Justice Department Forces PGA Tour, LIV Golf to Change Agreement to Allow Players to Move Between Tours

The PGA Tour and LIV Golf had agreed to stop poaching players as part of their framework agreement, but the Justice Department demanded that the clause be dropped from the deal.

The PGA Tour and the Public Investment Fund of Saudi Arabia have agreed to remove the non-solicitation clause of the recently announced framework agreement per a request by the Department of Justice.

The decision to remove the clause was first reported by the New York Times and confirmed by Sports Illustrated.

As part of the DOJ’s antitrust review of the PGA Tour that started in 2022, which is looking into the PGA Tour and LIV antitrust concerns, the framework agreement was sent to Justice at some point between the date of execution, May 30, and the June 6 announcement.

After a review of the agreement by Justice, a letter was sent to the PGA Tour and PIF on July 6, asking for a removal of the non-solicitation clause. The PGA Tour and the PIF agreed to do so in a July 12 response letter.

The clause was one of the only definitive parts of the framework agreement, which forms the basis for the two sides reaching a definitive agreement by their self-imposed deadline of December 31.

Removing the clause will likely have little impact on the tours, as it's unlikely that any PGA Tour player, especially those LIV might covet, would want to leave the PGA Tour with the lucrative FedEx Cup playoffs starting on August 10th in Memphis and a Ryder Cup berth available shortly thereafter.

Also, it would make little sense for LIV to make any overtures to a player while the PIF negotiates an agreement with the PGA Tour.

The framework agreement effectively ended all hostilities between the parties and outlined a framework for a for-profit entity in which all parties would have ownership interest and into which they would transfer their assets. The company today is known as NewCo.

Since the announcement of the agreement, one provision of the agreement was executed: the settlement of litigation.

In section six of the framework agreement, titled Settlement of Litigation; Non-Solicitation, section a, both sides withdrawing from all litigation both at the Federal District Court level and the Ninth Circuit Court of Appeals was addressed.

The dismissals by both sides were voluntary and with prejudice, which means they can no longer be litigated as a cause of action.

On July 12, Section b, non-solicitation of the framework agreement is what was removed, per the request by Justice.

b. Non-Solicitation, From the date of this Agreement, subject to Paragraph 10 hereof, PIF, PGA TOUR and DP World Tour each agrees that it will not, and will cause its affiliates (including LIV, but not including for these purposes the Asian Tour or the MENA Tour to the extent PIF does not control these entities) and other representatives on its behalf not to, 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 to become members of their respective organizations or any other golf league or to participate in golf events hosted by any other golf league, or to terminate their membership with LIV, the PGA TOUR or the DP World Tour, as applicable.

In response to the news, a PGA Tour spokesman provided SI with the following statement:

"The Framework Agreement sets the stage for an exciting future for professional golf that re-establishes competition at the highest levels of the sport and creates the biggest stage for everyone — players, sponsors, and fans. Based on discussions with staff at the Department of Justice, we chose to remove specific language from the Framework Agreement. 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."