LIV Golf: Sergio Garcia Is Allowed to Terminate His Contract – Rahm Must Wait

Sergio Garcia can formally terminate his contract with LIV Golf. The bankruptcy court in New Jersey lifted the automatic stay to the extent that Garcia is permitted to terminate his contract in writing. This provides the Spaniard with the legal clarity he had sought in a motion filed in late September or early October.

Garcia can now explore his options for the 2027 season. A return to the DP World Tour is possible. Talks with the PGA Tour are also conceivable in principle. However, the court’s decision does not imply an automatic return to either of the two Tours.

Garcia had asked the court for clarity

Through his company, Even Par LLC, Garcia had requested that the court either terminate the LIV contract or allow him to terminate it himself. His attorneys at Baker & McKenzie argued that, otherwise, event organizers, sponsors, and other contractual partners would not know for certain whether Garcia was free of competing obligations.

The motion was not fundamentally directed against a possible future with LIV or a successor organization. According to available reports, Garcia also did not object to the planned restructuring of the players’ contracts. Above all, he sought a clear legal framework. Judge Michael B. Kaplan is presiding over the bankruptcy proceedings.

Read more here about Sergio Garcia’s lawsuit in bankruptcy court.

Why Rejecting the Contract Was Not Enough

The case has a legal basis: Under U.S. bankruptcy law, rejecting an ongoing contract does not automatically terminate its legal existence. Initially, it is considered merely a breach of contract. LIV had stated that Garcia’s agreement was “not part of the business plan for the future.” Formally, however, the contract could have continued to create uncertainty as a result.

The court’s decision now provides the necessary leeway. Garcia may serve a written notice of termination and thereby formally terminate his contract.

A return to the DP World Tour is on the table

Garcia remains a member of the DP World Tour. He had already announced his intention to return to the European Tour in 2027. At the same time, the new reports highlight that the DP World Tour does not intend to allow players to compete simultaneously on LIV and the European Tour in 2027.

For Garcia, this clearance is therefore particularly important. If the relaunch is successful, LIV apparently plans to hold only one season with ten tournaments. Many players would have to supplement this schedule with appearances on other Tours. Garcia can now decide whether to return fully to the DP World Tour, pursue other options, or negotiate a new contract with LIV.

A return to the PGA Tour would not be automatic

A return to the PGA Tour is also not guaranteed by the termination of the contract. The PGA Tour has publicly stated that it does not wish to negotiate with players who are still legally bound to LIV. The reason for this is the risk of being accused of improperly influencing existing contracts.

Garcia’s formal separation from LIV removes this specific obstacle. However, other conditions may apply. According to available reports, players who leave LIV face a suspension of at least one year. The one-time return provision, from which Brooks Koepka benefited, is not expected to be repeated.

Rahm’s Contract Remains Unresolved

The situation is different for Jon Rahm. His contract was not rejected, unlike the agreements of many other LIV players. The hearing on his contract has been postponed until November 5, 2026. According to reports, Rahm is the only player whose contract will be addressed at a later date in the proceedings.

This makes his situation particularly significant. Rahm is one of the league’s best-known players and, alongside Bryson DeChambeau, is considered one of its most important figureheads. Where Rahm will play in 2027 remains uncertain, at least until the hearing.

LIV Extends Player Deadline to October 25

At the same time, LIV is trying to secure its relaunch for 2027. The original deadline for player approval was October 13. BC Partners extended it by two weeks to October 25. According to current information, at least half of the players with financial claims must agree. These players must also represent at least two-thirds of the total amount of the claims. In return, the players are set to hold a 52.5 percent stake in the newly formed league.

BC Partners has initially provided $4 million. A total financing package of up to $300 million is planned. Ted Goldthorpe of BC Partners said at a conference in London: “The machine is running; we’re signing players. I’m very confident.” LIV Golf CEO Scott O’Neil described the investment as an important step for the league’s future. The new contracts are intended to be more closely aligned with the players’ equity stake in the company and to replace the expensive agreements from the founding phase.

Garcia is a free agent—his next Tour remains undecided

Garcia has been one of the Tour’s best-known players since LIV Golf’s launch in 2022 and served as captain of the Fireballs GC team. The 2017 Masters champion now has the legal freedom to replan his career for 2027.

However, the decision does not yet indicate where Garcia will play in the future. Based on his previous statements, a return to the DP World Tour seems likely. A move to the PGA Tour, on the other hand, would be subject to additional conditions. It also remains to be seen whether Garcia will negotiate a new agreement with LIV or a potential successor.

For LIV, this case sends an important signal: While the league is struggling to secure player commitments and new funding, one of its most prominent captains is able to walk away from his existing contract. As for Rahm and the league’s future, however, the crucial question remains unanswered.