Tuesday, July 29, 2008

ATP vs Hamburg Day 6

by Savannah

Charlie Passarell's Vote At Issue In Ongoing ATP-Hamburg Trial

By Daniel Kaplan, Staff Writer, SportsBusiness Journal

Attorney For Hamburg Event Focuses On ATP BOD Member's Vote To Demote Tournament

The ATP antitrust trial continued into its sixth day yesterday, with the lawyer for the Hamburg, Germany, tournament arguing a key board vote for the calendar restructuring at the heart of the issue was improper under the circuit’s bylaws. The German and Arab organizers of the Hamburg stop are suing because the tourney is being demoted from the first to second tier of events under the new plan, which was passed by the ATP board in January '07 by a vote of six to one. One of those six votes was Charlie Passarell, who also owns 22% of the Masters Series event in Indian Wells, California. Hamburg attorney Rob MacGill argued that ATP bylaws prevent board members from voting on matters in which they have a financial interest. Because the single no vote was one of the three tournament reps on the board, and two of the three were required for passage, had Passarell abstained the controversial system would not have passed. Passarell argued he did not consider himself to have a financial incentive in the vote because his tournament did not need the new system to thrive, even though it would become one of the top eight events instead of one of nine. The issue was not the only one in which MacGill pounded Passarell. MacGill has made a big issue during the trial of alleged conflict of interests among ATP board members. The Indian Wells tournament paid a $1M transfer fee to the ATP in '06 for the sale of half of the men’s event, which was valued at $20M in full. But Doha, Qatar, had a $58M proposal on the table, which included the WTA event too. And in a '99 transaction, the transfer fee for the sale of the Masters Series event in Miami was based on a higher competing offer, MacGill said. IMG paid $33M for that event, but according to MacGill, ProServ had bid $40M. MacGill’s inference clearly was that as a board member, Passarell received preferential treatment.

ZIMBALIST BACK ON THE STAND: On another matter, the controversial testimony of sports economist Andrew Zimbalist is now scheduled to begin again. His appearance last Thursday caused an uproar when it was discovered he had an outline in front of him, contrary to court protocol. Judge Gregory Sleet said he would allow Zimbalist to continue testifying today, but the judge still has not decided whether to strike his testimony. Also, he will allow a lawyer for two of the ATP board members to ask him if he was instructed to bring the document to the stand with him. MacGill said he told Zimbalist not to bring it up with him, but upon learning of that contention after his abbreviated testimony Thursday, Zimbalist reacted angrily, according to a court transcript, and tried to reach the judge and court clerk.


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