It’s been a quiet winter for LIV Golf, but not necessarily in the courtroom, where recent hearings between LIV and the PGA Tour have focused on one key topic: LIV Golf’s ownership and operations.
The antitrust lawsuit is in the midst of its “discovery” phase, in which each side demands documents and files subpoenas for deposition of its opposition and potentially unrelated parties. Hundreds of thousands of documents have been exchanged between the two sides so far. This is progress. For example, LIV Golf lawyers will have access to the emails of more than 30 PGA Tour representatives. These include Jay Monahan, Andy Pazder and dozens of other representatives who may have acted on behalf of the Tour in an anti-competitive manner toward LIV.
On the other hand, there is LIV, whose corporate structure is much less clear (and also changing, because executives have left their positions in the last three months). While it was widely known that the Public Investment Fund of Saudi Arabia was the majority shareholder of LIV Golf, it was only last week that it became clear that the PIF owned 93% of LIV. The PGA Tour has access to documents that describe the governance of LIV and the relationship with the PIF, referenced as the “Shareholders Agreement”. Visitor may also see information regarding LIV budgets and PIF consent levels required to conduct business activities. The majority of these documents have remained confidential, which LIV would prefer to keep that way, for obvious reasons.
However, in any normal case taking place in an American courtroom, this type of exchange of documents could is going well. There could there will be no hiccups. Side A presents a list of figureheads on Side B from whom they wish to obtain communications. Party B agrees to some or all of this production, or none, and then provides the communications or asks Party A (and perhaps a judge) to narrow the scope of the requests. If dozens of employees at a sports league sent multiple emails every day for three years, that back-and-forth would create rooms full of documents. Scoping comes first.
The LIV-Tour costume understands most of this magnitude as well. “To the extent that the Public Investment Fund is discovered appropriately,” LIV attorney Robert Walters said in court Aug. 18, “we will find a way to cooperate with that.”
We have reached this point of theoretical cooperation, but with the end-of-March deadline fast approaching, a recent problem has arisen in the form of a non-party: PIF Governor Yasir Al-Rumayyan. There is some resistance to traditional subpoena procedures, as there is disagreement over what can be asked of Al-Rumayyan and the PIF.
The question is how much business he has conducted in the United States – the PIF has an office in New York – and to what extent his appearances at LIV events in 2022 can be considered “commercial” activity.
The question is to what extent Al-Rumayyan acted on behalf of LIV – in communications with agents like Casey Wasserman and players like Bryson DeChambeau (both cited in recent Tour presentations), or in negotiations with broadcasting executives. If he plays a major role for LIV Golf, it seems theoretically easier to convince a judge to demand documents from him, despite not being tied to an international government.
Finally – and perhaps most importantly – there is skill. Sections of Saudi law were recently presented in court, and Al-Rumayyan himself said he could face a 20-year prison sentence if he leaked confidential government documents. Al-Rumayyan also said the PIF “does not have day-to-day control over LIV Golf Inc.,” something the PGA Tour is working to combat.
Too long, haven’t you read? The PGA Tour believes there is more to learn about LIV Golf from Al-Rumayyan’s materials. They want to better understand LIV’s ownership and business structure. LIV Golf’s lawyers, as well as those of the PIF and Mr. Al-Rumayyan, wish to limit its scope.
How do they do ? With good old-fashioned negotiation. The two sides have engaged in various discussions this week and a judge has asked them to reach an agreement by Wednesday. Lawyers for PIF and Al-Rumayyan outlined five conditions that would limit the production of documents. They would prefer, citing Saudi law, that the PGA Tour limit its requests to topics specifically agreed upon and analyzed. The Tour believes that this will allow the PIF to “select the information it wishes to disclose” and would let the court rule via the analysis of an “expert paid by the PIF”.
Where does this leave us? In a “dead end” according to the Tour press release filed Thursday. According to Jodi Balsam, a sports law professor at Brooklyn Law School, we can expect a court order declaring a compromise that falls somewhere in between.