Leaks are back. Late on Monday night, the golfing public got its first look at the five-page framework agreement signed by the PGA Tour and the PIF that is set to fundamentally alter the structure of men’s professional golf. The Athletic first reported the document with many other outlets following up as well.

The document reveal was, for the most part, underwhelming. Everything we had previously heard was in the deal was, in fact, in the deal. Missing details were still missing. We now at least know what the written framework looks like, and we also know what is yet to be decided. (A lot!) There are many questions still to be answered, but golf fans and general observers know more today than they did last week.

We’re breaking down all these developments today. Brendan took a look at the document and analyzed what we learned, what we didn’t learn, and what that might mean for all the parties involved going forward. Keep reading after that for Will’s interview with an antitrust attorney discussing the legal perspective on how things have unfolded and how they might play out from here.

Five pages and the future of golf

By Brendan Porath

Ten thoughts on the official framework document reported on by The Athletic, No Laying Up, the New York Times, Golf Channel, and others after it was circulated on Monday night:

1. The people following the story (that’s you, subscriber to this newsletter), listening to Jimmy Dunne’s comments, and trying to understand what exactly happened in the hours and days after the initial bomb dropped on CNBC probably learned very little from the actual document. There are no valuations or specifics on what’s been agreed to. The general board structure and expectation of Saudi funding for NewCo are all in there. We’d heard all this.

2. This seems to be a source of confusion for some: the name NewCo is just a placeholder for now. I think. Hope.

3. Framework is almost too strong a word. So too is merger, maybe? This is a five page document with almost no particulars. It’s two sides expressing their desire to not want to spend money fighting anymore or risk collateral damage doing so, and deciding to figure it out later. It feels like a pre-settlement or ceasefire. The term merger may have been misused from the start, but it’s certainly a win for the Saudi side that it’s the term and framing that’s stuck. When the specifics are filled in and this has been put through the DOJ antitrust ringer, the framework may look very different. For now, it’s a relatively hasty agreement to stop fighting, with a general outline of future cooperation and structure.

4. The antitrust question seems to be the largest one. I tried to read, listen, and watch everything I could on this in recent weeks. According to some the agreement, reached after a negotiating process that did not undergo any real antirust consultation, is a black letter antitrust violation. Jay Monahan’s “taking a competitor off the board” comment could be a critical off-the-cuff error, bringing more scrutiny and making it harder to argue this is simply one party taking on investment from another for the benefit of all. The fact that it’s better for the consumer — all the best players in one place is generally what the consumer wants in sports — is an argument that will be made. But how it impacts the labor is, or should be, the primary concern of antitrust regulators. Is there a convincing argument that this is best for the players when the arms race of recent years has been quite good for them? There may be a failing firm defense, i.e. one side crying poor or stating its business was unsustainable without this merger, but that’s for another day. This “framework” document does very little to help the parties involved avoid the questions and, frankly, outright mockery from antitrust experts who have weighed in.

5. Whether all that ultimately undoes this plan is a different, more complex question. Sports tend to muddy the waters in this area, and there’s also that giant elephant in the room of international relations and diplomacy. Does an executive branch seeking to improve dialogue with a critical Middle East nation and its oil supply have anything to say about its DOJ looking into this? It’s not supposed to, and I’m not a conspiracy theorist. (Though I’ve been reading others who are.) Needless to say, the fact that this case involves both a sports league and the Saudi element seems to complicate any standard black letter reading of an antitrust evaluation. Note: I said complicate, not overrule!

6. It looks like the PGA Tour decision-makers will ultimately decide LIV’s fate after some financial analysis and maybe an agreement to keep a team golf concept alive in the NewCo. There’s also a line about making a good-faith effort to secure OWGR recognition for LIV, which would not be very useful if LIV ceases to exist. We’ll see!

7. The subject of how equity in the NewCo could be allocated to players of prominence who passed up the LIV cash is not addressed. It seems like that will be a thorny issue to sort out, given that a player’s level of prominence and value can plummet and rise with some suddenness.

8. Another vague and thorny question: how will LIV players be re-integrated? This document does not clarify that process at all. The only clue might be in the creation of a new Communications Committee, featuring the powerful duo of Dunne and Ed Herlihy, with the stated mission being “to help facilitate a smooth business transition.”

9. In these early and nebulous stages, the Saudis sure do seem to have gotten a lot from this agreement to play nice together. A non-disparagement clause ends all the nasty things people were saying about them. And, as Eamon Lynch pointed out, that clause looks to apply not just to the PIF, but to KSA as a whole. The Saudis also have a formal and official place in golf, along with a fair degree of power of the purse strings at the highest level of the game. They have access to sponsorship and a PGA Tour stamp of approval for its many sponsor companies. The framework agreement also preempts the threat of legal discovery and litigation that may have exposed the Saudi government’s many non-golf business interests in addition to the golf venture.

10. The Saudis have always had a lot less to lose than the Tour. Both sides are committed to a “good faith” effort to sort out all the particulars and finish this deal. But if it falls apart, the Tour is screwed. They have seemingly played all their cards — burning the lawsuit stick, giving up any claim to the moral high ground, and officially welcoming the PIF into the game for players and sponsors to run to. If the deal goes through in a form resembling this framework, they will have what appears to be a lot more money from a new partner while still retaining control. But the Tour is also much more exposed than their partners should this thing fall apart for any reason — antitrust, a mutiny from their own players and board, or something else.

The next steps, legally speaking

By Will Knights

One of the biggest variables remaining: antitrust inquiries and other legal scrutiny from the Department of Justice and the Federal Trade Commission. To better understand what lies ahead for the PGA Tour, The Fried Egg talked with Henry Hauser, an antitrust lawyer at Perkins Coie LLP who has previously worked at both the DOJ and FTC. Henry also teaches antitrust law at the University of Colorado. Henry has been following both LIV’s lawsuit against the PGA Tour and the DOJ’s inquiries into the PGA Tour’s actions as a result of LIV’s complaints. He had not yet read the written framework at the time of our discussion, but he had plenty of thoughts on the future of the DOJ’s investigation and the legal maneuvering of the PGA Tour.

TFE: Going back three weeks, what was your initial reaction to the news of the PGA Tour and PIF forming this framework agreement?

Hauser: “Like a lot of folks, my initial reaction was surprise because it did appear based on what we could see about the lawsuit that this was a contentious litigation. There were not a lot of rumors or rumblings or any indication that the parties were so far along in exploring a settlement.

“The next thing that a lot of folks thought was “Okay, how does this impact DOJ’s investigation into certain practices by the PGA Tour?” We’ve heard that involved interviewing some prominent players and extensive investigation, likely of the conduct that LIV complained about but possibly beyond that as well.

“The settlement in the private suit doesn’t make the DOJ suit go away, but the question is how is it going to impact that. Is it going to strengthen that, is it going to weaken that, what could be the second order effects on the DOJs case?”

TFE: From the PGA Tour’s perspective, what are they likely working on at this point and what are the challenges in moving forward from this framework agreement?

Hauser: “In terms of implementing, that’s a little outside my area [of expertise.] I think what they’ve got to be thinking about is balancing the desire to move forward with this alliance with the possibility that DOJ action is, if not imminent, then forthcoming at some point. That could involve seeking all sorts of different relief including unwinding the alliance if that’s something they pursue…The saying is that it’s really hard to unscramble the omelet. Once this [deal] gets integrated and [the PGA Tour and PIF] start unifying and they start building something together, it makes the cost of unwinding it that much higher. If that’s ultimately what happens. Anything that they move together on, it has to be done under the shadow of potential relief that [the PGA Tour would] have to undo that at some point, and that could be really difficult and really expensive.”

TFE: Do you think there is any way the PGA Tour and PIF could improve their deal so that there is less risk of antitrust scrutiny from the DOJ?

Hauser: “I’m sure there are things they could do to reduce the risk by structuring it a certain way, but the fact is that the DOJ was looking into the PGA Tour before this agreement was announced. It seems like, if anything, this agreement is something that the DOJ is going to want to look at in addition to everything they were looking at before. Even if they structure it in the most advantageous way to reduce antitrust risk, I don’t think that makes the DOJ investigation go away.”

On Tuesday, the PGA Tour policy board met at the Rocket Mortgage Classic. The five-hour meeting focused largely on the new framework agreement and, according to Golf Digest, included a new phase of talks with the Saudi PIF. We will continue to update this story as it develops over the coming weeks and months.

This piece originally appeared in The Fried Egg newsletter. Subscribe for free and receive golf news and insight every Monday, Wednesday, and Friday.