Tennis Australia is facing a new crisis amid claims a potential conflict of interest could have influenced the decision to sell the television rights for the Australian Open to Seven West Media in a private deal worth around $200 million.
The decision to sell the 2015-2019 broadcasting rights to Seven West Media before launching a competitive bidding process has never been explained by the sport's governing body despite speculation it may have lost up to $50 million in potential revenue.
Fairfax Media can now reveal Tennis Australia president Steve Healy ordered an independent "review" into whether a fellow board member had an undisclosed material conflict of interest during the 2013 negotiations.
The existence of the review was revealed in a defamation lawsuit filed a fortnight ago against Mr Healy by former board member and 1970s tennis star Dr Janet Young. It is understood Dr Young was not the target of the review.
Documents filed in the Supreme Court of Victoria paint the picture of a fractious environment inside Tennis Australia and fear about bad publicity for the sport, which has also been plagued by an international match fixing scandal in the last year.
"Should this information get into the media the damage is incalculable," Mr Healy wrote in an email from December 2015, which was attached to the statement of claim.
A spokeswoman for Tennis Australia said the group had "robust" corporate governance and "no such conflict" existed in relation to the sale of its domestic broadcast rights.
Seven West Media, which is being battered by a sex scandal involving chief executive Tim Worner, did not respond for a request for comment.
At the time of the 2013 rights deal, the Tennis Australia board was reportedly divided over whether to extend its long-standing broadcasting deal with Seven West Media or launch a new competitive tender.
Seven West Media ultimately secured the five-year free-to-air, digital and mobile rights for the Australian Open for an estimated $30 million to $40 million a year without having to face off against its rivals for the lucrative contract.
The decision to forego other offers from some of Australia's largest media conglomerates baffled commentators and competitors.
"Tennis Australia has potentially done itself out of a lot of money, and that money could have been invested back in the grassroots of the game. There was no serious follow-up with us, or with Nine, or with anybody else, and it's very puzzling," a Channel 10 spokesman told Fairfax Media after the 2013 announcement.
It is unclear what information sparked the independent review into the 2013 negotiations, which was run by Sydney lawyer Quentin Digby of Herbert Smith Freehills, and BHP executive and now chairman Karen Wood.
But court documents say they were appointed by Mr Healy to examine whether a director of Tennis Australia at that time had an "undisclosed material conflict of interest" when the deal was done.
The board of Tennis Australia then included Mr Healy, Dr Young, Harold Mitchell, Chris Freeman, Ashley Cooper, Jim Davies, John Fitzgerald, Graeme Holloway and Scott Tanner.
Tennis Australia has not revealed what the review specifically found.
"Tennis Australia is very comfortable that no such conflict existed in relation to the sale of its domestic broadcast rights," a spokeswoman said.
The lawsuit was filed because Dr Young alleges she was defamed by Mr Healy after he claimed in an email that the review team had advised him that a director (who was not named) had committed a "fundamental and serious breach of directors' duties" by contacting former directors who were participating in the review.
"This conduct creates a serious risk to the reputation and perception of TA," Mr Healy wrote in an email dated 19 December 2015.
"Irrespective of the advice we receive from the review, this breach of directors' duty will need to be dealt with promptly in an appropriate manner and in accordance with the Corporations Act and our Constitution and Charter."
Dr Young claims Mr Healy defamed her because it was reasonable for others to think she was the unnamed director because of her role as the "most vocal critic" of issues relevant to the review at board meetings.
She also said she was defamed by implication and by name when Mr Healy aired the allegations during meetings.
In mid-January 2016, Dr Young and two other board members, Peter Armstrong and Kerryn Pratt, quit under circumstances that were never publicly explained.
Fairfax Media does not suggest any wrongdoing on the part of Dr Young. Mr Armstrong and Ms Pratt were not board members of Tennis Australia in 2013.
Dr Young claims she sought retractions and apologies from Mr Healy on two occasions before filing the statement of claim on December 16.
Mr Healy's defence in the lawsuit has not yet been filed.
Dr Young did not respond to a request for comment.