Greg Norman Demands PGA Open Books; Antitrust Suit Looming?

In March, our Guest Contributor Chris Callanan discussed golfer Greg Norman's retention of a lawyer to pursue a request to open the PGA's books and records. Today, the Journal's Law Blog links to a Forbes article reporting a threatened suit by Norman against the PGA calling on the tour to release the minutes of its board meetings and other information about its for-profit subsidiaries. Norman's lawyer argues that the PGA tour's players are "akin to shareholders in a public company. 'The central question here is, who owns the Tour?'"

Forbes speculates that Norman may be motivated by personal animosity. My guess is that his lawyer has some theory of antitrust violations by the non-profit PGA in connection with its various for-profit subsidiaries and affiliates. As Guest Blogger Callanan noted, Norman unsuccessfully attempted to launch a rival golf tour in the 1990s.

The legal status of the PGA (and pro golfers) has been a complicated one for courts over the years (on issues like whether pro golfers are employees and whether golf tournaments constitute "public accommodations"). I can't recall an argument that the PGA is owned by the players, and it's certainly an interesting theory. The black-letter law about ownership of nonprofit entities is that they are owned by the public at large, not their clients or employees. Since the public at large is indefinite, non-profits are effectively without owners; although as my professor Henry Hansmann demonstrated in his book The Ownership of Enterprise, non-profit managers are constrained by stricter fiduciary duties. My guess is that Norman's lawyers' theory about who owns the PGA is a loser, although that is not to say that under non-profit organization law the PGA does not have some obligations to make the requested disclosures.

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