Sport: Participation in LIV Golf ruled out of bounds

Golf, one of many great sports given to the world by us Scots, has long had professional events operated on the basis of various “tours”, allowing golfers of skill and ambition to renounce their amateur status, declare that they seek to make a living from the sport, try to obtain (and qualify for) a “tour card”, and ultimately compete for prize money as independent contractors. 

Leaving aside opportunity and the outlays required to achieve a life of chasing a wee white ball around various terrains in all weathers, golf has long held itself out as an example of true sporting meritocracy: if a player was good enough and performed sufficiently well, they could earn their “card”; earn sufficient prize money; earn a spot at the grander tournaments (including the four majors); and gain the chance to achieve more sporting success – and personal reward. 

To protect the opportunity for this individual pursuit of success, rules of participation, as in any sport, have become ever more important for the collective interest, securing the collective will of regulated behaviours, fairness and a platform for commercial exploitation, to generate sporting interest and commercial return for participants. The two main recognised “tours” (the PGA European Tour, branded as the DP World Tour, and the US PGA Tour) are sophisticated businesses that are in essence collective organisations existing for the benefit of their members – golfers on tour, past and present. New players qualify each year; those who earn too little lose their playing rights and leave, to play in lesser tours or not at all. As such, the European Tour is not a regulatory body for golf. 

Disruptor

LIV Golf, created by virtue of the Saudi Arabian Public Investment Fund, differs. As an invitation-only organisation, golfers signed up to play a set number of events, being paid significant sums to join (reportedly up to $200 million for one golfer), with substantial prize money also on offer for all, from first to last. This alternative tour caused significant disruption when golfers joined, as some resigned their current membership of existing tours, while some maintained their membership. In the case of Ian Poulter and 15 other members of the European Tour, who did not obtain requisite permission from the Tour to participate in the first LIV Golf events, significant fines were imposed, leading to interim relief being sought by the players, and granted in July 2022, on appeal to Sports Resolutions, the procedural route provided in the Members’ General Regulations Handbook (governed by English law). 

The substantive appeal (SR/165/2022) was heard in February 2023, with the decision recently published, in favour of the European Tour, following a de novo hearing of the substantive matter between the parties. Such a de novo hearing was provided for in the regulations, allowing the Tour to, in effect, cure the asserted procedural deficiencies in the first instance decision-making. The golfers were found to have committed “serious breaches” of the Code of Behaviour and Regulations as, by playing despite their release requests having been refused, their actions were directly contrary to the express behavioural rules agreed among the members. Within the regulations, a framework for consideration of release existed; it allowed, amongst other things, the wider interests of the European Tour to be considered when weighing up a release request.

Collective good

While the case was a landmark in golf and has helped further draw divisions between those on perceived rival tours, the appeal determination is notable, as central to the golfers’ defence was that they were entitled in law to participate in the rival tour, as the regulations and resultant disciplinary procedures were unlawful, unenforceable and/or void. Arguments focused on restraint of trade, UK competition law and separately breach of contract (through excessive exercise of discretionary power). 

In a lengthy 87 page judgment these arguments were dismissed, primarily on finding that the regulatory framework created for the collective good of the European Tour members was not unreasonable, was justified and did not in fact stop the golfers from practising their trade. It protected the interests of the members. Interesting analysis noting LIV’s competitive nature (to try to compete with the European and US PGA Tours) was reflected in rejection of the arguments further to s 2 of the Competition Act 2008: the regulations were not anti-competitive by object or effect. Arguments as to unreasonableness in sanction were quickly rejected by the appeal panel. 

A widely reported indemnity is said to be in place protecting the golfers from any personal financial consequences. All but one of the players are reported to have paid their fines, with the European Tour said to be taking enforcement action, the award of Sports Resolutions being enforceable as an arbitral award. 

A separate anti-trust case is due to be heard in the USA in 2024, revolving around LIV golfers and the USPGA tour.