Antitrust Lawyer Confused About PGA TOUR, PGA

Antitrust Lawyer Confused About PGA TOUR, PGA

I guess that I can be a little more forgiving of casual golf fans on social media who come down hard on one side or the other of the PGA TOUR/LIV Golf controversy while apparently not knowing the basic facts about golf’s various organizing bodies. An email I recently received from Larry Klayman, a “former federal prosecutor” in the DOJ’s antitrust division shows that even otherwise intelligent folk are confused.

Klayman says that the “Professional Golf Association’s (“PGA’s”) recent actions and commentary are “tantamount to using its dominant market power to stifle competition.”

Someone should tell Klayman that The Professional Golf Association (PGA of America) is the organization that represents 29,000 club and teaching professionals. The PGA TOUR on the other hand, is the organization that stages professional golf tournaments.

I’m sure Klayman meant the PGA TOUR, but such imprecise use of language makes me suspicious of his authority on the matter.

The PGA runs the PGA Championship, but otherwise is largely divorced from the professional playing circuit.

I’m also suspicious of Klayman’s claim of “dominant market power.” How is that measured?

One way might be to see how many job opportunities are available to play professional golf.

While the PGA TOUR is the second most lucrative tour (LIV now occupies that spot, with its endless petro dollars), it is in no way the only other playing opportunity for professional golfers.

Golf is a worldwide sport.

In addition to the PGA TOUR, there is the DP World Tour (formerly the European Tour), the Japan Golf Tour (which until recently was the third most lucrative tour), the Sunshine Tour (largely South Africa), the PGA TOUR of Australasia, the Korean Tour, the Professional Golf Tour of India, the All Thailand Golf Tour, the Alps Tour, the Nordic Golf Tour, the IGT Big Easy, the PGA EuroPro, the Bushveldt, the Gateway Tour, The SwingThought Tour (formerly the Hooters Tour) and many, many others.

And of course, there now is the LIV Tour.

While there are 175 spots on the PGA TOUR for players, there are multiple times that in the number of playing spots on the other tours. If you assume that each of those other professional golf tours has 175 players, the PGA TOUR has 1/15th, or 6% of the spots for professional golfers.

Six percent of the job opportunities does not a monopoly make.

Another way might be to see if the PGA TOUR dominates in revenue. At some $2 billion a year, it is roughly on par to what LIV is reported to have spent (it should be noted that the PGA TOUR’s revenues are far below that of other professional sports leagues — the NFL, for example brings in some $60 billion).

The European Tour brought in some $800 million before it became the DP World Tour. One must assume that the DP World corporation (it’s a logistics company based in Dubai) has given it a serious infusion of money. The Japan Golf Tour is reported to be on a par with the European Tour (at least prior to DP World).

If you take just those four (PGAT, DP World, Japan and LIV), the PGA TOUR has around 25% of the revenue market. Add in the dozens of other tours, and the PGA Tour’s revenues as a share of total professional golf revenues are an even smaller percentage.

The only thing the PGA TOUR may potentially have monopoly powers over is in the attention of US golf fans. But even that is in doubt. The most watched events in golf are the Majors: The Masters, The US Open, the Open Championship and the PGA Championship.

The PGA TOUR owns — or runs — precisely zero of those events.

Furthermore, the PGA TOUR is not the same thing as the LPGA (a mistake I have seen many make). The LPGA’s tv audience, while small, is not insignificant, and when combined with the audience for other non PGA TOUR golf events diminish the PGAT’s market dominance.

In the end, I am suspicious that the PGA TOUR has a monopoly position over anything other than the imagination of male US golf fans.

And, of course, in the minds of self-important lawyers who have a tenuous grasp of the basics of golf as an international phenomenon.