PGA Tour and LIV Golf Seek to Drop Litigation Against Each Other

The request to a federal judge was a milestone in golf's surprise dtente, meaning the sport is now working with the Saudi wealth fund.

PGA Tour and LIV Golf Seek to Drop Litigation Against Each Other

The PGA Tour and LIV Golf, as well as Saudi Arabia's sovereign fund, asked a California federal judge on Friday to dismiss a lawsuit that brought golf's power and economic structure before the American courts.

The request for dismissal with prejudice, meaning it can't be refiled again, came less two weeks after LIV and the wealth fund that financed the tour announced a tentative partnership. The deal is not expected to close for several months, and Washington will be closely monitoring it. However, the submission made on Friday in Federal District Court, San Jose, Calif. was a significant step in the sudden detente that has occurred between the rival circuits.

The judge who is overseeing the case will likely approve this request. It's a cornerstone to the tentative agreement reached between the wealth fund and tour. LIV, PGA Tour, and wealth fund will abandon the litigation to limit the possibility of damaging revelations, and escalating legal bills. They also close off a possible avenue of recourse if this new alliance fails.

Justice Department officials who are already investigating men's professional-golf antitrust issues will be expected to examine the deal carefully and may even attempt to block or force changes. Two Senate committees are requesting information on the proposed transaction and its implications. The deal hasn't even been approved by the PGA Tour board.

The agreement is still in flux. This includes the valuations for the assets that will be included within the new venture, such as the European Tour and LIV. Jay Monahan is expected to become the chief executive of the new company, while Yasir Al-Rumayyan is likely to be the chairman. The PGA Tour is expected to have a majority on the board of the new company, but the wealth funds will be able to influence the way it's financed, giving the Saudis a significant amount of power.

The PGA Tour warned that Saudi money and influence would be a threat to golf. This led to California lawsuits which were expensive and complicated.

The bitter proceedings began in August last year, when 11 players from the LIV, including major tournament champions Phil Mickelson, and Bryson deChambeau filed a lawsuit accusing the tour of antitrust violations. LIV joined the case in late August.

The tour brought its own lawsuit against LIV for allegedly interfering with contracts between players and the company. Later, the tour received Judge Freeman’s approval to extend its case to cover the wealth fund and al-Rumayyan. This was just one of many rulings that put pressure on Saudi Arabia and their allies whose superior financial resource placed immense strain on the tour.

The wealth fund, the tour and LIV fought fiercely over the evidence collection. Many documents in the case have been redacted. But a federal magistrate court concluded that the wealth funds was the'moving force' behind the founding of LIV and its funding, oversight, and operation, undermining the fund's claim that it was just a passive golf investor.

Trials were not expected to begin until at least the next year.

The New York Times, hours before the Friday filing by the tour and LIV filed a motion asking the court to unseal the records in the case. The Times claimed that there was a "substantial, legitimate public interest" in the proceedings and their result. They also suggested that a planned partnership would make any concerns about competitive harm moot.

The Times said that if there was a competitive injury at the time the sealing took place, these justifications might not be as valid today, or after the anticipated merger of the parties. Sealing is a decision which can and should change as circumstances and facts require.