Professional golfers who have signed multi-million dollar contracts with LIV Golf are now facing a financial situation that most of them did not expect, with a large number of those contracts likely not to be honored. LIV Golf has applied for bankruptcy protection under Chapter 11, and as a result, more than 120 agreements that had been made before the filing with golfers and with organizations that compete on or support the tour have already been rejected. For those golfers who have built their careers on the promise of those contracts, the filing now brings immediate doubts about what will happen next and what legal alternatives are still available.
What the LIV Golf Bankruptcy Filing Actually Does
LIV Golf has put certain financial elements of a restructuring plan in place and has secured an agreement from a financing source willing to support the company through Chapter 11. That support depends on LIV successfully executing its business plan. Renegotiation with the golfers who are the engine of the Tour is the key element of the plan’s success.
LIV plans to end its current agreements with players and substitute them for new contracts that correspond to the company’s decreased financial situation. The fact that over 120 agreements have been rejected shows that this strategy is already underway.
The Choice Facing LIV Players
The players whose contracts have been rejected now have to make a difficult decision regarding whether they can agree to new deals with LIV on much less favorable financial terms to them, or they can try to go back to the PGA Tour and stay away from LIV. That second option carries its own uncertainty. The PGA Tour has indicated limited interest in bringing back the remaining LIV players, even as it has accepted a small number who left LIV at an earlier time.
If this is an accurate reflection of the PGA Tour’s position (and a devil’s advocate response to the PGA’s position might be to ask whether they would not want to welcome back these players and thereby immediately undermine any continued financial viability of LIV), and if LIV players have no legal mechanism to force their way back onto the tour, their options narrow considerably. They may be left with the same organization that has already failed to pay them what it promised. Many professional golfers built their careers around long-term competitive and financial expectations. Facing renegotiated terms or a limited set of alternatives is a genuinely difficult position for these players, and their hesitation to accept new terms, if that is in fact the case, is understandable.
The Pivotal Question
One unresolved factor could shape how this plays out. It remains unclear whether LIV’s financial sponsors have already negotiated replacement agreements with the players whose contracts were terminated. A review of the bankruptcy filings points to this issue as the pivotal one and likely the biggest factor in whether the restructuring succeeds.
If sponsors have lined up new deals with a meaningful number of affected players, LIV’s path through Chapter 11 becomes more stable. If those negotiations have not happened or stall, the tour’s ability to retain enough talent to remain competitive comes into serious question.
What This Means for Affected Players
People who are involved with LIV Golf, including golfers and their agents, are having to go through a bankruptcy process which has a direct impact on their earnings and on their professional futures. The Chapter 11 proceedings set out particular deadlines for filing claims, for objecting to the rejection of contracts, and for asserting one’s rights as a creditor. This likely creates the necessity for decisions being made by these players at an earlier time.
Anyone who has a contract with LIV Golf-whether they are a player, an agent, a vendor, or some other counterparty-should as early as possible come to know the position they hold in the bankruptcy proceedings. This involves looking over the particular terms of the agreement that has been rejected, determining which claims may still be pursued, and deciding whether it is better for them to return to the PGA Tour (if that remains possible) or to negotiate new terms with LIV.
The bankruptcy practice group at Greenspoon Marder assists creditors, contract counterparties, and all other relevant parties in connection with Chapter 11 proceedings in various industries. The firm’s lawyers are able to help clients assess contract rejection notices, advise them regarding claim deadlines, and pinpoint the alternatives open to those whose agreements have been terminated in bankruptcy.
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