Michael Miranda
Web Editor, Delaware Journal of Corporate Law, Volume 50
Introduction
In the world of professional sports, contracts are everything. The introduction of LIV Golf (“LIV”) has not only disrupted golf viewership and fan satisfaction but has also enabled players to break away from their engagements with the PGA Tour (the “Tour”) without any ascertainable penalty. This blog will assess what claims the Tour could bring against golfers who abruptly broke agreements with the Tour, and how such claims may be used as leverage against LIV in negotiations to reunite the Golf world.
Changing of the Guard
Questions have circulated around LIV contract structure, player payment schedules, and how their name, image, and likeness rights may be limited.[1] Once LIV reaches out with interest in a player, they make a lucrative lump sum offer that is generally bigger than the earnings a Tour player would earn throughout a single year, and for some, even in their whole career.[2] LIV golfers are extremely regimented in what events they must attend; the non-negotiable list includes Pro-Am and corporate events that LIV holds, as well as “service days” that are purely self-serving for LIV.[3]
Conversely, golfers qualified to play on the Tour are treated as independent contractors and do not sign a contract with the Tour. However, golfers playing on the Tour still must adhere to the rules that are set forth in the PGA Tour Players Handbook.[4] These rules discuss membership on the Tour, eligibility, tournaments, marketing, player conduct, and disciplinary proceedings.[5] Players must also agree to abstain from playing in any external competition when a Tour event is held.[6] Since there are such limitations, many do not view players on the Tour as true independent contractors, citing the blurred lines between independent contractors and actual employees.
Negotiations are well underway to reunite Golf’s stars under one entity. Since his election, President Donald Trump has held meetings with Jay Monahan (PGA Tour CEO), Tiger Woods and Adam Scott (PGA Tour Player Representatives), and Yasir Al-Rumayyan (Governor of Saudi Public Interest Fund).[7] While no unification has been inked, advancements have been made reflecting a possible deal that would fairly compensate Golfers while they play in one common event on a week-by-week basis.[8]
How They Would Fare in Delaware
The LIV model, despite its downfalls, has become so enticing to golfers to the point they have broken their existing agreements with the Tour. Scholars and fans have asked first, if this is legal, and second, how could golfers abruptly leave the Tour without facing any repercussions?
Contracts governed by Delaware law inherently include the implied covenant of good faith and fair dealing.[9] In Leaf Invenergy Co. v. Invenergy Wind, LLC, the Delaware Court of Chancery held that the implied covenant of good faith and fair dealing serves as a gap filler to ensure expectations of the parties are carried out when unforeseen circumstances arise.[10] In Leaf Invenergy Co., the Chancery Court elaborated on the multi-step process it uses to discern whether an implied covenant analysis ensues: “(1) determination of the existence of a gap; (2) determination of whether the circumstances warrant filling that gap; and (3) if necessary, crafting of the appropriate term to fill that gap.”[11]
While the Court in Leaf Invenergy Co. warns that the doctrine is applied sparingly,[12] the defecting players acted in bad faith, and in violation of the Tour Handbook. To prove a breach of the implied covenant, the Tour would have the burden to show: (1) “a specific implied contractual obligation; (2) a breach of that obligation by the defendant; and (3) resulting damage to the plaintiff.”[13]
Players acted without warning to the Tour and freely signed to contract with LIV.[14] Such players immediately stopped play for the Tour, and many defected to LIV in the middle of a season or just prior.[15] This left the Tour without a significant segment of the talent it relies on each week and damaging the product that the Tour puts out to its consumers – the yearly event schedule and offerings.[16] Consequently, the Tour experienced financial woes, and their reputation as the world’s premier golf league was irreparably harmed.
Here, the Tour can demonstrate breach of an implied covenant with relative ease: (1) an implied term via the Tour’s Handbook that players will not cease all play for the entity; (2) a breach of that implied duty in leaving the Tour without notice, and for a direct competitor; and (3) ascertainable damage to the Tour in money and in equity. Delaware Courts, if prompted to render a decision, may hold that the defecting players would be liable for failure to carry out their obligations under the Tour’s Handbook.
Pick Your Poison
The Tour model is a necessary evil to preserve a league of prestige that needs structure and reasonable limitations on the amount they can award to winners of their tournaments. LIV is also a necessary evil–competition for a Tour that many have seen as outdated, stuck in their ways, or archaic. It remains to be seen whether the Tour will go through with extensive litigation or use these issues as a bargaining chip to find what feels like an inevitable resolution between the leagues. If they do use potential breaches as a force in negotiations, LIV may have to acquiesce on material terms such as naming rights and structure of tournaments or could be induced to contribute more money into the venture. Until that time comes, players, at their own risk, must choose their path on a divided road in a space filled with uncertainty as to where golf will go next.
About the Author
Michael is a third-year law student at Widener University Delaware School of Law and will be sitting for the July 2025 Delaware Bar Exam. Michael is the Web Editor for Volume 50 of the Delaware Journal of Corporate Law. He graduated from Saint Joseph’s University in 2022, earning his bachelor’s degree with a major in Entertainment Marketing. While in law school, Michael currently works at Reger Rizzo and Darnall in Wilmington, Delaware as a Law Clerk. After graduating from law school, Michael plans to pair his skills in negotiation and interests in Entertainment and Sports with applicable fields of law and practice law in Wilmington, Delaware, and Philadelphia, Pennsylvania.
[1] See Mark Schlabach, What’s Inside the Released LIV Golf Rules, Regulations and Player Contracts, ESPN (Sept. 14, 2022 2:38 PM), https://www.espn.com/golf/story/_/id/34591827/released-liv-golf-rules-regulations-player-contracts.
[2] See Joseph McBride, 6 Biggest LIV Golf Contracts as Jon Rahm Leaves Phil Mickelson Behind With Record Deal, Mirror (Dec. 9, 2023), https://www.mirror.co.uk/sport/golf/jon-rahm-liv-golf-contract-31633909 (explaining the deals given to the biggest superstar athletes that have gone from the PGA Tour to LIV).
[3] Ryan Herrington, LIV Golf Contracts Offer Big Money, but Include Big Restrictions, According to Report, GolfDigest (Aug. 18, 2022), https://www.golfdigest.com/story/liv-golf-contract-specifics-wall-street-journal-report.
[4] PGA Tour 2022–2023 Player Handbook & Tournament Regulations, PGA Tour,https://qualifying.pgatourhq.com/static-assets/uploads/2022-2023-PGA-TOUR-HBandRegs-DEC%202022.pdf.
[5] Id.
[6] Id.
[7] Gabby Herzig, PGA Tour Commissioner Jay Monahan Meets with Donald Trump Amid PIF Negotiations, The Athletic, https://www.nytimes.com/athletic/6119248/2025/02/06/donald-trump-pga-tour-jay-monahan-pif/ (Feb. 26, 2025).
[8] See id. (“Thursday’s release from the PGA Tour could be a sign political forces are playing a significant factor in the completion of the deal”).
[9] See Mohsen Manesh, Express Contract Terms and the Implied Contractual Covenant of Delaware Law, 38 Del J. Corp. L. 1, 10 (2013); see also Leaf Invenergy Co. v. Invenergy Wind, LLC, 2018 WL 1882746, at *34 (Apr. 19, 2018) (“Under Delaware law, the implied covenant of good faith and fair dealing attaches to every contract”) (reversed and remanded on the issue of which theory of damages should be applied).
[10] Leaf Invenergy Co., 2018 WL 1882746, at *34.
[11] Id. at *37.
[12] See id. (“Invoking the doctrine is a ‘cautious enterprise.’ Implying contract terms is an ‘occasional necessity . . . to ensure [that] the parties’ reasonable expectations are fulfilled.’ Its use should be ‘rare and fact intensive, turning on issues of compelling fairness’”).
[13] Id.
[14] Tim Daniels, PGA Tour Says LIV Induced Contract Breaches with “Astronomical” Money in New Lawsuit, Bleacher Rep. (Sept. 29, 2022), https://bleacherreport.com/articles/10050651-pga-tour-says-liv-induced-contract-breaches-with-astronomical-money-in-new-lawsuit#:~:text=ESPN’s%20Mark%20Schalch%20reported%20Thursday,golf%20to%20sportswash%20the%20recent.
[15] Id.
[16] Id.
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