On August 5, 2008, in a major victory for the ATP Tour, Inc. and other individual sports leagues (as opposed to team sports), a Delaware jury unanimously dismissed antitrust claims brought by the German Tennis Federation, Rothenbaum Sports GMBH, and Qatar Tennis Federation over the ATP tennis tournament in Hamburg, Germany. Deutscher Tennis Bund v. ATP Tour, Inc., U.S. District Court for Delaware, Civil Action No. 07-178. At its core, the case is about whether the ATP Tour functions as a league. If individual sports leagues are not single entities, they face a number of difficult issues. For instance, do such leagues have scheduling rights? Can they have mandatory entry forms for players? Can they pool TV rights?
The case was based on the ATP Tour’s decision to downgrade the Hamburg tournament in 2009 from the top tier to the second tier, meaning the world’s best tennis players would not automatically be required to play there. Plaintiffs argued the ATP Tour is a cartel that illegally manipulates events and controls player movements. The ATP responded that the “lawsuit challenges the core right and authority of a professional sports league or circuit to structure and conduct its operations. . . . Without such authority, ATP is nothing more – and likely far less – than a roster and a rulebook.”
In the end, the jury decided to extend the single-entity defense to the ATP Tour. According to the jury verdict form for the Sherman Act Section 1 claim, the jury unanimously found that plaintiffs failed to prove by a preponderance of the evidence that the ATP Tour “entered into contract(s), combination(s) or conspiracy(ies) with any separate entity or entities.” U.S. District Judge Gregory M. Sleet instructed the jurors to decide “whether the ATP and its members function as a single business entity or single enterprise with respect to operating and participating in the ATP Tour, including with respect to the categorization of tournament members, the creation of an annual calendar, the setting of ranking points to be awarded for performance in different ATP events, and the adoption of rules pertaining to when and where player members shall play.” The ATP Tour was victorious in its assertion that “the ATP and its members function as a single economic enterprise for the purpose of producing the ATP brand of professional tennis through the ATP World Tour and for the purpose of carrying out the core functions of a global professional tennis tour.”
The jury also unanimously found that plaintiffs failed to prove by a preponderance of the evidence “the existence of any relevant product market(s) within any relevant geographic market(s).” This was the first question on the jury verdict form for the Sherman Act Section 2 claims of monopolization, attempted monopolization, and conspiracy to monopolize, and the jury answered all three questions in the negative. In the jury instructions, plaintiffs defined the relevant product markets as “the market for the production of top-tier men’s professional tennis, the market for player services for top-tier men’s professional tennis, the market for hosting top-tier men’s professional tennis, and/or the market for live top-tier men’s professional tennis.” The ATP Tour asserted that “Plaintiffs have failed to prove a proper relevant product market because Defendants claim that Plaintiffs’ alleged product markets do not include all reasonably interchangeable products or substitutes.” Thus, it appears the jury found the relevant product market to be more expansive then the narrow markets asserted by plaintiffs. For instance, the jurors may have considered televised tennis tournaments, other live sporting events, and other forms of entertainment.