Thursday, July 31, 2008

ATP vs Hamburg Day 8 - The USTA Enters the Picture

Posted by Savannah

De Villiers Testifies USTA Opposed Moving Hamburg Tournament

By Daniel Kaplan, Staff Writer, SportsBusiness Journal

De Villiers Testifies That USTA Opposed Moving Hamburg Tournament To Summer

The USTA strongly opposed moving the Hamburg, Germany, tournament to the summer if it kept its top tier ranking, ATP Chair & President Etienne de Villiers testified in the circuit’s antitrust trial yesterday. The German and Arab organizers of Hamburg are suing the ATP for demoting their event from the top to second tier and moving it into the summer from the spring. Discussions during ‘06, before the plan was set, to perhaps move Hamburg intact as an elite event to the summer would have created a problem for the USTA’s U.S. Open Series, the branded swing of hard court events leading up to the U.S. Open. “He feels it is a major distraction and will draw players away,” de Villiers wrote in an e-mail that was read into the record by the Hamburg attorney, referring to USTA Chief Exec of Professional Tennis Arlen Kantarian. “It is not a surprising notion and given their support and leadership in the marketing of the game, I would be very reluctant to support something they do not.” Opponents of the plan within tennis have argued the European events took it on the chin while the American events were protected. “There appears to be an inherent bias in the ATP's plan in favor of certain events,” a group of 20 European tournament directors wrote to de Villiers in January ‘07 in a letter read into the testimony. Asked which tournaments the process was biased toward, Zeljko Franulovic, the lone ATP board director who opposed the plan, testified via video deposition that it was the American events that were favored. The issues cut to the heart of one of Hamburg’s main contentions, that the ATP board did not conduct a fair process to select its elite events. And de Villiers conceded in his testimony that the process was by invitation only and not an open auction.

ATP OFFERS MOTIONS TO DISMISS: After Hamburg rested its case yesterday, the counsel for the ATP offered four motions to dismiss the charges, which the judge can take up at any time between now and when the jury gets the case, which is expected to be early next week. Judge Gregory Sleet also apparently has not decided whether to strike the testimony of sports economist Andrew Zimbalist, which is crucial to the Hamburg case in that he provides the economic justification for the antitrust charge. However, his testimony last Thursday, in which he broke court protocols and brought an outline of his testimony on the stand, is still percolating as problem. “I want to be careful in what I say here,” Sleet told the counsels. “Of course, it's not my assessment as to his credibility that matters a whit. But I'm disturbed by a gentleman of the kind of educational background, who has been in court as much as he has, doing what he did in this case and to some extent putting it on counsel.” By putting it on counsel, Sleet meant that Zimbalist disagreed with Hamburg attorney Rob MacGill’s contention that he had told the professor not to bring anything up to the stand.

ZIMBALIST'S METHODOLOGY AT ISSUE: The ATP also again took issue with Zimbalist's methodology, which treats the relevant market for tennis as only inclusive of tournament sanctions and players, and does not look at the market for tennis in the broader entertainment landscape. Even MacGill conceded this interpretation was very subtle and nuanced. Essentially the injury being alleged is to players and tournament owners, not to average consumers, sponsors or broadcasters. Traditional antitrust cases refer to injury to consumers. At one point, Sleet said, “So maybe it's (Roger) Federer and (Rafael) Nadal that needs to be the plaintiffs here.”


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