Don’t poke the bear…

Not the gentle, warm and cuddly current Russian leader or just any old ‘boss’ for that matter but the Golden Bear golfing legend that is Jack Nicklaus. Here’s a tale worth popping in your bag and carrying around all 18 holes.

First, choose your partner wisely

A golf partner is not just for the round, but quite possibly for many years, even life. They regularly outlive a marriage. A good partner will silently carry you when you’re down and off form, loudly encourage you when you’re in form, save your skin and often the hole when you’ve embarrassingly messed up, and find your ball in the long grass when others have lost interest. Jack’s best buddy on and off the course was Arnold Palmer by all accounts. Quite a pair, quite a partnership. His choice of business partner latterly was, shall we say, a bit different.

Long story short, in 2007 Jack partnered up his business interests with Howard Milstein. He was looking for an investor following a disappointing spell running Golden Bear Golf Inc. which lost C. $30m. Still, Jack’s bundled up business interests were valued at around $300m but a cash injection was needed to deliver regular and sustainable profits.

Hole in one

Milstein pledged to invest $145m in the company adding the sweetener that it could, down the line, be sold for a billion dollars. Jack Nicklaus accepted the offer. Howard Milstein is no journeyman lawyer, he’s Harvard-educated and hails from a dynasty of New York Milstein’s, originally Russian immigrants, who through canny real estate deals and investments, are now collectively worth north of $5b.

In the rough

The Milstein-Nicklaus partnership was formed. Jack had ultimate control over the company, Nicklaus Companies LLC, and his passion was designing golf courses. The 2008 financial crash headwinds blew their ball off course. Loans from profits couldn’t be repaid and the $145m loan turned into a $300m bank debt. Howard and Jack ‘twisted’ again renewing the deal in 2012. This time Jack gave over control of the companies to Milstein. With control now ceded to Milstein, their relationship deteriorated. Milstein bought other golf businesses in the US and nationally. The importance of the Nicklaus companies was substantially diluted. Jack was increasingly unhappy.

The bunker

This next bit is important to our story. Jack sold all his intellectual property rights such as trademarks including “Golden Bear” to Nicklaus Companies LLC when he did the initial deal with Milstein. It’s one thing selling your brand but when that brand is essentially you including your name and nickname that’s quite something and perhaps Jack didn’t think it through? Or maybe he did but perhaps having immediate access to cash to distribute to his family seemed like an irresistible idea at the time? We may never know. And now Milstein had control of the company.

The play-off

You can probably guess where this is going, and the level of friction this legal yet personal transaction had on the two men. Jack had had quite enough and cleared his office claiming Milstein was controlling his life and it was intolerable. Milstein will say he was only controlling what he had every right to control. Moreover, a right he had bought. Anyhow, Nicklaus declared ’UDI’ and Milstein sued resulting in Nicklaus Companies, LLC v. Jack W. Nicklaus. A 2022 case now meandering its way through the US court system presenting a heady mix of IP rights, contractual restrictions and personal animosity.

The handicap

There was to be yet more grit in the eye for the Golden Bear. The Saudi-backed LIV Tour ‘rolled into Dodge’ spraying cash at anyone in a pastel sweater and tartan trousers that would listen. It is alleged in the legal papers that Jack wanted a piece of the LIV action (and cash) and Milstein stopped him, thereby saving Jack from himself and, by happy coincidence, any reputational damage to the Nicklaus Companies brands and business. Nicklaus’s sour demeanour towards Milstein did not lighten. Palmer and Nicklaus had co-founded the rival PGA Tour in the late sixties. Different times and a different partnership…maybe.

The gist of the dispute, albeit wrapped in a Gordian knot of contractual red-tape, is that 84 year-old Jack believes he can’t be ‘owned’ by Milstein and, in effect, sentenced to the remainder of his golf-course design life in servitude to him and his eponymous ex-company and Milstein will say; I bought the rights you can’t conduct yourself in a way that damages my intellectual property and my business. I can and will control your behaviour within the law.

Now, those of you non-golfers reading this may be as weary of the refences to the game as you are to the ‘senseless’ game itself. Bear with us, it gets more interesting.

Golf Simulator

What if Milstein creates, via Nicklaus Companies, an AI version of Jack Nicklaus and seeks to control that as well? Even better he seeks to prevent the actual Jack Nicklaus from conducting himself in any way that amounts to unfair competition or undermines the brand he no longer represents. Well, that just happened. The legal team representing the real Jack say publicity rights, that denote an individual’s identity including signature, nickname, and biographical information

“…remain inviolable without an explicit, written [contractual] transfer, which they contend does not exist.”

It’s a ‘Gimmie’

This case rumbles on, but its worthy of note that at the last hearing, six out of seven causes of action brought by Milstein were struck out. With only one left, settlement looks increasingly likely.

A tricky short putt to win the round. No time to get the yips.

 

Murray Fairclough

Marketing Director

OPUS Underwriting Limited 

+44 (0) 780 145 9940

underwriting@opusunderwriting.com

Additional research by Mark Savill