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LEGAL FEUD

LIV Golf’s Saudi backers hauled into PGA antitrust lawsuit

Joaquin Niemann of Chile during Day Three of the LIV Golf Invitational - Boston at The Oaks golf course at The International on 4 September 2022 in Bolton, Massachusetts. (Photo: Andy Lyons / Getty Images)

PGA Tour has won a ruling that lets it confront Saudi Arabia’s sovereign wealth fund and its governor head-on in its high-stakes legal feud against LIV Golf, the rival upstart backed by the oil-rich kingdom.

US District Judge Beth Labson Freeman in San Jose, California, late on Tuesday raised the stakes for the Saudi Public Investment Fund (PIF) and its governor, Yasir Al-Rumayyan, by allowing the PGA to add them as defendants to its original complaint, which alleged that LIV has interfered with PGA players’ contracts, harming the US-based tour’s brand and reputation.

The ruling brings PIF and Al-Rumayyan to the forefront in one of the biggest legal clashes in sports. It follows a decision last week by a San Jose magistrate judge granting PGA a subpoena that directs PIF and its governor to provide testimony and turn over documents.

PGA contends in the acrimonious antitrust battle that the wealth fund and its chief not only fund LIV but are actively involved in its business operations and player negotiations that have hurt the US tour. LIV’s attorneys have denied those claims.

A PGA spokesperson declined to comment. LIV’s spokesperson didn’t immediately respond to a request for comment.

LIV Golf’s attorneys had argued that the PGA’s “improper motive” behind its bid to drag the upstart’s backers into the fight was to postpone a trial set for January 2024. A potential delay could hurt golfers and LIV by allowing the PGA to carry on its alleged unlawful conduct as proceedings play out, the attorneys said.

“While the court is sensitive to the golfers’ need to earn a living during the pendency of the case, LIV has not identified how allowing the proposed amendment would cause any of the plaintiffs undue difficulty in prosecuting their case,” Freeman said in her ruling.

Any delay LIV suggests could arise from PGA’s request to amend its counterclaims may not “outlast the delay caused by the subpoena dispute” and a request LIV is expected to file challenging the magistrate judge’s order, Freeman said.

LIV won a separate ruling from Freeman granting most of its requests to seal from public view information in the PGA’s amended counterclaim and other filings.

LIV persuaded Freeman to rule that certain confidential details, which could reveal how it operates and negotiates with players, sponsors and broadcasters, remain undisclosed. That includes indemnification agreement terms and information about LIV’s shareholder agreement outlining its relationship with investors and ability to explore outside funding and a franchise model.

But Freeman found that details of “internal decision-making” that LIV sought to seal can be disclosed as they generally described certain decisions made by Al-Rumayyan. The PIF chief’s “alleged control over LIV goes to the heart of the counterclaim thus rendering the public interest in access to the information especially great”, she said in her order.

The fight between the two tours began when 11 professional golfers, including Phil Mickelson, Talor Gooch and Matt Jones, sued the PGA in August for suspending them after they signed on with LIV. LIV joined the suit a month later, prompting Mickelson, Gooch and others to withdraw from the suit. LIV claims PGA is a monopolist seeking to sabotage a competitor in the professional golf industry.

PGA countersued, alleging that LIV is competing unfairly by luring players with millions of dollars to breach their contracts.

The case is Jones v PGA Tour Inc, 22-cv-04486, US District Court, Northern District of California (San Jose).

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