour.

Judge Beth Labson Freeman ruled in the U.S. Northern District of California court that Saudi Arabia’s Public Investment Fund – the Kingdom’s sovereign wealth fund – as well as its governor Yasir Al-Rumayyan are both subject to discovery and depositions, a major blow to LIV’s legal team.

Last month U.S. Magistrate Judge Susan van Keulen ruled that PIF and Al-Rumayyan’s depositions could be conducted at a place of the Tour’s choosing in Riyadh, Saudi Arabia, but Freeman’s order overrules the previous decision made by van Keulen. The first deposition subpoenas served to PIF and Al-Rumayyan established a location in New York City.

LIV’s lawyers have appealed the decision to the United States Court of Appeals for the Ninth Circuit in order to delay the discovery process.

The original lawsuit was filed in August of 2022 by Phil Mickelson and went on to include 10 other players, but has since been taken over by LIV Golf, which is almost exclusively financed by the PIF (aside from its newly announced first global partner). The wealth fund, organized in 1971 as a means for the Saudi Arabian government to invest in various projects and companies, has been estimated to be worth over $650 billion.

The Tour then filed a countersuit against LIV. In February, the court ruled the Tour could add the PIF and Al-Rumayyan as defendants in its countersuit, dragging the financiers deeper into the judicial weeds.

So, what comes next? Antitrust cases involve not just investigating a company, but rather an entire industry. For that reason, the discovery process can be voluminous and exhausting, and the case – currently set for a Jan. 8, 2024 trial date – is just now entering the pre-trial discovery phase.

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PIF and Al-Rumayyan could comply and provide depositions and documents, though LIV lawyers have previously claimed that taking part in depositions would violate Saudi Arabian law. If they were to comply, the ramifications could have adverse effects on the PIF’s other investments in the states. Does Al-Rumayyan want to answer questions about the PIF’s motives given that LIV Golf has long been criticized as a way for Saudi Arabia to sportswash its human rights record? It’s unlikely.

They could also refuse to comply by not submitting documents or failing to meet deadlines, but that opens the door for the court to issue a ruling of contempt, which may lead to sanctions and fines that could totally upend LIV’s case.

The court hasn’t extended deadlines just yet, but previous comments in filings state that if the discovery process is delayed, the case may be, too.

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LIV Golf lawyers admit to ‘virtually zero’ revenue in 2022 in latest court filing

Earlier this week, Tour lawyers provided four reasons to delay the current trial date, extend the discovery schedule.

After spending more than $700 million to attract talent and produce its product in 2022, it shouldn’t come as a surprise that LIV Golf made little to no money in its inaugural year.

The upstart circuit led by Greg Norman and financially supported by Saudi Arabia’s Public Investment Fund is currently locked in a high-stakes antitrust lawsuit with the PGA Tour. A motion filed Monday with the U.S. District Court for Northern California saw LIV lawyers admit to “virtually zero” revenue in 2022 in an argument against the Tour, which wishes to add PIF and its governor, Yasir Al-Rumayyan, as plaintiffs in a countersuit against LIV.

Earlier this week PGA Tour lawyers provided four reasons to delay the current trial date and extend the discovery schedule for the ongoing antitrust lawsuit, a move deemed to be “exploiting litigation” by LIV Golf lawyers.

U.S. District Judge Beth Labson Freeman is overseeing the trial that is currently set for January 2024. The deadline to complete document discovery is March 30. The fact discovery deadline is May 26. Freeman will hear the arguments for and against delay on Feb. 24.

“The Tour’s motion to amend should be denied because the amendment would be futile, would cause unfair prejudice, was unduly delayed, and is obviously intended to inappropriately delay the case and resolution of Plaintiffs’ antitrust claims,” wrote LIV’s attorneys. “Delay will equally harm LIV because the Tour continues its anticompetitive conduct while the litigation is pending. The Tour has damaged LIV’s brand, driven up its costs by hundreds of millions of dollars, and driven down revenues to virtually zero.”

Eleven LIV Golf players, including Phil Mickelson and Bryson DeChambeau, filed a federal antitrust lawsuit against the PGA Tour in August of last year. Over the last six months, players have joined and dropped from the suit, and now just LIV Golf, DeChambeau, Matt Jones and Peter Uihlein remain.

In a meeting with select members of the media during its team championship last October, LIV Golf officials laid out some plans for the future and how it was going all in on the team format. The aim is for a business model that would eventually be similar to that of the NFL and other major team sports, with hopes that franchising its teams will create a revenue stream that LIV currently doesn’t possess.

Former Chief Operating Officer Atul Khosla, who has since left his position with LIV, said a successful 2023 would see 12 established teams and brands, as well as a commercialized product.

“We’ve got to get on TV, we’ve got to have corporate partners,” Khosla explained in October. “Those are successful things that we need, those are sort of milestones that we need to hit go into next year.”

LIV announced a multiyear broadcast agreement with the CW network last month, though the deal is reportedly a revenue-share where LIV won’t receive rights fees and continues to cover production costs.

LIV will return to action with the debut event of its re-branded 14-event league later this month at Mayakoba’s El Camaleón Golf Course on the Riviera Maya, Feb. 24-26.

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LIV Golf lawyers argue PGA Tour is ‘exploiting litigation’ after request to delay antitrust trial, discovery schedule

LIV Golf lawyers said “the Tour is exploiting litigation delay to choke off air to LIV and players” in a joint motion.

Lawyers for both the PGA Tour and LIV Golf filed a joint motion Sunday to the U.S. District Court for Northern California to ask for a case management conference to discuss delaying the current trial date and extending the discovery schedule for the ongoing antitrust lawsuit.

U.S. District Judge Beth Labson Freeman is overseeing the trial that is currently set for January 2024. The deadline to complete document discovery is March 30. The fact discovery deadline is May 26.

Lawyers for the upstart circuit led by Greg Norman and financially supported by the Public Investment Fund argued “the Tour is exploiting litigation delay to choke off air to LIV and players” and that the current timeframes are “not only workable, but critical to the careers of the Player Plaintiffs and the viability of LIV as a legitimate competitor to the Tour.”

Eleven LIV Golf players, including Phil Mickelson and Bryson DeChambeau, filed a federal antitrust lawsuit against the PGA Tour in August of last year. Over the last six months, players have joined and dropped from the suit, and now just LIV Golf, DeChambeau, Matt Jones and Peter Uihlein remain.

https://golfweek.usatoday.com/2022/08/03/11-liv-golfers-lawsuit-pga-tour/

The PGA Tour’s argument centers around four key reasons. From the joint motion:

  • First, the Public Investment Fund of the Kingdom of Saudi Arabia (“PIF”) and its governor, Yasir Al-Rumayyan, continue to resist compliance with the Tour’s subpoenas for documents and testimony, a dispute that remains unresolved and which will likely lead to an appeal.
  • Second, the Tour has sought leave to amend its counterclaims to add PIF and Mr. Al-Rumayyan as counterdefendants, because recently produced documents show that they played a central role in tortiously interfering with the Tour’s contracts.
  • Third, LIV, the current and former player plaintiffs, and several third parties have failed to produce key documents and, in some cases, have failed to produce documents at all.
  • Fourth, the nature of this case has significantly evolved since the Court set the current January 2024 trial date, from a case about individual golfers to a case about two competing golf leagues, substantially undermining Plaintiffs’ stated basis for an expedited case schedule.

“Given the present status of discovery (or lack thereof) from PIF and Mr. Al-Rumayyan in particular, it is not realistic for the parties to meet the current deadlines,” the Tour lawyers wrote. “In fact, PIF and Mr. Al-Rumayyan have already signaled that they are unlikely to comply with any order from this Court compelling them to provide discovery, instead indicating that they will pursue their meritless defenses through lengthy appeals.”

While the 2022 season as all about player movement, the discussion for 2023 will largely center around the various lawsuits in play. Aside from the aforementioned antitrust lawsuit, Patrick Reed has sued numerous media members and entities for defamation and a case involving LIV Golf players and the DP World Tour began in London on Monday that will clarify whether LIV players can play in DP World Tour events.

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‘If anyone is competing unfairly, it is LIV’: PGA Tour responds, countersues LIV Golf in latest legal action

The Tour is arguing LIV is using players to “free ride off the Tour and its platform.”

Another day, another lawsuit in the ongoing battle between LIV Golf and the PGA Tour.

LIV Golf and three of its players are currently suing the PGA Tour for antitrust violations, and on Wednesday night the Tour responded to and countersued the upstart circuit – led by Greg Norman and backed by Saudi Arabia’s Public Investment Fund – with some charges of its own.

While LIV alleges the Tour uses monopoly power and illegally suspended players, the Tour’s countersuit claims LIV is using players, “and the game of golf to sportswash the recent history of Saudi atrocities and to further the Saudi Public Investment Fund’s Vision 2030 initiatives.”

From the countersuit:

“Indeed, a key component of LIV’s strategy has been to intentionally induce Tour members to breach their Tour agreements and play in LIV events while seeking to maintain their Tour memberships and play in marquee Tour events like The Players Championship and the FedEx Cup Playoffs, so LIV can free ride off the Tour and its platform.

“LIV has openly sought to damage the Tour’s business relationships with its members by inducing them to breach their contractual requirements, even going so far as to pay members’ legal fees to make breaching their contracts with Tour more enticing.”

Eleven LIV players were part of the original lawsuit on Aug. 3 before Phil Mickelson, Ian Poulter, Hudson Swafford and Talor Gooch asked to be removed on Tuesday, joining Abraham Ancer, Carlos Ortiz, Pat Perez and Jason Kokrak, who all previously removed their names. LIV Golf, who joined the suit in an amended complaint filed Aug. 27., and just three players remain: Bryson DeChambeau, Matt Jones and Peter Uihlein.

More: What to consider after LIV players lose Round 1 in lawsuit vs. Tour

“The Player Plaintiffs that have remained in the case,” the argument reads, “want only to enrich themselves in complete disregard of the promises they made to the Tour and its members when they joined the Tour.”

“LIV, by its own admission, has succeeded in attracting numerous elite professional golfers to participate in its new league. LIV has held numerous events with full fields and has announced a full season for 2023. Both LIV and the Player Plaintiffs baked the financial cost of their suspensions into LIV’s exorbitant signing bonuses, making the Player Plaintiffs whole,” the document states. “Moreover, while LIV and the Player Plaintiffs challenge the Tour’s media rights and conflicting events policies as anticompetitive, LIV imposes similar – indeed far more restrictive – conditions on its players, and the Player Plaintiffs have agreed to them.

“This case is not about unfair competition – if anyone is competing unfairly, it is LIV, not the Tour. Instead, it is a cynical effort to avoid competition and to free ride off of the Tour’s investment in the development of professional golf. Plaintiffs’ allegations are baseless and entirely without legal merit.”

The U.S. Department of Justice is also investigating the Tour for its actions in combatting LIV.

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PGA Tour responds to lawsuit that would allow three LIV Golf players into FedEx Cup Playoffs, points out ‘falsehoods’

PGA Tour accuses LIV plaintiffs of ‘half-truths and falsehoods.’

After 11 LIV Golf players sued the PGA Tour last week, with three of them seeking entry into the Tour’s FedEx Cup Playoffs that start this week, the Tour on Monday sent to the U.S. District Court of Northern California a 32-page response plus a separate seven-page example of what it calls mischaracterizations and mistruths presented by the LIV players.

The court is scheduled on Tuesday to hear a complaint filed on behalf of suspended PGA Tour players Talor Gooch, Hudson Swafford and Matt Jones that seeks a mandatory injunction against the PGA Tour’s suspension of these players from the playoffs. Those three seek to be allowed to compete in the FedEx Cup Playoffs that begin with this week’s FedEx St. Jude Championship in Memphis, Tennessee. Each of those players would have qualified for the playoffs based on points had they not been suspended.

Of particular interest in the Tour’s response is that it said 98 percent of its net profits are given to players, tournaments and charities. The Tour said that allowing suspended LIV golfers to compete for FedEx Cup Playoff purses would create financial harm to players who have remained committed to the Tour.

The Tour’s response Monday and Tuesday’s court hearing involve only the topic of allowing the three players into the FedEx Cup Playoffs and do not address the larger issue of Tour suspensions of LIV Golf players as a whole — any resolution in that case likely will take months or even years. Tuesday’s hearing likely will center on whether the three players will be irreparably harmed if they are not allowed to compete in the playoffs, meaning they should be allowed to play because any lost income from the playoffs would be irretrievably lost.

NOW IT’S PERSONAL: LIV Golf’s lawsuit shatters friendly facade among PGA Tour players
MORE: Why PGA Tour make have to copy LIV

Keker, Van Nest & Peters – lead counsel representing the PGA Tour in the dispute – filed the Tour’s response to the court, with highlights as selected on the Tour’s behalf listed below. Parts of the Tour’s filing were redacted as sent to media.

  • The Tour is a membership organization that works on behalf of and for the benefit of its member players, unlike other sports governing bodies (like the NFL or NBA).
  • Members sign annual contracts committing exclusive media rights to the Tour so that that it may negotiate deals on their collective behalf (broadcast, sponsorship, merchandise, etc.). By enabling professional golfers to pool their media rights, the Tour has driven media and sponsorship money into the sport for the benefit of all Tour members.
  • Sponsorship, broadcast, and other revenues are distributed to members in the form of tournament purses, bonuses, retirement plan contributions, and other benefits. In 2021, $916 million—approximately 98% of the Tour’s net revenue—was allocated to players, tournaments, and charities. Of that, $770 million was allocated to players, including $443 million to player prize money and benefits, $110 million to player bonus programs, $17 million to Player Retirement Plan contributions, and $200 million to Player Retirement Plan earnings.  As part of their annual contract, members agree not to play in, and thereby contribute their media rights to, non-Tour golf events held in North America that conflict with PGA Tour events.
  • Despite knowing full well that they would breach Tour Regulations and be suspended for doing so, Plaintiffs have joined competing golf league LIV Golf, which has paid them tens and hundreds of millions of dollars in guaranteed money supplied by Saudi Arabia’s sovereign wealth fund to procure their breaches.
  • The Temporary Restraining Order (TRO) Plaintiffs have waited nearly two months to seek relief from the Court, fabricating an “emergency” they now maintain requires immediate action.
  • PGA Tour members and their agents were communicated with for more than year prior to the launch of the LIV Golf, and were made aware that participation would constitute a breach of contract and of the Tour’s rules.
  • TRO Plaintiffs have known since June 9—and indeed, earlier—that they would violate the Tour’s Regulations and forfeit their ability to play in the FedExCup Playoffs in exchange for accepting massive payments from LIV Golf.
  • In a telling sign, several other LIV players, including four other Plaintiffs in this case, recognize there is no emergency or irreparable harm; they too have “qualified” to play in the FedExCup but have not asked the Court for the extraordinary relief sought through this motion.
  • Unable to establish their claims based on any fair interpretation of admissible evidence, TRO Plaintiffs have resorted to mischaracterizing the record. The mischaracterizations, half-truths, and falsehoods are so numerous in Plaintiffs’ brief that the Tour couldn’t respond to all of them and instead had to create a separate chart identifying an exemplary set.
  • At the end of the day, the question is: why would a judge be convinced that these players were harmed after they were made aware of the rules and consequences, knowingly broke those rules, and now seek judicial permission to continue to break those rules? And with players making eye-popping guaranteed amounts of money, where is the demonstrated harm?
  • “The players’ participation in the LIV league is in violation of the PGA Tour’s Handbook and Tournament Regulations,” said Elliot Petersof Keker, Van Nest & Peters. “For enormous sums of cash supplied by Saudi Arabia’s sovereign wealth fund, Plaintiffs willfully breached their agreements with the PGA Tour. The players’ purported harm is entirely self-induced. We will litigate this case vigorously to preserve the reputation of the PGA Tour and protect the benefits it offers to players.”

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