The PGA Tour and Saudi-backed LIV Golf have dropped a provision in their framework agreement that forbids poaching of golfers at the behest of the Department of Justice.
(Bloomberg) — The PGA Tour and Saudi-backed LIV Golf have dropped a provision in their framework agreement that forbids poaching of golfers at the behest of the Department of Justice.
“Based on discussions with staff at the Department of Justice, we chose to remove specific language from the framework agreement,” the PGA Tour said on Thursday. “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.”
The tweak to the June 6 framework agreement comes as regulators and lawmakers are stepping up antitrust scrutiny over the merger between the PGA and LIV, which is bankrolled by Saudi Arabia’s Public Investment Fund. While financial details of the deal are still in the works, PGA’s Chief Operating Officer Ron Price told lawmakers at a hearing on Tuesday that PIF will invest “a significant amount. North of $1 billion,” if both leagues join forces after the deal is finalized.
The clause that will be removed stated: no league would “directly or indirectly, enter into any contract, agreement or understanding with, solicit, or recruit any players who are members of the other’s tour or organization.”
After almost a yearlong bitter court battle, the rival golf leagues said they would join with the DP World Tour, the European golf circuit, and combine their golf-related business and rights into a new commercial entity. The agreement ended ongoing antitrust litigation between PGA and LIV.
Since last year, the PGA saw some of it’s top talent, including top-ranking and veteran players like Phil Mickelson and Brooks Koepka leave to join LIV Golf after being lured away by lucrative deals. The clause was a stop-gap measure to ensure that such defection would stop until a final deal was sealed.
The merger is far from done. For one thing, the deal will need to pass antitrust scrutiny and the golf leagues may likely have to make further concessions to address regulatory concerns. The temporary agreement states it will expire as soon as the circuits agree on definitive financial terms, or on Dec. 31 if they fail to do so.
Spokespersons for the DOJ and LIV declined to comment. PIF didn’t immediately respond to requests for comment outside regular business hours.
PGA’s decision to remove the non-solicitation clause was first reported by the New York Times.
(Adds DOJ, LIV response in eighth paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.