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FTC STEPS UP ITS PROBE AGAINST PGA TOUR
Published January 9, 1995
Officials of the PGA Tour were notified on Friday that the Federal Trade Commission, which has been investigating possible restraint of trade practices by the Tour since '90, "has decided to seek a complaint against the tour." The case now moves from the staff level to the full commission level. At issue is the legality of the PGA Tour's "conflicting events rule," which prevents a tour member from taking part in a golf event on a date when a tour event is being played, and the legality of the TV release rule, which states that players need approval from the tour to appear on other live or recorded programs. The FTC probe "promises to be a lengthy legal process that could take up to five years to resolve" (Larry Dorman, N.Y. TIMES, 1/9). FROM THE TOUR: PGA Tour Commissioner Tim Finchem vigorously denied the FTC's claims and vowed to fight any action in the courts and Congress. In a statement Finchem claimed the PGA Tour's rules have resulted in more, not less competition: "If the staff has its way, these player-enacted and player-supported rules would be eliminated, dismantling the current tournament organization and turning it over to profit-driven promoters." Finchem claimed that over the past 10-15 years: PGA Tour events (including Nike Tour and Senior events) have increased from 44 in '79 to 125 in '94; TV hours have increased from 168 in '83 to nearly 1,000 in '96; prize money increased from $21.9M in '83 to $111M in '93; average purse increased from $245,000 in '80 to $1.4M in '94 (PGA Tour). In an interview with THE DAILY, PGA Tour VP of Communications John Morris saw no room for compromise in an attempt to head off a prolonged legal fight: "The rules that we have have, in fact, increased competition and increased output. They've had exactly the opposite effect to what the FTC staff lawyers have claimed. So, we do not intend to change the rules" (THE DAILY).