The PGA Tour and the Saudi backers of LIV Golf responded to a Justice Department inquiry by dropping a provision in their agreement that would have prohibited the poaching of players, the PGA Tour said Thursday.
The New York Times first reported 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 June 6 and signed by the PGA Tour, European tour and Public Investment Fund.
The agreement, still being negotiated and requiring PGA Tour board approval, is for the parties to form a for-profit company that would pool commercial businesses and rights. During a Senate hearing on Tuesday, PGA Tour Chief Operating Officer Ron Price said PIF would contribute at least $1 billion.
Key to the agreement was dropping all antitrust litigation, which a federal judge signed off on last month. Below that section was the non-solicitation clause that said PIF, the PGA Tour and the European tour would no longer “solicit or recruit any players who are members of the other tours or organizations to become members of their respective organizations.”
The clause was effective May 30, when the agreement was signed.
“Based on discussions with staff at the Department of Justice, we chose to remove specific language from the Framework Agreement,” the PGA Tour said in a statement. “While we believe the language is lawful, we also consider it unnecessary in the spirit of cooperation and because all parties are negotiating in good faith.”
LIV Golf signed deals reported to be $100 million or more last year when the rival league began, marquee 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 batch of defectors for the second season included Mito Pereira, Thomas Pieters and Brendan Steele.
The Times reported antitrust experts have warned the clause could violate federal law if it threatened the integrity of the labor market and promised to stifle competition for players, who are independent.
The agreement sets a Dec. 31 deadline for finalizing the deal, though both sides can agree to an extension.
LIV Golf has a set 48-man roster for this season - alternates are available for injury - so it was unlikely any player would have left for LIV until the 2024 season.
Still to be determined is the future of LIV.
PGA Tour Commissioner Jay Monahan is to be the CEO of the new company, with assets that 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.
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