Farella Braun + Martel and Lieff Cabraser Announce That Elite Swimmers, Pro Swimming League, Sue FINA Over Antitrust Violations

Lawsuit alleges FINA leverages its market dominance to extract—and
largely keep for itself—enormous revenues from the labor of the world’s
best swimmers

SAN FRANCISCO–(BUSINESS WIRE)–#FINAclassAction–A pair of top U.S. swimmers and a top Hungarian swimmer filed a
class-action lawsuit today against Fédération Internationale de Natation
(“FINA”), the international organization that controls access to the
Olympic Games and World Championships, over its threats to ban swimmers
from the Olympic Games if they compete in events that FINA does not
pre-approve.

On behalf of elite swimmers around the world, the plaintiffs charge FINA
with unlawfully restraining competition in the market for top-tier
international swimming competitions. Their lawsuit follows FINA’s
crackdown against a two-day competition that a new professional league
planned to sponsor in Turin, Italy, in late December 2018. Organizers
were forced to cancel that meet after FINA said it would ban from the
Olympics any swimmer who swam in it. As result, swimmers lost the chance
to compete for more prize money and were blocked from earning appearance
fees.

The popularity of competitive swimming has soared over the last decade.
Its athletes believe a professional league that will compensate its best
athletes and better reward them for a lifetime’s worth of hard training
and sacrifice is long overdue.

Tom Shields, an Olympic gold medalist who, along with FINA World
Champion swimmer Michael Andrew and Olympic gold medalist Katinka
Hosszú, is a lead plaintiff in the proposed class-action lawsuit, said
he joined the suit because he has dreamed for years of seeing the sport
expand to include a professional league. “We are closer now than ever
before to making that dream come true,” he said. “But that dream is
being blocked by FINA.”

In a simultaneous filing, the International Swimming League (“ISL”)
separately sued FINA for its anticompetitive conduct. The ISL was
responsible for coordinating the Turin event that FINA blocked, and it
has plans to roll out a series of matches in 2019 featuring
approximately 300 of the world’s best swimmers.

“Governing bodies and commercial enterprise co-exist in other sports and
even work together for the betterment of the sport. But FINA’s
priorities just are not aligned with those of the swimmers, and as a
result the sport has not been allowed to evolve with the times,” ISL CEO
Ali Khan said. “The ISL deserves a chance to offer swimmers more
opportunity to compete and earn a living, and the swimmers deserve not
to be shackled to FINA’s whim. And the laws here and in Europe require
that ISL has that chance.”

Driven in significant part by swimming’s growing popularity, FINA earned
about $118 million in gross revenues from all aquatics events in 2016
and 2017. It paid only 12.5 percent of that amount to athletes in the
form of prize money.

“Very few select swimmers make a living swimming, while FINA is making a
killing,” said Andrew, who in 2013 became the youngest swimmer to go
pro. “FINA’s main consideration is not for swimmers. FINA set our sport
back into the dark ages by blocking ISL’s request. They can co-exist.”

To prevent swimmers from participating in non-FINA events, and thereby
maintain its control over swimmer-derived revenue, FINA recently rewrote
its rules so that it could ban swimmers from competing in events even
when they did so in their individual capacity or as part of a team that
is not affiliated with any FINA-member federation. FINA undertook that
action only after the ISL refused to pay FINA a $50 million fee that
FINA had demanded as the price for FINA’s approval of ISL events.

As alleged in the complaint, through that and other measures, FINA
effectively makes elite swimmers its world-wide captive swimmers who can
compete only in FINA events and who can earn only what FINA is willing
to pay. FINA’s actions leading to the forced cancellation of the ISL
events—initially to be in Las Vegas but which FINA pressure moved to
Italy—have been met with universal international condemnation from
swimmers. Those actions are now being met with forceful legal
challenges, the first to be pursued against FINA’s iron-fisted grip over
swimmers’ opportunities.

“There is simply no justification for FINA’s efforts to prevent ISL from
expanding opportunities for both swimmers and their millions of fans
around the world,” ISL’s Khan said.

Neither of the two lawsuits challenge FINA’s authority to operate as the
gatekeeper of the Olympic Games. Rather, they allege that FINA
unlawfully wields that power to prohibit swimmers from participating in
non-FINA events or in any events that FINA does not formally approve.

Katinka Hosszú, a three-time Olympic gold medalist and seven-time World
Champion, said the lawsuit instead seeks to allow swimmers a fighting
chance to earn their due. “My passion has always been to push swimming
in the direction where swimmers are partners of the governing body, not
just muppets,” she said. “ISL takes swimmers seriously, not like FINA.”

The lawsuits state claims for violations of the Sherman Act, for
tortious interference with contractual relations or prospective economic
relations, for collusion to unreasonably restrict competition, and for
monopoly. The lawsuits seek injunctive relief and monetary damages for
the named plaintiffs and for all class members.

The class-action lawsuit is Shields, et al. v. FINA, Case No.
18-cv-07393. ISL’s lawsuit is International Swimming League, Ltd. v.
FINA
, Case No. 18-cv-07394. Both suits are pending in the U.S.
District Court for the Northern District of California.

Read a copy of the Class
Action Complaint
.

Contacts

Source/Contacts
Neil Goteiner
Farella Braun + Martel LLP
235
Montgomery Street, 17th Floor
San Francisco, California 94104
Telephone:
(415) 954-4400
ngoteiner@fbm.com

Eric B. Fastiff
Lieff Cabraser Heimann & Bernstein, LLP
275
Battery Street, 29th Floor
San Francisco, CA 94111
Telephone:
(415) 956-1000
efastiff@lchb.com

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