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What impact will the ATP antitrust lawsuit have on non-team sports governing bodies?

By Rick Karcher, Michael McCann, Geoffrey Rapp, Greg Skidmore, and Howard Wasserman

Two months ago, I argued that sound policy reasons exist to support the application of an antitrust exemption for professional tennis and golf relating to rules and decisions of the governing bodies with respect to playing conditions and other issues that primarily affect the players, such as format of play, the number and location of tournaments, how they are going to be ranked, etc., etc.. As the ATP prepares for trial in 14 days to defend its decision to downgrade the Hamburg, Germany tournament sanction, SportsBusiness Journal's Daniel Kaplan probes the question what impact an ATP loss at trial would have on the governance of all non-team sports governing bodies (ATP Suit Could Remake Non-Team Sports, 7/7/08, subscription required).

Kaplan makes an interesting observation:

I would add a third possibility. And that is if the ATP is viewed as an association of players who should have the right to determine playing conditions and other issues that primarily affect them. The ATP was formed as a players association, and it has elected player representatives serving on its board. To me, the player representative component has to be factored into the antitrust analysis, and is what distinguishes the ATP, PGA and LPGA from other sports governing bodies that do not have player membership (for example, NASCAR and the NCAA). As Kaplan notes, this case "could determine just how far a rules-making body can go in setting tournament schedules, compelling players to compete in certain events, establishing a ranking system and awarding sanctions." If any third party can successfully challenge rules that the players have agreed to be in their collective best interest, then these governing bodies are at risk, it's as simple as that, because third parties are going to be adversely affected in one way or another. Where do you draw the line? [The ATP settled an antitrust lawsuit with the Monte Carlo event regarding the same issue.]

If the NFL and the players decided that playing in China (or Hamburg for that matter) was not in their best interest, a court simply would not hesitate to dismiss an antitrust challenge by the event organizers in China and Hamburg, either on the basis of the non-statutory labor exemption or because the event organizers would be viewed as "jilted distributors". So is there a compelling justification for treating the non-team sports different from the team sports in applying antitrust law?

Full post as published by Sports Law Blog on July 07, 2008 (boomark / email).