The USTA’s New CEO Settled This Lawsuit Once. Will He Do It Again?

The United States Tennis Association’s new CEO may indicate a transformation in the organization’s approach to an antitrust lawsuit challenging the sport’s global order.

The USTA announced Tuesday that Craig Tiley will take over as chief executive after holding the same role with Tennis Australia since 2013. Like the USTA, Tennis Australia is both a national governing body and operator of one of the tennis calendar’s four Grand Slams, and last year, Tiley’s organization broke from its peers in a very notable way.

Under Tiley’s leadership, Tennis Australia chose to settle its piece of an antitrust lawsuit aimed at the Grand Slams and major pro tours over wage suppression and stifled sponsorship opportunities. As his organization was in the middle of settlement talks, the groups behind the French Open, Wimbledon and U.S. Open were fighting to get the lawsuit dismissed.

Now Tiley is the top executive at one of those organizations seeking a dismissal. And while Tiley hasn’t publicly commented on the issue as a USTA employee, a source close to the matter told Sportico that his handling of the lawsuit for Tennis Australia was among the main considerations in his candidacy. It’s possible Tiley will shift how the USTA handles the litigation, further fragmenting the tennis establishment at a volatile time.

A representative for the USTA declined to comment.

Last year, the Professional Tennis Players Association (PTPA), a tennis trade group, and 12 players sued six of the main entities in professional tennis over alleged violations of antitrust law in the sport. The defendants were the ATP Tour and WTA Tour, plus the organizers of the sport’s four biggest tournaments: the Fédération Française de Tennis (French Open), All England Lawn Tennis Club (Championships) Limited (Wimbledon), Tennis Australia (Australian Open) and the USTA (U.S. Open).

In January, however, Tennis Australia reached a settlement with the plaintiffs. Terms of the settlement weren’t released but on Jan. 17, the PTPA issued a statement saying the settlement “demonstrates the merits of our claims and signals that the remaining defendants may find it in their interest to engage promptly with reform.” Eleven days later, the presiding judge in the Southern District of New York, U.S. District Judge Margaret M. Garnett, granted preliminary approval to the arrangement.

Tennis Australia’s deal with the PTPA (and a potential settlement subsequent one by the USTA) might raise pressure on the remaining defendants to act similarly—especially if the agreements strengthen the PTPA’s case. For instance, a settlement might contain a pledge to provide testimony or evidence in the event the case goes to trial. Tiley and now the USTA have an inside view into that settlement and if it behooves the USTA to negotiate its own deal.

Under Tiley’s leadership, Tennis Australia found acceptable terms to resolve the PTPA and players’ grievances. Whether he can do the same for the USTA remains to be seen, especially since Tennis Australia and the USTA are different organizations with different features, but it’s clear he knows of a formula to address the PTPA’s concerns.

To that point, the case accuses the defendants of conspiring as cartel members to suppress earnings and other professional opportunities for players. One alleged method of restraining opportunities is when the tennis associations act in concert to impose participation requirements with obligations to compete exclusively in approved tournaments.

The case also involves accusations of oppressive schedules and curtailed opportunities for sponsorships. Not only are players’ economic opportunities harmed, the plaintiffs assert, but the sport is less innovative and adaptive for fans who might benefit from more competition by associations and tournaments in pursuit of players’ services.

Many of these issues have been consistent gripes by tennis players, who lack the organized unions seen in sports like the NFL, NBA and MLB. Organizing players has been a challenge given the vast array of languages, cultures, schedules and pay that exists across the sport. The PTPA was co-founded in 2020 by ATP Tour pros Novak Djokovic and Vasek Pospisil to address some of these obstacles. 

Djokovic’s name, however, was not among the plaintiffs in this antitrust filing—it’s known as Pospisil et al vs. ATP Tour Inc. et al—which deprived the lawsuit of a very prominent advocate. Then Djokovic said last month that he had left the group, citing unspecific “concerns regarding transparency, governance, and the way my voice and image have been represented.”

In court filings, the defendants insist they are not a cartel and haven’t imposed anticompetitive restraints on tennis players. Further, they underscore how Grand Slam tournaments “are not governed by the ATP and WTA rulebooks at the heart” of the plaintiffs’ legal theory.

The defendants also assert antitrust law is inapplicable since they say they are not competitors. The tournaments, a motion to dismiss filed last December stresses, take place “in four different countries, at different times of the year, and on three different surfaces.” Also mentioned in trying to repel the cartel argument is how the Tours regularly schedule non-Grand Slam tournaments.

The defense also maintains there’s an absence of “either direct or circumstantial evidence” to support a finding of a cartel agreement. In addition, while the Grand Slam Rulebook governs Grand Slam tournaments, it doesn’t govern ATP or WTA tournaments and—as the defendants see it—the plaintiffs fail to specify anticompetitive effects from the Rulebook.

Absent a settlement, the case could remain on the docket for a while.

There are deadlines through the end of March for responses and replies on the defendants’ motion to dismiss, after which Garnett, the judge, will review dueling arguments. At some point later in the spring or summer, Garnett would likely issue a ruling on the motion to dismiss. If she denies it in full or partially, she will likely order pretrial discovery. She could also break the case up and send parts of it to arbitration. The parties also have the right to file appeals to the U.S. Court of Appeals for the Second Circuit.

It would make sense for the parties to explore a settlement, and Tiley’s appointment as new USTA CEO should facilitate that goal.