re: PGA Tour disciplines golfers 'who have decided to turn their backs' on PGA for LIV

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The law is very clear (for tax and insurance purposes) that an independent contractor cannot be prohibited from working for others, elsewise, that person is actually an employee, not an independent contractor. Severe tax implications coming up.

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Still, do event denials and suspensions and bans violate antitrust laws?

Heitner asserts the tour is operating within the law. “I do not believe [the tour is violating antitrust laws], since the player has other options to compete, which is the basis for the ban itself,” Heitner explains. “The PGA Tour is a non-profit organization that has the right to exclude individuals from its ranks as long as it abides by its own policies, provides no preferential treatment, and does not act in a discriminatory manner.”

However it may not be that definitive, says Allen. Unlike Major League Baseball, which infamously received an exemption from the Sherman Act (which prescribes the rule of free competition among those engaged in commerce in the United States), the PGA Tour has to abide by the law and any argument against a ban would use antitrust as the heart of its counter.

“To make such a case, that would require a player to show, No. 1, that the tour has monopoly power in a market and, No. 2, that the PGA Tour is trying to maintain that power through means other than having a superior product or business savvy,” Allen says.

Allen notes this is not new ground for the PGA Tour. In 2015, a class-action lawsuit was brought by caddies against the tour using antitrust and intellectual property claims, an effort that proved unsuccessful. “Prevailing in an antitrust lawsuit is much more complicated because the plaintiff would have to establish many things, but most importantly, a threshold requirement: defining the market,” Allen says. “That’s where the caddies lost.”

Allen also mentions the tour could face heat not just from players but the Federal Trade Commission on antitrust claims. In fact, the FTC concluded after a four-year investigation in the early 1990s that the tour had violated antitrust laws—partially due to the aforementioned rule stipulating permission for a conflicting-event release—and recommended federal action. But no action was ultimately taken, a circumstance credited to the work of then-tour Commissioner Tim Finchem (a lawyer himself who worked in President Jimmy Carter’s administration) and the tour’s lobbying mastery. Coincidentally, this clashed with Greg Norman’s first try to challenge the PGA Tour through his attempt to launch the World Tour.

Back to the present. There is another point to a theoretical antitrust claim that is unique to the tour. That would be the tour’s status as a charity—a status that has garnered plenty of scrutiny in itself. That circumstance, though, does not necessarily apply in this case. All entities, be it for profit or not, are subject to the Sherman Act, but the PGA Tour is a 501(c)(6) non-profit, which is different from the more commonly known 501(c)(3) entity. Organizations that are 501(c)(6) are typically entities such as business associations, chambers of commerce and sports leagues. Basically, as long as the entity’s actions are taken to benefit the association or its line of business, the entity is operating within the IRS Regulations. And as an extension, any rumblings that this could jeopardize the tour’s tax-exempt status are misguided.

“To lose that status, the PGA Tour would have to do something to benefit one individual as opposed to its line of business, and I do not believe a ban of a player or players falls into this category,” Allen says.

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