Could the LIV golfers have changed the world? Exploitation of leverage in procurement. | Dunlap Bennett & Ludwig LLC

The current debate in golf is simple when you go, is someone going or not? How much money do they take? Will this end the PGA? Is a merger won in advance? [1]

A more complex question worth debating is “what if?” What if in the United States sports matters were not relegated solely to personal interests? What if, instead of arguing over which side of the pie athletes should have versus owners, the questions were deeper about the obligations of those who operate not just a business but an element of public trust – a sports franchise or a sports league/tour with accompanying tax breaks, public subsidies and huge amount of media coverage.

Is there an additional obligation? With public funding of possibly private stadiums and fiscal arrangements, is there a corresponding obligation financially or via public relations to try to influence change? For a sport like baseball with an antitrust exemption conferring a monopoly free pass unavailable to any other American business, is there a cost, or are the public just lucky to be able to subsidize teams with their public dollars to be able to support them with their private dollars?

But that conversation is for another day.

The purpose of this article is to focus on the current steel cage match between the PGA and the Saudi-funded LIV Golf Tours.

More specifically, falling into this broader debate about sports league obligations is whether golfers and broadcasters have traded a one-time opportunity to pursue lasting change on the world stage in exchange for a handful (well, any a few handfuls) of dollars.

Often in procurement, when one party has a desperate need and the other party has unique resources to meet that need, the party with unique resources can exploit leverage. [2] not only to improve their personal performance, but also to bring about broader change. For ordinary contracts, this change may be a construction or lease concessions, it may be a waiver of a personal guarantee, right of first refusal or favorable payment terms. But to be clear, leverage exists where there is clear supply and demand. Leverage increases as supply becomes non-fungible.

Greg Norman’s Saudi-funded LIV Tour has had a rocky climb to gain a foothold in the world of golf. This ramp-up included player deals that would give the tour the required competitiveness and sought-after credibility.

But the real slope on the hill was not the sports contracts, it was that the Saudis were starting from a position of weakness in all respects excluding financing. To sum up, it is widely believed that the Saudi government ordered the murder and dismemberment of Washington Post journalist Jamal Khashoggi. [3] That and an interesting, shall we say, approach to human rights caused then-presidential candidate Joe Biden to call Saudis pariahs. [4].

Of course, the economic situation in the United States and gas prices, coupled with the fact that the Saudis sit atop one of the largest oil reserves in the world, have made the outcasts a top economic partner in the world. over the past two weeks. Yet even those who believe that practical considerations of foreign policy sometimes trump principles of human rights have struggled to accept the idea that individuals, whether musicians, actors, comedians or now golfers, personally profit from a despotic regime rather than macroeconomic decisions. supposedly benefiting the whole (or, as a cynic would say, the coffers of a corporation or a political party, or simply the members of both political parties vying for re-election).

But what if, rather than engaging for personal gain or ideological purity, we wondered if and how leverage can change a paradigm.

What if our top golfers, when they were first approached, and I mean the golfers who really needed to add competitiveness and credibility to the LIV circuit, had leveraged leverage not only to reap personal windfalls, but also to demand accountability or change from the Saudis?

Perhaps you think it’s far from the case that the Saudis wanted a golf tour so badly that they were willing to make human rights concessions or accept responsibility for the murder. by Khashoggi. You may be right, but a lawyer’s job in contracting for a client is not to limit discussions to making the perfect the enemy of the good, a lawyer’s job in contracting contracts for a client is to find the best possible deal. Good advice should focus on determining the true interests of the parties and leveraging those interests to obtain the best possible deal for their client. Go to Yes is not just a guide to dividing oranges. [5]

If you know that the party you represent has a non-fungible resource that the other party needs, then you can ask for the moon, your client will be happy to settle for a star.

When you combine the concept of leverage with the issue of social responsibility and obligation in sport, maybe you don’t end up with an apology to the Khashoggi family, but maybe you end up by crafting contracts that provide examples of breach and damages clauses similar to good conduct clauses that attempt to take some kind of position to prevent future atrocities.

For the Saudis, would contracts with golfers make the difference between expanding minority rights and fewer extrajudicial killings, who knows, but at least athletes and sports personalities who wield power might try to take a stand .

It looks like the ship has sailed. Phil, we’re looking at you. Because if, from the outset, the Saudis were expected to pay more than dollars to play, then every contract, whether for Rory, Dustin or Charles Barkley (which could mean that not not being a show pony costs more than dollars [6]) could have included such amending provisions. People who have worked hard to get where they are shouldn’t be judged for simply reaping the rewards of their hard work, but when part of their success is due to a public platform and created opportunity, so is it too much to ask that in reaping their rewards are they at least trying to use leverage to get something on top of their own reward?

Whether it’s athletes or desirable businesses located in states considering legal change, until we fully understand the true power of economic opportunity and leverage, change will be hard to come by. to find.

It’s much harder to get a yes when personal, business and social interests collide than in routine contract negotiations for a client, but the benefits could be exponential if we expected people to try.







[View source.]