The ATP’s top nine events are threatening to sue the tour for agreeing to raise their prize money without the events’ consent, a potential bonfire that could threaten the delicate balance of a circuit run by both management and labor. In a strongly worded letter last Monday to ATP Exec Chair & President Chris Kermode, the nine tourneys wrote, “The Events are not willing to jeopardize their businesses by agreeing to the unsustainable demands being sought by the ATP Board player representatives. If ATP management [i.e. Kermode] votes to approve a prize money increase at the Events without a single vote in favor from the ATP Board tournament representatives, then the Events will have no choice but to carefully examine and pursue their legal rights and remedies.” THE DAILY obtained a copy of the letter. That vote is exactly what occurred, with Kermode casting the tiebreaking ballot in a 4-3 decision. The three votes against were tournament reps. The tournament board members represent all ATP events, not just the top nine. Shortly before that vote, the ATP responded in writing to the top tournaments in a letter that was also copied to Brad Ruskin, the ATP’s outside counsel at Proskauer Rose. “We do not intend to respond to any of the various express or implied legal statements in your letter, except to state that ATP expects each of the Tournament Class members to comply with any rules, resolutions, bylaws, or agreements of the ATP, including, without limitation, any rules or resolutions of the ATP relating to prize money (or any other subject) adopted by the ATP Board.” Mark Young, the ATP’s chief legal officer, signed the letter, which THE DAILY also obtained a copy of. It is unclear what legal basis the events might have to challenge the prize money increases, given they are bound as members of the ATP.
GOING INSIDE THE NUMBERS: The top events, or 1000s as they are knows, paid out about half of the $93M in prize money this year. They had offered a 5.8% annual increase over four years, and a chance to share with players half of ATP Media revenues. According to the proposal accompanying their letter, that would have doubled the players’ percent share to over 11% annually. The players, by contrast, had wanted 17% annual increases, and came down to 11% when Kermode indicated he would vote for that. Kermode also agreed to have the ATP directly contribute money that would boost the players’ annual increase to 14%. The players rejected the ATP proposal of a split between direct contributions from the 1000s, and one from ATP Media. The agreement approved in the 4-3 vote includes a provision that if the tournaments submit to audits and they show they are indeed in financial distress, after two years the prize money decision can be revisited.
TENSIONS RUNNING HIGH: Formed in ‘90, the ATP is run by the three player reps and three tournament reps. The president casts the tiebreaking vote, though the process is designed to ensure consensus, which did not occur here. A source familiar with the process said by the end, tensions were so high between the two sides, they were negotiating through Kermode and not with each other. Also added to the mix is the Masters 1000 hiring their own negotiator, former U.S. Open Tournament Dir Jim Curley. He declined to comment. The U.S. Open is owned by the USTA, which also owns one of the 1000s, the Cincinnati stop. The other events are in Miami; Canada; Indian Wells, Calif.; Paris; Monte Carlo; Rome; Madrid; and Shanghai.
VARYING INCREASE FOR MALE, FEMALE PLAYERS? One subtext to the controversy is the nine events wanted to find a way to increase the male players’ prize money, but not at the same rate as the women. While this is an ATP issue, the tournaments are combined with WTA events and some offer equal prize money. By splitting the increase between money from the tournaments and money from ATP Media, the tourney could then shield half the increase from women players. “The current proposal from ATP Management … would result in more than $14.7 million in incremental on-site prize money to the women players over the next four years at Indian Wells, Miami and Madrid,” the nine events wrote to Kermode. “This is not sustainable.”
