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Page Number

75

Abstract

In an effort to revitalize its popularity and increase competition with other sports and entertainment events, the Association of Tennis Professionals ("ATP") reorganized their professional tennis circuit, the ATP Tour, in 2009. Known as the Brave New World Plan ("BNW Plan"), the redesign was intended to attract a greater number of top-tier players to the most prestigious tournaments. As a result of the reorganization, the German Tennis Championships in Hamburg, Germany was downgraded from a Tier I to a Tier II tournament.

Professional tennis players earn ATP points by playing in ATP tournaments. These points determine a player's world ranking, which in turn "governs entry into, and seeding in, the Grand Slams as well as ATP top-tier tournaments - the most important professional tennis tournaments." The BNW Plan reorganized the point system so the winner of a Tier I tournament is awarded 1000 points, while a winner of a Tier II tournament only receives 500. The BNW Plan also requires the top 30 players from the ATP rankings to play in all nine Tier I events but requires them to play in only four of the eleven Tier II events.

Unhappy with its downgrade to a Tier II tournament, the Hamburg tournament owners (the "Federations") sued ATP and certain of its officers alleging the BNW Plan violated Sections 1 and 2 of the Sherman Act and that ATP's directors breached fiduciary duties owed to the Federations. The Section 1 claim alleged the BNW Plan was an unreasonable restraint of competition in which the Tier I tournaments were shielded from competing with other tournaments. The Section 2 claim alleged the BNW Plan was an attempt to monopolize the market of professional men's tennis player's services. The Federations also claimed ATP directors breached their fiduciary duties of due care, loyalty, and good faith owed to the Federations.

Deutscher provides insight into the way courts apply the Supreme Court's decision in American Needle, Inc. v. NFL. In American Needle, the Supreme Court held that National Football League ("NFL") teams did not constitute a single entity for the purposes of licensing their intellectual property rights. Because Section 1 of the Sherman Act prohibits collusive, anticompetitive behavior, an organization that is considered a single entity is incapable of violating Section 1.1 While the Third Circuit Court of Appeals did not rule on the issue of whether the ATP constitutes a single entity under antitrust law, its opinion elicits a common view in antitrust circles: that the single entity defense for sports leagues is dead.

This comment examines that proposition. First, it looks at the various methods of antitrust analysis and relevant prior cases. Then, it analyzes each claim and both courts' respective decisions. Finally, it considers how this case may affect sports leagues in the future.

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