$12 Million Fight|Over US Open Tennis


     WHITE PLAINS, N.Y. (CN) – The U.S. Tennis Association claims Olympus is trying to back out of a longstanding commitment to sponsor the U.S. Open, because the camera company wants to save the $11.7 million that it will cost to sponsor the games in 2011.
     The USTA claims Olympus manufactured a dispute so it could accuse the USTA of allowing Panasonic to breach Olympus’ exclusive contract for camera products.
     The USTA, U.S. Open Series and USTA National Tennis Center say Olympus and its corporate parent in Japan have been hurting in the current economic recession and are trying to withdraw as sponsors of the U.S. Open as part of their cost-reduction strategy.
     The groundless accusations about Panasonic give Olympus cause for premature termination of its obligations to the USTA through 2013, according to the complaint in Westchester County Court.
     “Olympus has repudiated its own reciprocal promises to the USTA, USOS LLC and USTA NTC and has sought to contrive an illusory pretense on which to avoid significant continuing financial commitment Olympus (and its subsidiary Olympus Imaging) are obligated to pay to the USTA, USOS LLC and USTA NTC,” according to the complaint.
     In 15 years of partnership agreements, the USTA says, it has never had a legal dispute that culminated in litigation. Olympus has been a sponsor since 2003.
     The USTA says the issues here stem from its collaboration this year with CBS Sports, DirecTV and Panasonic to film and broadcast U.S. Open matches in 3D.
     “Because Panasonic is expressly identified in the Olympus agreement as not being a ‘competitive company’ with regard to Olympus and because the scope of the two sponsorship agreements are markedly different, there is no conflict between the two sponsorship,” according to the complaint.
     The USTA says it kept Olympus apprised of the negotiations with Panasonic and made sure there was no confusion about the products Panasonic was advertising – video equipment such as televisions and Blu-Ray players, not camera equipment that competes with Olympus products.
     “The USTA went to considerable lengths to ensure that Olympus was well informed about the 3D sponsorship with Panasonic, that Panasonic’s rights did not infringe upon Olympus’ exclusive category rights and that the two sponsorships could peacefully co-exist,” according to the complaint.
     Though the USTA monitored both Panasonic and Olympus at the 2010 U.S. Open to make sure neither company encroached upon the other, the USTA says a verbal slip-up gave Olympus the pretense it needed to seek early termination.
     Panasonic executive Peter Fannon said in a press conference that Panasonic products could bring 3D live action “from the camera to the couch,” but the USTA claims Dealerscope magazine quoted Fannon’s statement in the wrong context.
     “Olympus has seized upon this statement by Panasonic, taken out of context by a third-party reporter, as a purported basis to terminate all of its and Olympus Imaging’s agreements with the plaintiffs and to relieve itself of its significant financial obligations to the USTA, USOS LLC and USTA NTC,” according to the complaint.
     Olympus has the option to terminate the agreement after 2011, but is trying to duck its obligation a year early to save the $11.65 million required to sponsor the 2011 matches, the USTA says.
     “Not content simply to avoid the final two years of its sponsorship commitment, Olympus concocted, as set forth below, an illusory basis on which to avoid the significant financial commitment it is required to pay the USTA, USOS LLC and USTA NTC for 2011 as well,” according to the complaint.
     The USTA seeks $11.65 million for breach of contract, and declaratory judgment that it did not violate Olympus’ exclusive sponsorship rights. It is represented by Jeffrey Carton with Meiselman Denlea.

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