SBD/Issue 219/Leagues & Governing Bodies

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  • Judge Throws Out All But One Charge In ATP-Hamburg Trial

    Judge Throws Out All But One Charge In ATP Suit
    U.S. District Court Judge Gregory Sleet this morning threw out all but one of the charges in the ATP antitrust case, a source said. The core charge of antitrust violations against the ATP corporate entity remains and will likely be given to the jury today on this, the 11th day of the trial. But charges against the ATP for tortious interference and for illicitly converting the value of the Hamburg, Germany, tournament to its own benefit, as well as against the individual board members, have all been thrown out, the source said. The tournament sued the ATP for planning to demote the event as part of the circuit's new format for next year. The tournament charged antitrust violations, that the ATP was taking value from Hamburg without payment, it had interfered with Hamburg's business relationships and that the individual board directors were responsible.

    ECONOMIC WITNESSES PAID BIG BUCKS: Underscoring the high stakes involved in the case, the ATP paid economic witness Jonathan Walker and his firm, Economists Inc., $1M for his analysis that the circuit's new calendar format did not violate antitrust laws. The Hamburg organizers also paid economic witness Andrew Zimbalist $850 per hour, according to his expert report that was included as an exhibit in an earlier filing, though his number of hours worked on the case was not given. Walker testified Friday that because the ATP lacks market power among broadcasters, sponsors and the general entertainment universe, it could not possibly be guilty of antitrust violations. And he argued that what it stands accused of are the normal functions of a governing body. “We are talking about rules that are necessary for the ATP Tour to exist,” he told the jury. “So before we even get to the stage of measuring market shares, we know that we are concerned with conduct that's fundamentally necessary for the product to exist.” Later he added, “The end goal of antitrust is what's the impact on consumers, not, say, what is the result on a particular tournament.” Hamburg has taken a noteworthy approach to antitrust; arguing in this case the consumers are the tournaments, not the fans, and the products are the players. So by mandating the top eight events get the top players, the ATP has monopolized the players' services market. Walker responded there are many other outlets for players, like the Grand Slams, exhibitions, Davis Cup and World TeamTennis, though he came back to the point that the ATP is allowed to make rules regarding where players compete.

    SCOTT TAKES THE STAND: Also testifying Friday was Larry Scott, Chair & CEO of the Sony Ericsson WTA Tour and the former number two exec at the ATP. He advocated for the ATP’s position. A loss for the ATP could open the door for lawsuits against the WTA, which is implementing a similar plan. While the ATP’s corporate practices have come under scrutiny at the trial, certainly Hamburg did not come off so clean on Friday. The ATP unveiled an internal Hamburg spreadsheet that showed the tournament has been materially overstating its attendance by tens of thousands a year. “To have a positive PR reporting,” said Ulrich Kroeker of the German Tennis Federation, responding in a videotaped testimony played at the trial on why the federation reported false numbers. Applications for the new top tier of ATP events required at least attendance of 100,000. Hamburg reported '06 attendance of 105,300 to the ATP, but its actual attendance was 70,850.

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  • League Notes

    Greek Team Olympiakos Reportedly Considering
    Pursuing LeBron James As Free Agent In 2010
    SI.com's Ian Thomsen wrote Greek team Olympiakos reportedly is "considering a run at [Cavaliers F] LeBron James when he becomes a free agent in 2010." The rumor "was beginning to make its way through the NBA on Friday," and a source said that "it emanates from Olympiakos," which signed F Josh Childress to a three-year, $20M contract on July 23. Thomsen noted "neither the Euroleague nor Greek league impose any kind of salary cap on its teams, which means there would be no ceiling on an offer that the billionaire ownership of Olympiakos could make to James." Also, at the "most expensive levels of European basketball, the club owners are obsessed with bringing glory to their club and their fans as well as to their city and country. Imagine the glory that the recruitment of James would bring to Olympiakos." From James' point of view, playing overseas for a year "could enhance his marketing status and turn him into more of a global star than he is now" (SI.com, 8/1).

    POLICY CHANGE? SPORTINGNEWS.com's Mike Florio wrote the NFL's personal conduct policy seems to be "going more easily on players than it arguably should." Lions rookie OT Gosder Cherilus "won't be disciplined for his role in a July 2007 bar fight because the incident occurred before Cherilus entered the NFL," which marks "a dramatic change from a year ago, when [Bengals DE] Frostee Rucker was suspended for one game because of something that occurred before Rucker was drafted" in '06. The Cherilus situation "suggests that, moving forward, NFL teams drafting players who got into trouble before entering the league need not worry at all about a suspension for those pre-NFL incidents" (SPORTINGNEWS.com, 8/1).

    FURTHER REVIEW: In N.Y., Larry Brooks reported the NHL “will look into the circumstances behind the loan" from Kings Owner AEG to Predators Investor William “Boots” Del Biaggio III and loans of up to $20M to Del Biaggio from then-Predators Owner Craig Leipold. Though NHL Commissioner Gary Bettman has said that the “burden for revealing those loans fell on Del Biaggio during his application process,” sources indicated that the NHL “intends to look very, very carefully at the behavior of AEG and Leipold.” A source indicated that “even if it is not yet clear that AEG and Leipold violated those rules ... it is clear enough that all parties were obligated to report the loans to the NHL office” (N.Y. POST, 8/3).

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