Courtesy: Google
The leading sports and media investment company Kosmos, formed by Spanish football player Gerard Pique, and the International Tennis Federation (ITF) regulatory body have finally settled their long-running legal disagreement over the ITF's decision to end its 25-year Davis Cup contract early in 2023. According to the ITF, the two entities have "reached an amicable resolution regarding their previous contractual disagreements related to the organisation of the Davis Cup." The release concluded with the ITF stating that "both organizations wish each other success in their future projects."
Kosmos signed a 25-year deal worth $3 billion with ITF to co-run men's Davis Cup in 2018. The ITF stated at the time that the agreement will protect the historic Davis Cup competition, allow them to invest around $25 million annually in all levels of the sport, and "deliver long-term benefits for players and sponsors”. The relationship with the 2010 World Cup winner's company also resulted in the 123-year-old tournament being changed to an end-of-season 'World Cup-style' event, which proved divisive among participants.
Abrupt end of Davis Cup agreement between Kosmos and ITF
As per the agreement, Kosmos agreed to control commercial rights to the final match of Davis Cup. This further includes broadcasting, sponsorship, and hosting cities. However, due to failure in delivering as per the promise and deal to organize the flagship event, the ITF declared that the agreement would expire prematurely in January 2023. According to reports, Kosmos had failed to pay the ITF's annual fee of $43.5 million and had demanded a renegotiation owing to low profitability. After the ITF declined, the deal was terminated.
Kosmos then launched a lawsuit at the Court of Arbitration for Sport (CAS), and accused ITF of an "unjustified termination" of the contract and seeking damages. ITF, on the other hand, decided to take legal action against Kosmos for breaching its contract and for "accumulated debts and damages”. The last three Davis Cups presided over by Kosmos were plagued by challenges such as low attendance, scheduling conflicts, and top players opting out of the event.
Earlier, when Kosmos decided to change the overall format of the tournament in 2019, it faced a lot of flak from fans and players. Among the top players were legend Roger Federer and former world number one Lleyton Hewitt, who believed that the move away from home-and-away ties undermined the tournament's spirit. Kosmos later replaced the format of the game with a traditional structure having a single home-and-away round of ties, followed by 18 teams participating in a single city for a week-long season finale competition.
