Complex disputes sprout up across US organised sports landscape

In summary

This article recaps antitrust litigation and enforcement in organised US sports from January 2022 to June 2023, including recent lawsuits by student-athletes and their coaches, following the Supreme Court’s seismic 2021 decision in NCAA v Alston. Also discussed are recent challenges against Major League Baseball’s long-standing antitrust exception and FIFA’s rules governing international club football. Finally, the article highlights the potential for Department of Justice or private antitrust action against the merger between the PGA and rival-turned-partner, LIV Golf.

Discussion points

• Post-Alston follow-up lawsuits by National Collegiate Athletic Association volunteer coaches and Ivy League student-athletes
• FIFA losing at the Second Circuit, lowering the bar for Section 1 claims
• Updates on challenges to Major League Baseball’s antitrust exemption
• Litigation risk facing the PGA/LIV merger

Referenced in this article

• National Collegiate Athletic Association v Alston (2021)
• Smart v National Collegiate Athletic Association (2022)
• Relevent Sports, LLC v United States Soccer Federation, Inc (2023)
• Choh v Brown University (2023)
• Nostalgic Partners, LLC v The Office of the Commissioner of Baseball (2022)
• Jones v PGA Tour, Inc (2022)

NCAA policies continue to face challenges, including from volunteer coaches

In Alston, a unanimous Supreme Court agreed that the National Collegiate Athletic Association’s (NCAA) education compensation limits were anticompetitive.^[1] Since Alston, the NCAA has faced several lawsuits from student-athletes and coaches seeking damages stemming from the imposition of the policies that were subsequently declared illegal in 2021.^[2]

The NCAA is now facing attacks from a new group of plaintiffs: volunteer coaches. Smart v NCAA and Colon v NCAA (collectively, the Volunteer Coach Suits), are separate class actions brought by Division I volunteer coaches. The plaintiffs in the Volunteer Coach Suits allege that the NCAA is suppressing wages in the market for Division I coaching by capping the number of paid coaches a team may have, and by capping the salary of unpaid coaches at zero.^[3]

The Volunteer Coach Suits rely on Law v NCAA, in which an NCAA rule limiting the annual compensation of Division I entry-level coaches to US$16,000 was found to be a Section 1 violation.^[4] In Law, the NCAA argued that the District Court erred by failing to define the relevant market and that the relevant market was the entire market for men’s basketball coaching services, in which the NCAA made up, at most, 8 per cent.^[5] The Tenth Circuit rejected the NCAA’s argument and held that ‘where a practice has obvious anticompetitive effects – as does price fixing – there is no need to prove that the defendant possesses market power’.^[6]

The NCAA moved to dismiss the Volunteer Coach Suits, arguing that these unpaid coaches could have coached teams elsewhere.^[7] The NCAA also attempted to distinguish the NCAA by-laws capping the salaries of certain coaches in Law from by-laws capping the number of paid coaches in the Volunteer Coach Suits.^[8] This distinction is partly supported by the language in Law interpreting a Fifth Circuit ruling, Hennessey v NCAA, which upheld a rule limiting the number of assistant coaches that NCAA member schools could employ at a time.^[9] According to the Tenth Circuit, the ‘analysis of the restraint in Hennessey, which did not involve a naked restriction on price, will not control the reasonableness’ of the rule capping salaries.^[10]

The Colon coaches describe the limits on paid coaches as a ‘wage fixing conspiracy to exercise the NCAA’s admitted monopsony market power in the labor market for coaches’.^[11] The NCAA claims that the limits on the number of coaches are necessary, just like the limits on the number of players per team.^[12] Given that there is no clear precedent related to limits on the number of paid coaches, it remains to be seen how courts address these types of restrictions.

The NCAA changed its by-laws, eliminating the volunteer coach designation across Division I and increasing the number of paid coaches in each sport, from 1 July 2023.^[13] Nevertheless, the suing coaches are seeking damages for the salaries and benefits they would have received in the absence of the rule.^[14] If these suits prove successful, they may open the NCAA to further liability from volunteer coaches.

FIFA loses at the Second Circuit, lowering the standard for finding Section 1 agreement

El Clásico is perhaps the single most famous rivalry across the wide world of sport, drawing an estimated 650 million global spectators for each biannual football match between Spanish clubs Real Madrid and Barcelona.^[15] In 2017, the El Clásico ‘circus’ came to Miami, selling out Hard Rock Stadium, despite ‘nosebleed’ seats topping US$500 for a friendly pre-season exhibition game, with no implications for championships or standings.^[16]

The organiser of the match, promotion venture Relevent Sports, wanted to build on the success of the event by hosting an ‘official’ La Liga match in the United States.^[17] Official games count towards league standings and ultimately prize money, and so they draw the fiercest competition by players and teams.^[18]

But FIFA, the world governing body for football, requires that official league matches must take place in a league’s home country, in the absence of express approval by the governing body of the foreign country where the teams seek to play.^[19] In 2019, the United States Soccer Federation (USSF) officially refused to sanction Relevent’s proposed official match in Miami between the Spanish clubs.^[20] Without this approval, the foreign clubs pulled out: playing in an unsanctioned match risks ineligibility for global tournaments such as the FIFA World Cup.

On 14 September 2020, Relevent responded by suing under Section 1 of the Sherman Act, arguing that FIFA’s policy that official matches be played in home countries was an illegal horizontal market allocation scheme, agreed upon and enforced by national governing bodies such as the USSF.^[21] According to Relevent’s complaint, limiting official matches to the team’s home countries protects weaker domestic leagues, such as the USSF-affiliated Major League Soccer, from competition for fans and broadcast rights from top foreign leagues such as La Liga or England’s Premier League.^[22]

In 2021, the Southern District of New York (SDNY) dismissed Relevent’s theory for failing to plead an agreement as required under Section 1.^[23] FIFA merely announcing a policy with which the USSF was bound to comply did not constitute an agreement under the Sherman Act in the absence of any ‘direct evidence’ of the USSF directly conspiring with FIFA to enforce that policy, held Judge Valerie E Caproni.^[24]

However, in March 2023, the Second Circuit reversed the SDNY and allowed the case to proceed.^[25] The ruling impacts other antitrust challenges to organised sport by potentially lowering the bar for finding an agreement under Section 1.

Writing for a unanimous panel, the Second Circuit ruled that the SDNY erred in holding that Relevent had to allege an ‘agreement to agree’ between FIFA and the USSF.^[26] Citing NCAA v Board of Regents and Alston, the court held that a governing body, such as FIFA, adopting a binding rule is itself ‘direct evidence’ of a conspiracy with those bound to follow that rule.^[27] Relevent framed its complaint such that the challenged policy itself was the agreement, so no further evidence of some pre-existing agreement was required at the motion to dismiss phase.^[28] So long as the dominant governing body has declared the rule, and a lesser body ‘surrenders’ to that rule, ‘no further proof [of an agreement] is necessary’, explained Circuit Judge Raymond J Lohier.^[29] The panel’s reasoning adheres closely to the amicus brief submitted by the Department of Justice (DOJ), which has been independently investigating the FIFA/USSF international match ban since 2020.^[30]

The DOJ and Second Circuit’s ‘declaration-then-surrender’ formulation in Relevent lowers the bar for establishing agreement under Section 1 beyond Alston’s holding. Just as in Relevent, plaintiffs in Alston sued the dominant governing body (NCAA) and lesser, associated conferences (eg, the Big 10) for a conspiracy to restrain trade under Section 1.^[31] However in contrast to Relevent, the agreement between bodies in Alston was so clear that it was uncontested by the defendants.^[32] The member conferences voted to adopt the challenged rules via the NCAA handbook, and then enforced them on players.^[33]

A lower bar for establishing agreement under Section 1 could have broad pro-plaintiff implications across the sport industry. Most major sports, whether domestic or international, are governed by a rule-making body composed similarly to FIFA or the NCAA. If mere ‘surrender’ to a dominant body’s ‘specific policy’ constitutes an agreement under the Sherman Act, then the scope of challengeable conspiracies just expanded. Per the Court, a broad allegation of a ‘general conspiracy’ between governing body and league would not suffice, but here, Relevent challenged the specific policy concerning the approval of official games abroad.^[34] Applied elsewhere, the plaintiffs in Alston would no longer be limited to suing the NCAA and the major conferences that explicitly agreed on the specific challenged restraints, but could also join the member universities that enforce those rules. Under this ruling, those universities were members to the conspiracy to restrain wages so long as they ‘surrendered’ to the binding authority of the NCAA or their conference.^[35] Furthermore, the Second Circuit defined ‘binding’ authority broadly as well, requiring plaintiffs to only allege a ‘risk . . . of penalties’ for non-compliance, such as potential exclusion from the World Cup.^[36] As applied to universities, potential exclusion from major NCAA tournaments such as March Madness or the College Football Playoffs could fit squarely within this definition of ‘binding’.

While football fans across the United States might welcome Relevent paving the way for global stars such as Kylian Mbappé, Erling Haaland and Mohamed Salah to play official games in the US, sports governing bodies may not. This lower pleading standard will make claims against the NCAA and member universities easier to plead and prove, especially in cases arising from districts in the Second Circuit, such as the recent suit by Ivy League athletes in Connecticut, discussed below.^[37]

The Ivy League conference faces a challenge to its restriction on athletic scholarships

Choh v Brown is a class action filed in March 2023 by two student athletes at Brown University. The named plaintiffs, Tamenang Choh and Grace Kirk, were both recruited to play basketball by multiple Division I colleges and were offered full athletic scholarships.^[38] Under the Ivy League Agreement, member universities do not offer athletic scholarships.^[39] The Choh plaintiffs argued that by agreeing not to offer athletic scholarships, the universities are agreeing not to compete on price.^[40] The member universities moved to dismiss the suit, arguing that this restriction is an ancillary restraint to the product they offer: campus cultures that do not prioritise athletics and treat exceptional students equally.^[41]

The suit relies on market definitions of ‘athletically and academically high-achieving’ (AAHA) ‘educational services market’ and ‘AAHA athletic services market’, which comprises solely the Ivy League schools, or alternatively, the Ivy League plus schools such as Stanford, Duke, Rice and Notre Dame.^[42] The member schools argue that each proposed market definition fails as a matter of law, because both alleged markets exclude ‘reasonable substitutes’ (ie, other conferences).^[43] Relying on the Ivy League’s promotional materials and marketing, the plaintiffs argued that the Ivy League is distinguishable from other conferences.^[44] Further, the plaintiffs relied on the fact that the member universities are still able to recruit AAHA students despite not offering scholarships as evidence that the Ivy League is a separate market to other conferences.^[45]

According to the plaintiffs, the restrictions at issue ‘are analogous to other restrictions on collegiate athletes’ compensation, which the Supreme Court unanimously struck down in Alston’.^[46] The restriction at issue in Choh relates to scholarship limits in the context of an individual athletic conference. Given that the injunction upheld by the Supreme Court in Alston applied ‘only to the NCAA and multi-conference agreements – thus allowing individual conferences (and the schools that constitute them) to impose tighter restrictions if they wish’, Alston does not clearly favour the plaintiffs.^[47] If the suit proves successful, therefore, it would extend Alston and limit the ability of individual conferences to impose restrictions on compensation.

Challenges to the Federal Baseball Exemption

Long ago, before the National Football League (NFL) claimed the top spot as the United States’ favourite sport in 1972, the title of ‘America’s national pastime’ belonged to baseball.^[48] Major League Baseball’s (MLB) reality has looked different in recent years, with decreased viewership and labour disputes embroiling the sport.^[49] The MLB has taken steps to address these challenges, including instituting new rules, such as the inclusion of the pitch clock and larger bases, shortening games and increasing viewership and fan attendance.^[50] Further, the MLB struck an initial collective bargaining agreement with minor leaguers in March 2023.^[51] Nonetheless, baseball’s biggest concern now may be the challenges to its 100-year-old antitrust exemption. To understand the importance of these challenges, it is helpful to revisit the circumstances that created the antitrust exemption.

In the lead-up to the Supreme Court’s seminal 1922 Federal Baseball case, a Baltimore baseball club in the newly formed Federal League of Professional Base Ball Players (the Federal League) filed suit against the MLB organisation (consisting of the National League teams, American League teams and the MLB Commissioner) for conspiring to monopolise professional baseball.^[52] Specifically, the Baltimore club alleged that the MLB was illegally reducing competition in professional baseball by either buying Federal League teams or inducing them to resign their league memberships.^[53] The trial court observed that the MLB had a monopoly in professional baseball that was ‘engaged in interstate commerce’, leaving the jury to decide whether the alleged conspiracy against the Federal League existed.^[54] The jury returned a verdict against the MLB.^[55] Subsequently, the District of Columbia Court of Appeals reversed, finding that baseball was not interstate trade or commerce, as required for the antitrust laws to apply, because ‘a game of baseball is not susceptible [to] being transferred’.^[56] Essentially, although baseball players travelled for games, no action occurred until the players came ‘into contact with their opponents on the baseball field’ in one state.^[57] Thus, the antitrust laws could not apply to the MLB.^[58] After the Federal League appealed, the Supreme Court endorsed the District of Columbia Court of Appeals’ interpretation in Federal Baseball, holding that professional baseball was not within the scope of the antitrust laws because the transportation of players between states was incidental and did not affect interstate trade or commerce.^[59]

In 1952, the Supreme Court declined the opportunity to overrule baseball’s antitrust exemption in Toolson v New York Yankees when a minor league pitcher asked the Court to block a contract stipulation that required players to wait one year before signing with a new team after their contracts expired.^[60] Instead, the Supreme Court upheld the exemption, noting that even if Federal Baseball was decided incorrectly, Congress could have overruled the exemption at any point in the preceding 30 years.^[61] The Court acknowledged criticisms of its Federal Baseball opinion in 1972’s Flood v Kuhn, conceding that the exemption was ‘an aberration’ in antitrust jurisprudence.^[62] Most importantly, the Court declared, contrary to Federal Baseball, that the MLB was engaged in interstate commerce.^[63]

The Supreme Court’s inevitable recognition that baseball implicates ‘interstate trade or commerce’ means that the antitrust laws can apply to the MLB. The exemption, however, has remained relatively secure because the Court has continuously put the onus on Congress to overrule the exemption. Over the past few years, Congress has become increasingly interested in the baseball exemption, prompting a bipartisan group of US senators to write a letter in June 2022 to MLB Commissioner Rob Manfred. The letter requested information on MLB’s antitrust exemption, specifically its impact on the league’s structure and operations, as well as competition in the labour market for Minor League Baseball (MiLB) players.^[64] Manfred responded, arguing that the antitrust exemption provides benefits, such as preventing teams from moving without approval, thus providing location stability for loyal fans.^[65] Further, he contended that the exemption allows the sport to maintain the minor leagues at a wide level, because it allows MLB to subsidise baseball in communities where it otherwise would not be offered.^[66] Manfred’s response was met with scepticism from some. Senator Dick Durbin, for example, stated that Manfred’s response ‘raise[d] more questions than it answer[ed]’, and hinted at a Judiciary Committee hearing on the issue.^[67] Nevertheless, the Judiciary Committee hearing did not come to fruition.

Representative Jeff Duncan of South Carolina introduced the Teddy Roosevelt Fair Competition and Public Trust Act of 2023 in the House of Representatives in January 2023.^[68] The Act provides that ‘antitrust laws shall apply to the business of providing for profit public baseball games between teams of professional baseball players and to leagues composed of teams of professional baseball players’, eliminating the Federal Baseball exemption.^[69] However, Congress has not acted on this bill since referring it to the House Committee on the Judiciary.^[70] The biggest question remaining is whether the Supreme Court’s ruling in Alston is a signal that the Supreme Court might finally consider overruling the exemption.^[71]

One challenge to the exemption, Nostalgic Partners, stems from the MLB’s overhaul of its minor league system. The MLB sought to ‘dramatically improve’ MiLB stadiums and facilities while simultaneously taking direct control over which teams were ‘officially’ affiliated with MLB teams.^[72] From 1903 to 2020, the MiLB and MLB shared the Professional Baseball Agreement (PBA), which governed their relationship.^[73] Under the PBA, MLB clubs could have up to six affiliates.^[74] When the new plan took effect in late 2020, the maximum number of MiLB affiliates was reduced to four, and the number of affiliated MiLB teams declined from 160 to 120.^[75] Four of the now unaffiliated teams (collectively, Nostalgic Partners) filed an antitrust complaint against the MLB in December 2021, alleging an illegal horizontal agreement to ‘reduce output and boycott the 40 Ousted Teams from MLB affiliation’.^[76] The MLB argued that its minor league revision has several pro-competitive efficiency justifications, including new ‘10-year guaranteed contracts’ between MiLB and MLB teams, improved scheduling options and the ‘prospect of investment in player development and facilities’.^[77] MLB officials also claimed that reducing the number of teams will improve pay for remaining minor league players.^[78]

The SDNY dismissed the Nostalgic Partners challenge in October 2022.^[79] The District Court judge found that although Nostalgic Partners established antitrust standing and adequately pleaded an antitrust violation, ‘until the Supreme Court or Congress takes action, the [baseball] exemption . . . shields MLB from [the] lawsuit’.^[80] The Nostalgic Partners challenge to the baseball exemption was appealed to the Second Circuit. According to Nostalgic Partners, their lawsuit is an ‘opportunity to rein in [the] abuse’ of the ‘unparalleled market power MLB uniquely enjoys due to this court-created immunity’.^[81] Nostalgic Partners asked the Second Circuit to affirm the District Court’s holding that they plausibly plead a Sherman Act violation, that ‘fails only because this Court is currently bound to apply an “unrealistic,” “inconsistent,” and “aberration[al]” antitrust exemption’.^[82] Nostalgic Partners conceded that the conduct they allege falls within the scope of the Federal Baseball exemption, and they intend to ask the Supreme Court to overrule the baseball exemption.^[83]

The DOJ filed a brief to the Second Circuit as amicus curiae, describing the importance of baseball in US life. Lauding the benefits that competition generates for fans, players and other trading partners, the DOJ described the MiLB as a ‘vital source of jobs, tourism, and affordable entertainment’.^[84] Given that Nostalgic Partners conceded that the conduct they allege falls within the scope of the Federal Baseball exemption, the DOJ argued that the court does not need to resolve the exemptions ‘precise contours’.^[85] Quoting the Second Circuit’s characterisation of the rationale of the exemption as ‘extremely dubious’, the DOJ reaffirmed its position that the Federal Baseball exemption should not be extended.^[86]

MLB asked the Second Circuit to affirm the District Court’s dismissal under the baseball exemption and other grounds, arguing that the Court of Appeals should ‘confirm that [Nostalgic Partners’] grievances do not add up to a viable antitrust claim even setting aside the exemption’.^[87] In response to MLB’s attempts to re-litigate whether Nostalgic Partners have a viable antitrust claim, Nostalgic Partners accused MLB of ‘re-raising failed arguments to muddy up the certiorari record’.^[88] MLB raised issues already rejected by the District Court. For example, MLB again relied on Gatt Communications, Inc v PMC Associates, LLC, to argue that Nostalgic Partners ‘cannot seek remedies for being excluded from a system that they believe was itself unlawful’.^[89]

Gatt Communications arose after Gatt, a past participant in an alleged bid-rigging scheme involving Vertex products, brought suit against alleged co-conspirators for losses arising out of Gatt’s exclusion from the scheme.^[90] Gatt was a licensed dealer of Vertex radios and equipment.^[91] After Gatt submitted a rogue bid, Vertex terminated Gatt’s Vertex dealership, which was subject to termination by either party without cause.^[92] Gatt’s alleged injury was ‘the harm it suffered as a consequence of its inability to continue selling Vertex products’.^[93] The Second Circuit held that ‘[t]his harm only supports antitrust injury . . . if it flows from that which makes the bid-rigging scheme unlawful’.^[94] The court held that because Gatt’s injuries arose from ‘its participation and then exclusion from [a scheme] in which [he] had no right ab initio to participate’, Gatt failed to establish antitrust standing.^[95] The SDNY distinguished Nostalgic Partners from Gatt Communications. In Gatt Communications, the anticompetitive act was the bid-rigging scheme, not Gatt being excluded.^[96] Thus, the anticompetitive act harmed the purchasers of Vertex products, not Gatt.^[97] In contrast, the anticompetitive act in Nostalgic Partners prevents Nostalgic Partners from competing for affiliations and prevents MLB from competing to affiliate with more MiLB teams.^[98] According to the SDNY, Nostalgic Partners’ injury, their inability to compete for MLB affiliations, is directly linked to the anticompetitive act.^[99]

The Second Circuit swiftly affirmed the SDNY’s dismissal of the suit under the baseball exemption, stating that they ‘must continue to apply Supreme Court precedent unless and until it is overruled by the Supreme Court’.^[100] In a brief footnote, the Second Circuit declined to ‘opine on other, non-dispositive issues’, thus rejecting MLB’s attempt to re-raise prior arguments.^[101] This dismissal paves the way for Nostalgic Partners to finally petition the Supreme Court for certiorari, and for the highest Court to potentially overrule the 100-year-old baseball exemption.

PGA and LIV Golf merge, ending antitrust battle, but starting others

On 6 June 2023, the PGA and LIV Golf shocked the world of sport by announcing the end of a bitter antitrust suit and the beginning of a joint venture, promising to unite the world of golf ‘under one umbrella’.^[102]

The merger comes after a year of LIV executing a strategy to attract players with large event purses on the one hand, and the PGA enforcing its restrictive covenants on the other. This led to strange results, such as on 21 May 2023, when Brooks Koepka won the PGA Championship, the PGA’s marquee event, despite the fact that he was been banned from all other PGA Tour events due to his relationship with LIV Golf.^[103]

From an antitrust perspective, the deal faces some headwinds. In its lawsuit against the PGA in 2022, LIV Golf referred to its new partners as a ‘long-standing monopoly’,^[104] a ‘monopsony’^[105] that ‘[employs] its dominance to craft an arsenal of anticompetitive restraints’,^[106] and for which ‘no other golf tour in the world is a reasonable competitive substitute’.^[107]

Furthermore, high-ranking professional golfers may have reason to sue under antitrust law. LIV’s strategy benefited top golfers by increasing purses by 47 per cent and several top stars inking nine-figure deals.^[108] They will argue that this provides them with standing as private parties to block the deal under Section 7 of the Clayton Act.^[109]

Finally, antitrust regulators could also seek to block the deal. Only a week after announcing the joint venture, the DOJ Antitrust Division announced a formal investigation into the agreement.^[110] The DOJ has been investigating the PGA since 2022 for its response to the emergence of LIV.^[111]

The PGA and LIV, however, have several avenues to argue that the deal is pro-competitive. First, courts have long acknowledged that sport is a unique industry from an antitrust perspective because, unlike most industries, some amount of horizontal restraint is necessary for the product to exist.^[112] Broadcast rights are a prominent example previously endorsed by the Supreme Court.^[113] Notably, the deal between PGA and LIV is not technically a merger, but instead a consolidation of media rights into a single entity.^[114] This arrangement may indicate that PGA and LIV will try to adhere closely to the precedent supporting horizontal agreements on joint broadcasting rights.

The PGA may also argue that the merger is a win for consumers, allowing fans to watch the best players face-off head-to-head again. In sport, the product is the competition. Unlike monopolies in other industries, sports leagues have strong incentives to maintain fierce competition among participants within their closed systems to spur fan interest.^[115] As monopsony buyers of golf talent, the PGA would be incentivised to keep player pay high to encourage its best players to face-off more often, a stark difference from ordinary monopolies, which typically depress output.^[116] Most other professional sports, such as basketball, are already organised as single entities (eg, the National Basketball Association (NBA)), and yet still manage to maintain high output and high pay.^[117]

In fact, the history of the NBA may be instructive here. In 1970, Milwaukee Bucks point guard Oscar Robertson sued to block the merger between the NBA and the American Basketball Association (ABA), arguing that the horizontal merger would negatively impact the players’ ‘competitive advantage’ in negotiating higher salaries with the rival league.^[118] Robertson ultimately settled with the NBA, allowing the merger to go through in exchange for the much more player-friendly ‘free agency’ system still in place today.^[119]

The NBA/ABA merger was indisputably great for fans. The years after the merger saw the rise of superstar rivalries in the NBA, such as Magic Johnson and Larry Bird, which dramatically increased the popularity of the sport throughout the 1980s.^[120] Consistent, high-stakes rivalries between all-time greats are only possible where leagues concentrate talent into single entities.^[121] Similarly, LIV and PGA will argue that golf will offer a more compelling viewing experience with all the best players in a single tournament, rather than spread across several channels. The PGA will need to offer a more compelling product if it hopes to reverse its decades-long rating slump.^[122]

The PGA/LIV analogy to the NBA/ABA merger is not perfect, however. Unlike in the NBA, tour players are already able to freely negotiate payment as independent contractors and are much less organised than the powerful NBA’s Players Association. Furthermore, golf is an individual sport, meaning the interests of the best players often sharply diverge from the interests of lower-ranked players. These structural differences between basketball and golf make collective action against the PGA much less likely. This means that top golfers might have a huge incentive to sue to block the merger, owing to lost bargaining power, but less incentive to ultimately settle as a group like Oscar Robertson and company did in 1977. These suits will unlikely represent or pursue the interest of lower-level pro golfers, however.

PGA and LIV will also try to demonstrate that the new tour competes not only in a market for professional golf but also in the much broader market for sport entertainment. In that market, merging the talent into a single tour will give the fans what they want, and may help them compete more effectively against the NBA, the NFL and other sport entertainment properties.

^* The authors would like to thank Nathalia P Kimmell and Jack D Oberg, who were summer associates in Axinn, Veltrop & Harkrider’s antitrust department, for their assistance with this article.

Notes