Jack vs. Nicklaus
The inside story of Jack Nicklaus' legal battle against his own company
In a threadbare courtroom in lower Manhattan, the 82-year-old defendant took care to avoid the power cords taped to the floor as he mounted the witness stand. The clerk asked him to state his name and provide his business address.
“Jack William Nicklaus,” he said, “I don’t even know a business address.” He gave his home address instead.
That, in a way, was the whole case right there. As his subsequent testimony made clear, Nicklaus still has a sharp memory, so he may have chosen to forget his business address, which would have been understandable under the circumstances. The plaintiff in the case is, in fact, Nicklaus’ own business, and the case is captioned, improbably enough, Nicklaus Companies, LLC v. Jack W. Nicklaus. The lawsuit was filed in May 2022, and it’s very much ongoing. The case raises a variety of complex legal issues, but the most important is this: What the hell is going on here?
Nicklaus’ demeanor can be as revealing as his words on the record. That was apparent when I recently visited him at what’s known in Nicklaus’ world as the “family office,” which is about three miles from the “business” office—the one he couldn’t remember—in Palm Beach County, Florida. Now 83, Nicklaus is a bit stooped, and his golfing days are, alas, behind him. “I don’t play golf anymore,” he told me. “I played four times last year, all in May—twice at Augusta, and I shot 88, 87, and twice at Muirfield Village on the weekend before the tournament, and I shot 86, 84, and I said, ‘That’s enough.’ ” But despite the end of his playing career, even for fun, Nicklaus was in buoyant spirits. I asked him how he felt about his court appearance, which included two days of cross-examination. “I’ll give you two phrases to describe the trial,” he said. "One, I didn’t want to do it, and two, it was a pleasure. I saw a light at the end of the tunnel—that I might get rid of this and might be able to go live a life. If I end up doing nothing other than not working for him, that would be worth it.”
“This guy” is Howard Milstein, a New York real estate and banking magnate and Nicklaus’ erstwhile business partner. They joined forces under Nicklaus’ corporate banner in 2007, and their divorce has taken place like a bankruptcy once described by Ernest Hemingway: “Gradually, then suddenly.”
For the ultimate control freak on the golf course, whose relentless, risk-averse style propelled him to 18 professional majors and arguably the greatest record in the history of the game, Nicklaus has had a surprisingly tumultuous business career, and the Milstein conflagration is the latest chapter. As with much else in Nicklaus’ life, his business journey began with Arnold Palmer.
IN THE EARLY 1960S, WHEN EVEN the best pro golfers struggled to make a living, a young lawyer in Cleveland named Mark McCormack had an idea to broker deals for endorsements and exhibitions that would benefit the golfers and himself. His first client was Palmer, and together they created the modern sports economy. At the firm that came to be called the International Management Group, McCormack signed Gary Player as his second client and Nicklaus as his third. Palmer remained with McCormack and IMG for the rest of his life. Unlike his golf game, which often involved reckless gambles, Palmer’s business career was serene and steady. He died a very rich man, thanks in part to IMG’s ability to monetize for him the alchemical interaction of lemonade and iced tea.
Nicklaus made a different choice at an early crossroads in life in 1970, when he turned 30 and his father unexpectedly passed away at 56. Nicklaus left McCormack’s stable and struck out in business on his own. “All I was doing was what every man eventually must do when he loses his father: growing up to the point of finally assuming full control of his own life,” he later wrote.
THE LEGAL QUESTION IN THE CASE IS WHAT EXACTLY HOWARD MILSTEIN BOUGHT FOR THE $175 MILLION TO NICKLAUS. WHAT “THE CONTRACT” SAYS ISN’T CLEAR.
By the time Nicklaus left McCormack, he had already started buying the real estate for Muirfield Village Golf Club, near his hometown of Columbus, Ohio, the future home of the Memorial Tournament. Nicklaus had chosen (against McCormack’s advice) to finance the development of the club himself, and Nicklaus later wrote, “The project did come awfully close to taking me down the tubes.” Muirfield depleted Nicklaus’ resources before it opened in 1974, but it also gave him a new career as an eminent golf-course designer. As in tournament golf, Nicklaus’ achievements as an architect quickly outstripped Palmer’s, but his travails in business continued. By the mid-1980s, attempts to diversify his personal company, then known as Golden Bear Inc., proved disastrous. Nicklaus’ investments included two troubled housing developments in the San Diego and New York areas and an eyewear company, a radio station, and oil and gas projects. By 1985, Nicklaus learned, according to his autobiography, that he and the company “personally were so deeply in debt and at risk in real estate and other nongolf-related projects as to face imminent financial disaster.” In light of this pressure, Nicklaus’ epic triumph in the 1986 Masters, at the age of 46, looks even more remarkable. (Nicklaus’ paychecks as a player on the PGA Tour were minuscule by contemporary standards. He won 73 tournaments and earned $5.7 million in prize money, which puts him in 306th place on the all-time money list, just behind David Peoples. To start this year, Jon Rahm won three tournaments in six starts and earned nearly $10 million.)
Nicklaus brought in new management, shed nongolf-related businesses and concentrated on course design and what was supposed to be a network of high-end driving ranges. In 1996, he took the company, now called Golden Bear Golf Inc., public at $16 a share, but Nicklaus’ vision for a sort of proto-Topgolf was ahead of its time, and the ranges did not prosper. Worse yet, two executives at his course-construction subsidiary were found to have falsified records, and the company’s losses, which had seemed to be a manageable $2.7 million, turned out to be $24 million. The value of the stock dropped so precipitously that shareholders filed a class-action suit against Nicklaus, and he ultimately bought out remaining shareholders for 75 cents a share and took the company private. (The two executives were convicted on federal charges and sentenced to prison.) Nicklaus’ losses in Golden Bear Golf were in the range of $30 million. In 2000, he started over with a private company bearing a new name, the Nicklaus Companies, LLC.
HAPPIER TIMES Nicklaus and Howard Milstein, on the day they became business partners in 2007.
THROUGHOUT THESE CHAPTERS, Nicklaus enjoyed several advantages. His integrity and honesty were never challenged. His reputation as a golfer flourished as he continued winning tournaments during the 1990s on the senior tour. His clothing lines remained popular, especially in Asia. Most importantly, despite his other business reverses, his career as a golf-course designer thrived. In the first decade of the new century, the Nicklaus Companies appeared to be on a healthy trajectory, and his chief financial officer at the time came to Nicklaus with an idea. “He says, ‘You’re not getting any younger,’ ” Nicklaus told me. “Maybe it’s time to pass to my kids, let them monetize something, so they don’t have to wait for me to kick the can to have any kind of money.” The company hired an investment bank that valued the Nicklaus Companies at nearly $300 million and started looking for investors. Revenues for 2006 were $77 million and projected to be $100 million by 2009; profits, in theory, would go from $23 million to $43 million a year.
The company had a variety of suitors, but one put in a bid early and never changed it. Howard Milstein said he would invest $145 million in the company—predicting it could eventually be sold for a billion—and Nicklaus accepted the offer. Nicklaus promptly gave $20 million (after taxes) to each of his five children. In our conversation, Nicklaus called these gifts to his children “not a huge amount of money, but in this day and age, pretty good,” an observation that reveals the rarefied circles in which he travels. By this point, Jack and Barbara Nicklaus had created the template for charitable giving by golf superstars, which Tiger Woods, most notably, has chosen to follow. The Milstein investment allowed the Nicklauses to expand their philanthropic interests, which have amounted to more than $200 million raised for children’s health over the past two decades.
As of 2007, Nicklaus now had a business partner, though he retained ultimate control of the company. “I’m very unsophisticated,” he told me. “I was a golfer, just retired from tournament golf. I knew nothing about business. I’m not a lawyer. I don’t know what all that stuff is. I wish I did because I probably wouldn’t have gotten into what I got into. I never knew what the word ‘vet’ meant. If I did, I probably never would have wound up with Howard Milstein.”
WHO IS HOWARD MILSTEIN? FOR starters, Howard is a Milstein, which is a big deal in New York City. In 1919, Morris Milstein, a Russian immigrant, founded a company that joined in the city’s real estate boom by installing the flooring in skyscrapers, including, eventually, the World Trade Center. From flooring, the family moved into real estate, building and owning residential and office towers in Manhattan and elsewhere. In 1986, the family bought Emigrant Savings Bank and built it into the country’s largest privately owned, family-run bank. The Milstein family is now worth an estimated $5 billion.
SIGNATURE JACK The Reserve at Moonlight Basin in Montana, a Nicklaus design, opened in 2016 and ranks 176th on Golf Digest’s Second 100 Greatest Courses.
The Milsteins, including Howard, are also litigious, including among themselves. Morris Milstein had two sons, Paul and Seymour, and in the ’90s, their heirs spent a decade battling each other in at least four lawsuits over succession issues. The cases were ultimately settled in 2003, with Howard (Paul’s son) retaining control of the Emigrant bank and the family real estate firm. Howard, who graduated from Harvard Law School and is now 71, also has a longstanding interest in sports. In the ’90s, he was involved in plans, which never came to fruition, to create rival leagues to Major League Baseball and the National Football League. Later, after attempts to buy the Cleveland Browns and the (then) New Jersey Nets, Milstein did buy a controlling interest in the New York Islanders hockey team, but he sold the team after a rocky tenure that included lawsuits over a possible new home for the franchise. In 1999, he offered $800 million to buy the Washington Redskins, which was the highest bid for the team at the time. Still, the NFL owners didn’t approve Milstein as an owner, in part, according to news reports, because of his penchant for litigation. After withdrawing his bid, Milstein sued the previous owner of the Redskins for conspiring against him; he lost.
Milstein played golf as a kid, gave it up for tennis for a long time, then played a round on a lark in his early 40s and made a hole-in-one. Thus inspired, he picked up the game again and became a middle-handicapper. The Nicklaus- Milstein marriage had a honeymoon of sorts, which featured several rounds of father-and-son foursomes, including two at Augusta National. More importantly, when Milstein learned that Nicklaus was suffering from a rare cardiovascular condition, he arranged for immediate treatment with the leading specialist in the field, who was affiliated with the Milstein Hospital in upper Manhattan. (Like the Nicklauses, the Milsteins have a long history of philanthropy.)
In the 2007 deal, Milstein’s Emigrant bank loaned $145 million to Nicklaus’ company, which Nicklaus himself was allowed to take out in cash for his family. Going forward, the plan called for the company to take the first $12 million per year in profits to repay the loan, with any additional profits split between Milstein and Nicklaus. But the pair’s business was buffeted by the Great Recession of 2008, which hit the golf industry especially hard. The design of new golf courses, which was Nicklaus’ passion and the company’s most important line of business, nearly ground to a halt around the world. The company had no profits to repay the loan from Emigrant, so the indebtedness to the bank compounded. (It’s currently about $300 million.) The downturn lasted for much of the first five years of the two men’s partnership, and Nicklaus wavered about renewing the deal in 2012, not least because he knew that it had been unprofitable for Milstein. “I felt like he hadn’t had a fair shake, and he convinced me we could turn this around,” Nicklaus told me. However, for the second five years, the terms of their relationship changed in important ways. First, Nicklaus received more income—a cut of gross revenue rather than a slice of profits, which put his total remuneration from the Milstein deal at about $175 million. In return, Nicklaus turned over control of the Nicklaus Companies to Milstein.
COULD NICKLAUS START DESIGNING GOLF COURSES ON HIS OWN, OUTSIDE THE COMPANY, AND PROMOTE THEM JUST WITH HIS OWN NAME? THE PLAINTIFFS SAY NO.
This is where things really began to deteriorate between the two men. “After we signed this new deal, he got control, and his whole attitude changed. It was now, I’m in control. This is what we’re going to do. I had virtually very little say with what was happening,” Nicklaus says. “Not that he was disrespectful, but pretty soon, it was pretty hard to live with it.” What’s peculiar about Nicklaus’ position is that he has a hard time specifying how Milstein made his life miserable. One of Nicklaus’ complaints is that Milstein never once called him on the phone, which seems inconsistent with his belief that Milstein was also micromanaging him. Milstein had to approve all expenditures over $5,000, which annoyed Nicklaus, and this included use of the corporate plane, a beloved perk for Nicklaus and a critical tool for reaching his worldwide network of design projects. Most galling to Nicklaus, Milstein zealously guarded the company’s control of the Nicklaus name, including its use by Jack’s family. Nicklaus’ four sons had always been closely involved in Jack’s business and life, but Howard said Michael Nicklaus couldn’t use the name “Golden Bear” at his real estate brokerage, and Milstein didn’t want Gary Nicklaus to call an investment firm “Nicklaus Brown & Co.” or let it post a photograph of Jack and Gary on its website. (Howard Milstein declined to be quoted for this story.)
Milstein also made a series of additional investments in the golf business. He invested in Miura Golf, the Japanese club manufacturer, and bought Golf magazine and Golf.com (which compete with Golf Digest) and a pair of smaller tech companies, True Spec Golf, which is a retail clubfitter, and the app GolfLogix. Milstein folded his golf interests into a privately held firm called 8AM Golf, which was a part of his broader family empire. The Nicklaus Companies went from being Milstein’s crown jewel to a subsidiary of a subsidiary.
Nicklaus stewed. He had to clear speaking engagements and golf exhibitions with Milstein, whom Nicklaus came to regard as a social climber. “What he wanted to do was have me take him to all my relationships and transfer them to him,” Nicklaus says. “When I realized how he handled people, I didn’t want him near my relationships.” The feud even enraged Jack’s wife. “Barbara is the sweetest person in the world and never said a bad word about anybody— except one person,” Nicklaus says.
MILSTEIN’S TEAM ALLOWED ME TO visit the corporate offices of the Nicklaus Companies, LLC, which is a surreal experience these days. Located in Palm Beach Gardens on (where else?) PGA Boulevard, the place looks like a shrine to Jack Nicklaus, not like the offices of a company that is suing Jack Nicklaus. The walls and tables are covered with photographs of the man (a few alongside Howard Milstein), memorabilia from his achievements, and displays of products bearing his name and image. Nicklaus had sold the company the right to use such trademarks as the “Golden Bear,” and there is even a canned beverage called “Golden Bear Lemonade.” The employees sound like shell-shocked children of a bitter divorce who hope to remain on good terms with both parents. Nicklaus had an office at the Nicklaus Companies until October 2017. “He came in and cleared out his office over a weekend—every piece of furniture, every picture on his wall,” one current employee recalled. “When the secretaries came in on Monday, they started crying because they thought the company was closing down.”
It wasn’t, but Nicklaus was trying to extricate himself from Milstein, which became evident in a bizarre incident relating to, of all things, the Ukraine scandal that led to President Donald Trump’s first impeachment. Lev Parnas and Igor Fruman were businessmen who claimed they were doing Trump’s bidding by scheming with Rudy Giuliani to persuade the government of Ukraine to investigate Joe Biden. When their names surfaced, Trump denied knowing the men. In response, Parnas released an audio recording that he had surreptitiously made of a fundraising dinner with Trump in April 2018; the tape suggested that the President endorsed the pair’s efforts in Ukraine. (Taping the dinner was at least inappropriate, if not actually illegal; Parnas and Fruman later pleaded guilty to campaign-finance violations.) Jack Nicklaus III, Nicklaus’ grandson, happened to be seated at the same table as Trump, Parnas and Fruman at the dinner. (Jack Nicklaus has long been a friend and political supporter of Trump.) At one point, Trump turned his conversation with Jack III to the subject of Howard Milstein, whom the President knew from New York real estate circles. “How did you do with Milstein?” Trump asked, “How’s that going?” Jack III replied, “My grandpa, he’s 78 years old, and he doesn’t need to deal with that kind of ego.” Later, Trump said of Milstein, “It’s exhausting, because I know him. I know the guy.”
WORLDS APART Nicklaus in the family office in 2022; Milstein made an unsuccessful bid for the Washington Redskins in 1999.
At the end of Nicklaus’ second five-year deal, he chose not to renew, but he did not leave the company altogether. Nicklaus announced a “retirement” from the Nicklaus Companies, but he continued designing courses under the company banner. Over his full career, Nicklaus has designed about 300 courses around the world; those bearing the “Jack Nicklaus Signature” imprint are those he worked on most closely, and they commanded the highest prices. Over the next few years, Nicklaus recruited some of his friends in business as intermediaries to try to sort out the relationship with Milstein, to no effect. (In these discussions, Milstein proposed at one point that he would pay Nicklaus $3 million per year for the rest of his life; after Jack’s death, the company would then pay Barbara Nicklaus $2.5 million per year for the rest of her life; then after her death, the five children would receive $400,000 per year for the rest of their lives. Jack and his family rejected the deal because it would leave them intertwined with Milstein in perpetuity.) Except for the course-design work, Nicklaus had less and less to do with the company. By 2022, Scott Tolley, who had been a kind of all-purpose aide to Nicklaus for many years, had left the company and gone to work for Nicklaus as an individual. Milstein threatened to sue Tolley if he continued to work for Nicklaus, and he demanded that Nicklaus and Tolley cut off contact with each other—which Nicklaus regarded as “an attack on me and a further attempt to control my life.” In response, on May 3, 2022, Nicklaus sent Milstein a letter severing all ties to the Nicklaus Companies. He also filed for a private arbitration in Florida, designed to sort out his and Tolley’s rights under their contracts with Milstein’s company.
Three days later, Milstein responded by filing the Nicklaus Companies, LLC v. Jack W. Nicklaus lawsuit in New York state court. “Despite being paid an enormous sum,” the complaint stated, Nicklaus “acted in bad faith, wrongfully diverted opportunities to the detriment of Plaintiff’s business and willfully engaged in activities damaging to the brand and other intellectual property owned by the Company.” The real assault, though, came in another part of the document, which landed like a 2-iron swung at Nicklaus’ forehead.
A LARGER TRUTH SEEMS CLEAR: TWO INDEPENDENT, HEADSTRONG ALPHA MALES GREW TO LOATHE ONE ANOTHER—AS MIGHT HAVE BEEN PREDICTED FROM THE START.
BY THIS POINT IN 2022, THE BIG story in golf was the effort by the Saudibacked LIV Tour to pry luminaries of the game away from the PGA Tour by paying them enormous sums of money. The game’s traditionalists, as well as those offended by the Saudi regime’s human rights record, led the resistance to LIV. The controversy had little to do with the Nicklaus-Milstein dispute, but in a demonstration of the bitterness between the two men, Milstein used the case to make a damaging accusation: that Nicklaus had wanted to take the Saudi’s money and become part of the LIV Tour—but Milstein had stopped him. According to the complaint, Milstein “essentially saved Mr. Nicklaus from himself by extricating him from a controversial project that could have not only tarnished his legacy and reputation, but severely damaged the Nicklaus Companies’ name, brands and business.” Milstein’s claim received wide attention in the golf world.
Nicklaus regarded this accusation as a flagrant lie and an especially damaging one. He noted, for starters, that Milstein testified that he had warned Nicklaus off the project face-to-face “in a meeting in the boardroom” of the Nicklaus Companies; in fact, the board meeting in question took place over Zoom. As for the connection to the new league, Nicklaus told me he did meet twice with Saudis who were involved with creating the LIV Tour but only because he was designing a pair of golf courses for them in Saudi Arabia. In their first meeting, the visitors, including Yasir Al-Rumayyan, a leading figure in the Saudi economy, brought up the new league, and Nicklaus said he had never heard of it. Afterward, he called Jay Monahan, the commissioner of the PGA Tour, who warned Nicklaus off the project. In the second conversation, where his son Jack II was also present, Nicklaus Sr. told me that the Saudis made him an offer to become a partial owner of the new league. “They said, ‘We will name the trophy the Jack Nicklaus trophy, and we think this company could be worth north of $100 million,’ and I said, ‘Guys, I can’t do this,’ ” he told me. Nicklaus informed the visitors that he would remain loyal to the PGA Tour, which he, Palmer and Gardner Dickinson had co-founded in 1968. “They changed it from $100 million at the meeting to $250 to $500 to $750 million, while they were talking to me,” Nicklaus told me, “I wasn’t paying attention to it because I wasn’t interested. But my son Jack said they came off the 100 and went to 750.” Afterward, Nicklaus wrote Yasir Al-Rumayyan a letter, dated May 17, 2021. “Your Excellency,” he wrote, “By accepting your offer I would be turning my back on what I created and have championed.” (Nicklaus sent a copy of the letter to Monahan, who keeps it on his desk.)
In short, according to Nicklaus, Milstein’s complaint falsely portrayed him as greedy and disloyal to his fellow PGA Tour golfers. All that was left was for Nicklaus and Milstein to face off in court.
THE THREE DAYS OF TESTIMONY last fall before Justice Joel M. Cohen amounted to a preliminary skirmish in what could be a long legal war. Milstein (that is, the Nicklaus Companies) wanted a preliminary injunction to stop Jack Nicklaus (the person) from using the Nicklaus name commercially or designing any more courses except for the company. In front of the judge, both sides tried to look reasonable. The Milstein forces said they had always been deferential to Nicklaus. John Reese, the former chief executive of the company, testified that “Howard was over the moon to be a partner with Jack. I mean, who wouldn’t be? Howard went out of his way to be kind to Jack. He was a cheerleader the whole time.” Cross-examining Nicklaus, Gary Malone, a lawyer for Milstein, pointed out that Nicklaus couldn’t specify any complaints about Milstein’s behavior. “Isn’t it a fact that you cannot recall a single instance in which you proposed the company take some action and was turned down by a board of managers meeting?”
“I don’t think I ever proposed anything that was ever considered,” Nicklaus answered.
“But you can’t think of a time in which the board of managers turned down a proposal that you made, correct?”
“I don’t recall, actually,” Nicklaus said.
For his part, Eugene Stearns, Nicklaus’ lawyer, tried to make it seem that Milstein wanted to lock Nicklaus into a lifetime of servitude. “Your view is for the remainder of his life, you have the right to say, ‘Sorry, sir. You’re not going to ever again be able to design a golf course or endorse a product unless I approve of it’; is that your view?”
Milstein filibustered in reply.
“NOBODY CAN OWN ME—MY NAME, MY FACE,” SAYS NICKLAUS, 83. “SINCE NOVEMBER, I’VE BEEN BACK STARTING A BUSINESS AGAIN. I’M HAVING A BLAST.”
“Mr. Milstein, I don’t think you are listening to my question. My question is, is it your view that for the remainder of Jack Nicklaus’ life you have the ability to prevent him from designing golf courses or endorsing products unless you approve of his activities?” Not exactly, said Milstein.
What was striking about the contest was the relative triviality of the complaints each side had against the other. Nicklaus felt disrespected. Milstein felt that Nicklaus, outside the company’s auspices, discussed golf-course projects in Belgium and the Bahamas and considered an offer for a video game. In a broader sense, Milstein thought Nicklaus was ungrateful for his $175 million largesse to his family; Nicklaus thought the deal with Milstein prevented him from making $300 million by selling the company to a more congenial partner. A larger truth seems clearer: that two, independent, headstrong alpha males grew to loathe one another—as might have been predicted from the start.
The legal question in the case is what exactly Milstein bought for the $175 million to Nicklaus. “Trademarks and the right to publicity, including a name, can be sold,” Christopher Sprigman, a professor at New York University law school, told me. “If Nicklaus has transferred the right to use his name to the company, he could lose the right to use his name to independently design golf courses. It all depends on what the contract says.” The problem in this case is that “the contract” is actually hundreds of pages of separate agreements signed over 15 years, and their terms are, to use a technical legal description, a mess. What “the contract” says isn’t clear.
Cohen, an unusually savvy judge, has made several appeals for the septuagenarian plaintiff and octogenarian defendant to settle their differences, to no avail. Instead, on December 9, 2022, Cohen issued a preliminary order that amounted to a compromise of sorts. Nicklaus could continue designing golf courses, but he couldn’t market them with the trademarks he had sold to the company, like “Golden Bear” and “Jack Nicklaus Signature.” However, the order left a significant ambiguity. Could Nicklaus himself start designing golf courses on his own, outside the company, and promote them just with his own name? The plaintiffs say no; Nicklaus’ team says yes. A definitive answer might take years. The judge has scheduled depositions in the case to take up most of 2023, with a motion for summary judgment— that is, a dismissal before trial—to be filed in early 2024. Then, depending on the outcome of that ruling, a full trial would probably take place in 2025— with appeals to follow.
Nicklaus, befitting a man in his ninth decade, is not waiting around.
“Nobody can own me—my name, my face,” he told me. “Since November, I’ve been back starting a business again. I’m having a blast.” He’s working with three of his sons, hiring some of his favorite employees from the Nicklaus Companies and looking for expanded office space. He was just back from a course site in Puerto Rico. “It was the most beautiful place for a golf course that I’ve ever seen. I can’t wait to put one there,” he says. “I don’t care if I can’t call the course the Golden Bear. It’s fine with me if they call it the Olden Bear.”