Judge Rules For ATP In Hamburg Trial; Tour Could Seek Legal Fees

By Daniel Kaplan, Staff Writer, SportsBusiness Journal

Jury Rules In Favor Of ATP In Antitrust Case

The ATP Tour last night won a resounding legal victory in the antitrust case brought against the circuit by its Hamburg, Germany, event, and now the major unresolved issue becomes whether the tour seeks to recoup legal fees. Under ATP bylaws, the tour can recoup legal fees if one of its members unsuccessfully sues the tour, which is now the case. The legal fees, one source said, were as high as $14M, though an ATP spokesperson said he could not confirm that number. As of March, the fees were $7M, though that was several months before the trial. Given that the Hamburg tournament has lost money every year since '02, according to the court testimony, if the ATP enforced this bylaw it could possibly doom the event. One-quarter of the event is owned by Qatar Tennis Federation (QTF), which has far deeper pockets that the German Tennis Federation, which owns the other 75%. An ATP spokesperson said no decision had been made on whether to insist legal fees are repaid. In a press release issued shortly after the jury handed down the verdict, the ATP said the slot on the second tier of events remained open for Hamburg. Hamburg had sued because it was designated for demotion from the first to the second tier. Calls to the Hamburg attorney, Rob MacGill, about whether he would appeal, were not returned.

VICTORY FOR DE VILLIERS: The decision appears to be a resounding victory for often embattled ATP Tour Chair & President Etienne de Villiers, who took enormous risks and heat for not settling with Hamburg and leaving the future of the tour with a jury. If the ATP lost, it could have meant it could not reorder the calendar, mandate where players play or even pool media rights. It is also a victory for other non-team sports, which could have been impacted as well. The jury's decision will likely be interpreted as meaning that non-team sports are entitled to some form of antitrust protections, which is a landmark development in sports. Team sports have long had varying degrees of antitrust protections because they are viewed as single entities, but no antitrust case had ever reached trial in non-team sports before this case. Hamburg had argued that the ATP was composed of 63 individual events and was not a single entity, and so could not tell tournaments and players what to do. The jury rejected that opinion.

COULD STILL FACE PROBLEMS: The ATP’s headaches though may still not be over. Sources have said that many of the top eight events still want a declaration from the ATP that their sanctions are permanent, and their lawyer, Peter Lawler, has said previously he will contact the ATP as soon as the case is over. However, given the legal ruling that seems to give the ATP much greater authority, it is unclear how that issue will play out. Hamburg had argued it was entitled to a permanent place in the top tier if it abided by tour rules. The ATP has offered 10-year sanctions as a guiding rule for the elite eight, but many of these stops believe the tour should not have the right to revoke their status. And whether de Villiers’ issues are over is still unclear. The three player board reps that were defendants in the case all had been voted out by the players in the last few months because of discontent over how management communicated the onrush of changes. de Villiers' term expires in December, and the players have demanded other candidates be considered for the job.

TOO MUCH DISCLOSED? Even with the win, there is already grumbling in some tennis circles that so much of the ATP’s internal workings and financial information had been layed out in the court room. To that point, while the ATP won and the judge overseeing the case dismissed the charges against the individual board members Monday, he did not let them go unscathed verbally. Judge Gregory Sleet termed some of their actions to be in a legal grey area, and specifically called the conduct of one board member, Iggy Jovanovic, questionable. Jovanovic had brokered a sponsor deal for one of the elite eight events, and had consulted Abu Dhabi about procuring a tennis event, and had put the Doha, Qatar, event on his hit list. The QTF owns this event.

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