New balls please.

Congratulations to Jannik Sinner, winner of two Slams this year.

Thanks to this splendid young man and champion, our household is obliged by my wife to see a lot of tennis these days, enjoying Italy’s finest era in the sport from the front seats. The country in 2024 has had players in the finals (men or women) of every Slam, they hold the Davis Cup, and new names burst forward every single day, it seems. The Chairman of the ATP is also an Italian, ex player Andrea Gaudenzi. 

But this Column isn’t about the rise of Italian tennis; it’s just about tennis. 

A sport about which I personally have been very gloomy in recent years, faced with the new competition of pickleball and padel, and what seemed a dearth of new exciting personalities. My view is changing, perhaps just coloured by the red white and green of my current residence!

Today will be a naive outsider’s view of where a sport is, along the lines of similar previous diary pieces on American college sport, women’s football and rugby union.

It’s what we do on a Sunday. 

 

Stanley, Monique and George in real life?

Sinner aside, it’s actually a very opportune time to have a look at tennis, not least as the major governing bodies, the ATP and the WTA, are reported in the media to be employing the most famous management consultants of all, McKinsey, to assess various aspects of their structures, governance, business model and vision.

It’s a big moment for this sport. A crossroads.

McKinsey will likely be costing tennis seven, maybe eight, figures as a total bill, but Column readers today will get my own humble and ill-informed thoughts for free, just for the cost of 20 minutes of their time. 😉

I did think for a brief moment to do this whole piece through the narrative prop of my own fictional McKinsey sport consultants Stanley, Monique and George, but even for me that’s too precarious a risk, and I don’t want any law suits. This article will be punchy enough without my French girl’s Angelina Jolie persona and short skirts.

 

Show me the incentives and I’ll show you the outcomes.

One of the most important things to understand in business and finance is also the most simple. 

The key categories of agency paid to give serious opinions on stuff, and to check the veracity of various statements, are usually directly remunerated by the very people on which they are opining. 

Auditors, credit rating agencies and management consultants are selected, and paid, by the clients they are “evaluating”. Boards of Directors for auditors, providers of debt for ratings agencies, CEOs for management consultants. So, very simply, all of these service providers are often somewhat conflicted in whatever advice they eventually give, and history all too frequently shows the effects of all that. Look at the accounting scandals at many high profile companies, the “money-good” debt instruments which weren’t worth the paper they were written on, the consultancy tomes conveniently backing up the direction a CEO had wanted to pursue all along (but with the added brand credibility of a top firm, that a Board will then find very difficult to contradict).

Let all that realpolitik sink in. This is the life we have chosen, and It is one of the most important insights in all of business and finance. You are putting your trust in people who want to make happy the clients who pay them.

That is NOT you. Caveat Emptor. 

 

An outsider has the advantage of no conflicts.

So anyone giving an opinion, being a paid consultant, a podcaster, a sportbiz influencer, should always be obliged to state their knowledge, experience, and baggage, up-front, as full context. 

So, here is mine.

I have no dog in this fight. None whatsoever. And no inside knowledge. 

Tennis for 1970s UK teens like me only existed in a two-week window of exposure and interest around Wimbledon. Outside that, it was utterly meaningless, as in those days television in Britain didn’t cover the other three Slams, far less the year-round Tour. Back then, in a simpler world, the sport seemed to be almost exclusively an Australian thing, with names and faces that still resonate to this day. Newcombe, Goolagong, Laver, Rosewell, Roach, Margaret Court. 

Connors ended all that as an uncouth All-American with a bad haircut and a Miss World girlfriend. The rockstar Bjorn Borg came along next (with sundry Swedes in his wake), unseated finally by the anti-hero genius McEnroe. Becker led a brief period of German dominance, before Nike and the new kids on the block of Sampras and Agassi started a duopoly. The last 20 years has seen the era of the Big Three: Federer, Nadal and Nole. 

On the woman’s side, my summary would be Margaret Court and Billy-Jean King, usurped by graceful super-talented Chrissie Evert, in rivalry with the all-court steamroller of Navratilova, and then the panzer that was Steffi Graf. Monica Seles had a moment of supremacy before being stabbed by a fan, and then we had the Williams sisters. This I realise is overly superficial, but I need to admit very little interest in women’s tennis over the years beyond Kournikova and Sharapova. And before you spit out your cornflakes in outrage, I hold that view in common with most paying sponsors. Money gravitated to the pretty girls and still does. Sex always sells. Look at the endorsement numbers of Emma R. Or the profits of OnlyFans. 

The messenger bringing honesty should never be shot. 

 

Enough knowledge to be dangerous.

I was 9 in 1973 when they told us that there would be no decent players at The All England Club that year. I didn’t know what that even meant, but Ille Nastase was still there, so when you heard the BBC talking about boycotts, you just thought of Sir Geoffrey.  

But it was right then, at this moment, that the sport started on the road that leads to the structural and governance chaos of today. The ATP, the men’s Tour, was formed in 1972, basically as some kind of player’s union, and the “cancelling” of Wimbledon 9 months later was their first show of force in protest at one of their own players, Nikola Pilic, being punished by the International Tennis Federation (don’t ask!) for not turning up for Yugoslavia’s Davis Cup match. 

So, in summary, I am not a tennis expert at all, but I can hold a very credible 30m conversation with anyone, if needed. Today, as a fan, I’ll watch, or be forced to watch, the Grand Slams, especially if the top players are in the semis and finals. I’ll struggle to stay attentive beyond 3 sets, and no game will hold me more than 2 hours. I am a passer-by tennis consumer, and know absolutely nothing about how the sport is run. 

 

Let’s put that right today, shall we?

Always start with a bit of research and see what is in the public domain.

Luckily, tennis seems to be a very “leaky” sport, and we are not short of incredibly detailed “beef” and gossip, clearly spoon-fed to journalists by the myriad stakeholders with very specific personal agendas. 

🎶 Loose lips on ships, I’m getting to grip with what you said. 🎶

One could argue that if you know sport, and its business, in any kind of depth, all you need to do in tennis is to collate and edit what is already out there. 

 

Just follow the money. 

Who runs and owns the sport of tennis? Where does the money come from and go? This is always how any CFO thinks. The numbers tell you almost everything if you know where to look.

The ATP (and the female version, the WTA) are built like all sports leagues, as not-for-profit, distributing back to shareholders and members all the revenues, (less their exorbitant costs). Each underlying tournament, independently owned, has its own P&L account that is usually in profit. Tickets and sponsorships are sold by these events, and the monies from the ATP/WTA central media and betting deals are sent to them, on top.

Like in any league, one of the biggest challenges around these centrally-commercialised bundles is how to distribute the monies (back to each tournament in this case), but to be fair, the ATP seems to have worked that out very well without public polemic, especially as all the value is in ATP 1000 Series tournaments. That bit is working well, much better than in what I saw directly in football.

As you would expect, player remuneration at each of these events is capped to guarantee a margin for the owner, and let’s just say that those playing in the 500 and 250 Series are not driving Ferraris. In a lot of countries, tennis may indeed be the second most popular sport, and has some megastars who are among the most highly paid athletes in the world, but this ATP/WTA model today can support only 100 or so players.

That is not enough.

Tennis as a sport, and as a business, is therefore vulnerable. Some would say more than vulnerable. 

 

“Tennis as a sport is a failing enterprise.” NYT

The lesson for all sports in these “disruption years” is that the control and contentment of your players is essential for your product, your revenues and your future. If you can’t achieve that, challenger leagues are just around the corner. 

Tennis is Wall Street’s favorite spectator sports event — a place to see and be seen. The stands in Flushing Meadows, Queens, are filled with Wall Street titans and corporate America’s top executives. Presiding there is Jamie Dimon, chief executive of JPMorgan Chase, the Open’s top sponsor, feting clients who have flown in from Silicon Valley, Miami and practically everywhere in between. Bill Gates, a longtime tennis fan, regularly attends. Virtually every major Wall Street bank has a private suite or courtside seats for entertaining. Hedge fund magnates are also out in force, led by Bill Ackman, who is such a tennis fan that he built a court on the roof of his office and has personally sponsored players. And yet the business of tennis, if judged by Wall Street standards, increasingly looks like a failing enterprise. If it were a company, activist shareholders would have already descended, calling for a restructuring. In fact, some are, raising the prospect of a turnaround effort or else the risk that a competitor could emerge to steal tennis players the same way LIV Golf has sought to upend the PGA Tour.

Failing enterprise needing activist shareholders to shake it up? 

That NYT op-ed may be somewhat hyperbolic, but, in truth, once you start looking closely at this sport for the first time, as in my case today, the story unfolds as perhaps the juiciest of all in the sportsbiz, and maybe the Times isn’t far off the mark. 

Tennis has product/market fit questions around the format of its offering, and the forces of the ripping polarisation into Hollywood and Arthouse. Its stakeholder democracy and governance are horrendously complicated and conflicted, all dominated by high politics. It has a worried, but powerful, incumbent stakeholder, IMG, that plays an incestuous role across all of the value chain, in broking media rights, representing players, TV production, and actually owning tournaments. There is also the, by now, mandatory private equity investment (from CVC) that once again looks poorly thought-out and now adrift. Middle Eastern ”activist” capital is sniffing around.

 

An entire bingo card of threats.

Its players, all private contractors, are feeling things could be managed so much better, and they are starting to seriously agitate. The women’s game is struggling to reconcile the desire for equal pay, despite having verifiably much weaker commercial appeal. Revenues are obviously dependent on the health of ongoing media rights values, putting a major question mark on its entire business model going forward; (the ATP is trying to address that one with its own direct-to-consumer DTC media hub). And finally, tennis’ dirty little secret, like so many sports, is how much their product now is a financier’s play on betting. 

The sport frankly has the whole fucking bingo card of issues from Sports Perfect Storm, even more so than golf, and considering the current shambles of the PGA and DPWorld Tours, maybe Gaudenzi isn’t wrong in asking McKinsey. 

The Italian is a very interesting character, an Alpha male, and in many ways I admire him. He risks with his chin out, and whether right or wrong, at least shows some leadership. My kind of guy, even if I’ve never met him.

 

Can the McKinsey report be objective? 

Like so many sports, with their super-ego personalities, this is ultimately a story about power, and here is the full cast of tennis’ Game of Thrones. 

• The ATP (and its tournament owners)
• The WTA (and its tournament owners)
• The Four Grand Slams
• CVC
• Broadcasters like Sinclair, ESPN and Comcast
• Agencies like IMG and Octagon
• Sponsors like JP Morgan, Rolex and Emirates
• Hedge Funds Billionaires like Bill Ackman
• Culture Warriors on the equal pay agenda
• Sovereign Wealth
• The Players

And as always in our industry, the simple fan, comes last.

But never in this Column. 

 

You can’t buck the market of fan demand.

As stated, tennis still has significant product/market fit issues, even if one needs to admit that it is indeed “on a roll”.

It has irregular match times, and games can be over four hours long, finishing in the wee small hours. None of that jives with today’s content market, and that is starting to show. Viewership of Grand Slam tournaments has been declining over recent years, and has plummeted by three to four million viewers (Krishna 2023). 

So there needs to be serious lateral thought and innovation about what the fan and the market really wants from tennis. More so in this polarising economy for sport, where everyone now looks for Hollywood box office and celeb attention. The market desires the top players, competing in storied Grand Slam tournaments with recognisable trophies, ideally with the stands full of famous OMG followers.

Alright, alright, alright!

Change is most definitely needed, and good consultancy advice is worth paying for, but you can’t ever adapt the product of sport without knowing if the structures and democracy will even allow you to do that.

 

The shambles of tennis governance.

The ATP

Since 1990 the ATP has organized and controlled the men’s game with its Tour of a global travelling circus, made up of various (50 or so) tournaments, none of which are Grand Slams. These events are independently owned by various people and institutions, including IMG, and there are different categories of ATP tournamant reflecting the standard of player you can expect to see; 1000, 500, 250. Most of these (80%) are with the lower profile of athlete, and that is just a very long tail with little commercial value.

So, to be very very clear, the ATP is now no longer just a players’ union, and crucially, its structures and governance reflect its all-encompassing stakeholder base. Different to golf’s PGA, it doesn’t just look after players’ interests, but also those of the tournament owners, and those priorities are often diametrically opposed. 

 

The WTA

The WTA for women is pretty similar to all this, but they also have a bigger issue in finding the money to aspire to equal pay with the men, when the economic fundamentals just don’t back that up. The CVC investment they took has likely gone too much into financing that dogma. 

 

The Grand Slams/Majors

The Grand Slams are independently owned. The USTA, for example, the governing body of American tennis, owns the US Open. Same set up for Roland Garros, owned by the French Federation. Wimbledon and the Australian Open are similarly detached from the ATP and WTA. Like in golf, the Majors in reality sit above the sport, dominating it in appeal, importance, and economics. A Slam in value is equivalent to a major European football club. Any ATP/WTA event comes far far behind that. 

 

The ITF

For those that earlier did want to ask about the International Tennis Federation (ITF); they call themselves the governing body of world tennis and comprise all national Federations, and run the Davis Cup and the Olympics. They set rules, and look after anti-doping and anti-corruption. 

 

So, tennis is run by seven organisations: the four Grand Slam tournaments; the WTA; the ATP; and the ITF. 

The New York Times again, saying it best….

Each of those organisations has its own CEO, layers of management and P.R. staff, and there’s a lot of overlap and overhead. You’re supporting a lot of lifestyles there. From a player’s perspective, people are paying money to see them. But the money those players are producing is going to pay for a lot of senior vice presidents. They often wonder: Are these organizations built to serve the players, or to serve themselves? I was speaking with an executive from BNP Paribas, probably the biggest sponsor of tennis in the world. He said: I’m a banker, so I’m used to dealing with a lot of bureaucracy. But it’s a little like running a bank in the U.S.: You have to deal with the Fed and S.E.C. and F.D.I.C. and this whole alphabet soup of organizations. You can sort of justify it in banking, but in a sport do you really need all that bureaucracy? 

Boom.

Same old same old in our industry of sport, undeniably out of date and “totally adrift”. 

 

The ATP (and WTA) knows it’s in trouble.

The afore-mentioned ambitious CEO of the ATP, Gaudenzi, is fighting hard to keep his organisation alive, or at least relevant. When he came in, he did the obligatory Mission Statement thing, which he called OneVision. 

I have read this… so you don’t have to, because it’s the usual meaningless word salad pap. I can’t sugar-coat this. It’s the same kind of committee-compromise guff, shuffling chairs on the Titanic, that has also come out of the PGA in recent years. More tournaments, bonus pools and upside for top players, better governance, new structures for commercialisation. A new data venture for betting. More collaboration with other stakeholders in tennis.

Yadda Yadda!

Nothing, instead, is in there to address the real existential problems. It’s simply a political manifesto to maintain and solidify the shareholder base that keeps the ATP in existence. They are in power because the long tail of smaller tournament owners and players wants their interests to be protected.

The tail sadly is wagging the dog in this glorious sport, and in fact that would be a good final title for the whole McKinsey report, if truth be told.

Producers of the Netflix docu-series “Break Point” asked Guadenzi, if they could film one of the ATP board meetings (which would have been great TV), but he politely declined the request!

It probably would have been highly entertaining…

ATP Chairman Andrea Gaudenzi said, laughing.

…But, please, something easier, something less controversial.

Gaudenzi shows here that he knows he really has an impossible job. As is the case in the leadership of almost all sports, all FAs, all Rugby Unions.

So I have no value judgement on this ex-player and his attempt at a OneVision. Until you yourself have tasted the sawdust of that stage in one of these roles, you just don’t know. He is at least trying to move ahead.

 

Merging two weak companies never works.

Phase 2 of the ATP OneVision is about bringing the family of tennis together. 

Many tennis events in fairness have men and women competing at the same time and in the same place, so there is merit in this merger, and for years there has been serious talk of the ATP and WTA combining, at least their commercial structures and revenues. 

McKinsey indeed has a specific remit to opine on all this, and people say that a deal could value the emerging entity at around $3.8bn. The ATP/WTA narrative is…

Leveraging assets across both Tours via the creation of a new joint commercial entity, delivering more value to players, tournaments, and fans, while remaining as separate Tours.

 

They would say that, wouldn’t they?

The newco JV would be called ‘Tennis Ventures’, and reports say that the ATP would initially receive 75% of the combined revenue earned by both tours, with the WTA taking the remaining money. This is attributed to the significant revenue gap today between the two circuits, with the men’s tour said to currently make four times the WTA’s income.

That’s just not going to go down well with the culture warriors, is it, whether economically fair or not?

The merger would include ATP Media, Tennis Data Innovations (the ATP’s data management subsidiary) and WTA Ventures (where CVC has a stake). Tennis Ventures in this way would manage the entirety of the tours’ media, sponsorship and data rights, but would not have any jurisdiction over scheduling, prize money, or player and tournament relations. This ringfence of a sport’s money is always the preferred structure of private equity, and what they’ve used at football leagues and clubs.

Indeed, in terms of personal agendas, this is a merger that I suspect CVC desperately needs and wants. They have invested 20% in the WTA and that asset alone is going absolutely nowhere under the status quo. They now need a bigger deal, and they have obviously spoken to the ATP, but one sees no evidence of an imminent deal. 

Putting the ATP and WTA together merges two essentially weak and compromised organisations in the hope of circling some wagons for common safety. That won’t work, and the real answer will be found elsewhere. 

 

The Slams know they have the nuts.

Most of this sport’s revenues come from the Slams. The US Open brought in 85% of the USTA revenues last year, and about 70% of tennis fans really only pay attention to the Majors. 

The question Gaudenzi’s OneVision didn’t even pose, far less answer, is this:

“Why bother with all these small ATP tournaments? Do they even have a market, and if they do, why?”

The obvious next question has already been asked by the market:

“Rather than worrying about thinking bottom-up about a future for the ATP and WTA, and all their tournament owners, why not start, top down, with what we know works, the Slams, and ask what else this sport actually needs bolted-on to have a sustainable and florid future?”

No surprise then that what is called the Premium Tour is gaining ground and support. 

It’s an obvious plan to take the four Grand Slams and ten plus ATP/WTA tournaments, to form a product the market clearly prefers. The Grand Slams plus Doha, Indian Wells, Miami, Monte Carlo, Rome, Madrid, Toronto/Montreal, Cincinnati and Beijing, as well as an unspecified grass-surface event. It would feature the top men and women players.

As well as this elite circuit, a secondary development tour would also be formed, featuring male and female players ranked outside of the top 100. And this is hugely important, as the revival in Italian tennis has come from doing this very well. Pathways are the beating heart of any sport.

 

No shit Sherlock.

This is so obvious a solution that it has been around for a while, and even Gaudenzi will agree that it has merit. Less tournaments but higher quality, less stress and fatigue for players, a better product/market fit to commercialise.

LIV Golf for tennis, but done well, and within existing traditional governing bodies. 

Every single sport on the planet is thinking about this, because they have to. The saturated sporting calendar and the athletes can’t absorb any more competiton events. And the “double-your-money for half-the-games” pitch, is very very compelling. Rugby watch this space. 

But, to date, the Premier Tour has never gotten over the line, due frankly to the old chestnut of governing body jealousies, politics, and personal agendas.

 

“It’s not personal, it’s just business.”

Wrong.

It’s always personal, make no mistake. Especially for Alpha males.

To pull this off you would need one body running tennis, but which one would that be? Who gains that power, and which of those seven administrator bodies will agree to sacrifice their current influence and fancy perks? 

This is the whole (New) Ball(s) game, and, as always in sport, turkeys never ever vote for Christmas.

Gaudenzi doesn’t want to give it up, and rails violently against some of the people running the Grand Slams. The cock-fight he publicly had with Craig Tiley, the chief executive of Tennis Australia, tells you all you need to know. Bad blood is everywhere. 

 

Sport is politics.

In fact, the ATP and WTA have taken different stances on the Premier Tour.

Gaudenzi is against giving the Slams more influence, and he doesn’t want to decrease the importance of the tournaments on his tour. They are, after all, the people who currently keep him in power.

On the other hand, WTA chairman, Steve Simon, has been reported to be more open to the concept, given it would, et al, provide his players the prospect of significantly better and equal pay. 

Another reason why the ATP and WTA merger likely won’t work. The WTA’s main agenda appears to be equal pay, but most low-earning ATP players have no interest in that.

 

Broadcasters will look after their own shop. 

Tennis, to be fair, has great TV production values, and a volume of “events” to sell, and that’s so attractive, especially to betting. In fact, the ATP has set up Tennis Data Innovations (TDI) to monetise better their match data used for gambling, and this is one of the reported reasons private equity (CVC) liked tennis in the first place. The volume of events for gambling.

The ATP also has its own DTC channel called Tennis TV, which operates around the outsides of the big broadcast deals. To date, there has not been too much dispute around “exclusivity” but in tough times, these things tend to become a bit more prickly, and we all know that sports media as a business model is not in good shape.

Every broadcaster bidding for rights now needs to make very hard choices about where to spend their ever-deceasing programming budgets. And they will ask more pressingly what Tennis TV is up to.

The main broadcast rights for ATP/WTA tennis today are negotiated and sold by territory, and currently held by the Tennis Channel (Sinclair Group) in the US, ESPN in Latam, and Sky(Comcast) in Europe. BeIN is also a partner. These rights values so far are holding up quite well, but storm clouds gather, as all media companies struggle with cut-the-cord. 

One for example notes ruefully that the historic CEO of the Tennis Channel, Ken Solomon, was recently sacked by Sinclair, and we see that broadcasting now has no time or money for sentiment and passion. Content for them either works or it doesn’t, and maybe you don’t want a guy around who is overly-loyal or attached to an asset he has built. Especially if, as reported in the Wall Street Journal, Sinclair has engaged Moelis ( a Sport Summit Como sponsor) to sell the Tennis Channel.

This whole media rights situation is  “underpriced risk” for the ATP and WTA. Even the eternal optimists must now see the writing on the wall.

Sky/Comcast in Europe, with Glass, clearly sees itself as more of an integration platform going forward. Let others bid to rent IP, and they will just clip a coupon on everything, as a distribution platform. In fact, Glass, as a concept for Sky, is in general under-reported, because if you own HDMI 0, you own the viewer. Then get the search and navigation right and you are the King.

ESPN, another ATP partner, is losing customers, and their strategy for ESPN+, and VENU, is full of volatility. More “underpriced risk”.

Sooner of later all of these people will just lose patience with the long tail of ATP/WTA content, as they are already unhappy when they see private equity getting involved in their sport. Sinclair reportedly doesn’t like the growing CVC influence in tennis one bit.

Maybe that is why they want out?

 

Wall Street and the Hedgies are “active”.

Behind the scenes in tennis, the big and smart fresh capital is fully engaged in the high-stakes battle to lead what they view as a once-in-a-generation opportunity for disruption. These figures include American hedge-fund manager Bill Ackman and the Canadian tycoons Anton Rabie and Rebecca MacDonald. 

Ackman especially, who made his money as a short-seller, is someone you don’t want to be the wrong side of. Luckily for tennis he is a bull on the sport, and potentially a real asset going forward.

This is definitely the time to go long on tennis, 100%. You look at the global popularity of the sport and revenues and it is totally anomalous. Tennis is an oligopoly, and oligopolies are not innovative, and nonprofit ones are even less innovative. – Bill Ackman

Ackman likes tennis as one of the very few global sports, and the only one in which men and women regularly share a tournament. He likes the one billion fans worldwide, split evenly male and female. Ackman loves the revenue quantum, as the sport collects roughly $2.5bn in turnover each year, and he sees massive potential upside on that; (the NFL has a fraction of the number of fans, but $18bn in income). He is also attracted to market inefficiencies he thinks he can fix. Tennis players who receive a mere sliver of the wealth of the sport, compared to athletes elsewhere, is one of these. He smells the potential of the Premier Tour vision as, for him, many small tennis tournaments still have the feel of mid-tier minor league baseball. 

That’s how guys like Ackman always think, and they will just have little time or patience for OneVision. And when these hedgie people believe in a “trade”, they usually go all-in heavy. In this case, by financing the people that matter.

The Players. 

 

The professional tennis player.

We remember that the ATP/WTA started as a player’s organisation, so it should naturally have a keen eye to looking after its players.

But that’s not how it is working out, and players are unhappy.

This article explains it all beautifully. If you’re a big star, in the top 20 or 30, you have a pretty good life. You’ve got sponsors, you can afford to have a good team around you, coaches, physios, hitting partners. When you get below that level, you are in trouble, especially once you fall below the top 60 or so. If you’re outside the top 80 and definitely the top 100, you might not be breaking even, and your income is not guaranteed by multi-year contracts. Players need endorsements and sponsorships, and those brands know exactly the types of player they want. Good-looking and personality-driven mega stars. 

Tennis therefore isn’t paying the base of its professional athletes enough, and that’s never going to be sustainable. It’s the reason all challenger leagues, like in triathlon, swimming, and now athletics, have so much ”market”.  In fact, many of tennis’s professional athletes have just lost confidence in the ATP/WTA, and they want their own Union. They believe that the players as a group do not receive anything close to a fair share of the revenue generated by tennis. At the U.S. Open, for instance, prize money amounted to around 14% of gross revenues.

Seriously? That will always cause a response.

Canadian player Vasek Pospisil, and Novak Djokovic jointly formed the Professional Tennis Players Association (PTPA) as a natural reaction. To negotiate on behalf of the players over money, scheduling and other matters. All helped and financed by Ackman.

Go figure.

 

And here is the core of today’s Column.

In Pospisil’s judgment, the interests of the players have been consistently sacrificed to those of the tournaments, and this is the San Andreas fault at the heart of the ATP. 

But not once is this mentioned in OneVision.

The ATP very simply tries to serve two or three masters, all with different interests. Players, tournament owners, and then there are companies like IMG that have done very well through the status quo.

The sport has grown like a town that didn’t have an urban planner. – Jim Courier

Ps: word on the street is that IMG wants to offload its tennis assets, in its new focus on TKO, as detailed here.

 

 

The Gaudenzi powerbase is the long tail. But that has no commercial value!

Everywhere and every-how you look at this sport, it is a political mess, with its economics way off kilter.

Again the NYT tells the story very well, obviously perfectly briefed by those loose lips.

But there is a new player on court. Maybe not called Lawrence, but certainly from Arabia.

 

Arabian Knights.

From public domain media, Saudi Arabia is interested in tennis. One assumes they see it as a sport that fits well with their own 2030 vision for the country, and the drive for participation in sport by its young population.

In an example here, they forcibly denied that they had made a bid to merge the ATP and WTA..

…but it has confirmed that there is a PIF strategic partnership with the ATP on sponsorship around the ranking points. The Kingdom transparently continues to make investments, here in a very juicy exhibition match to take place in Saudi.

For those that are interested, one can find various articles speculating about ongoing discussions between Saudi and the governing bodies of tennis, and we guess that the truth and its detail will eventually out.

For this Column the point is another. Sport will never change on its own. It just can’t, even if it must. So you need fresh disruptor capital as a catalyst. The Wall Street private equity monies to date haven’t done the job properly, and we can see that clearly at investments by CVC, Clearlake, Silverlake.

Saudi instead brings hope for change, helping various sports “evolve” into more modern structures and governance at a faster pace. It’s that simple, and why Albachiara has publicly always been a keen supporter of sovereign wealth since the Arabian Knights Column a couple of years ago.

 

…

Young George turned to Stanley well pleased with his analysis and conclusions on the challenges facing the ATP/WTA. He had formed a clear view to be submitted to the client.

The Premier Tour is needed, with rights sold globally to someone like Netflix. Bring in a subsided well-funded development pathway program under a merged WTA/ATP. Take more investment from CVC to give them a win on their sunk cost, and ask Ackman into the tent to invest across the board, especially to build out TennisTV and the DTC hub. Look to make any investment from sovereign wealth as easy as possible, and make them your friend. All of this to deliver a business model to finance the top 300 players male and female, on equal pay, under a solid multi-year player union wage agreement like in the big American sports. 

Are you sure that’s what Andrea wants to hear, George?

Stanley asked.

Gaudenzi needs a personal win in all this. He is our client.

George was ahead of his boss already…

Well, he’s our recommendation as the obvious CEO of The Premier Tour right? Ex player, experienced, delivered an Italian tennis renaissance, a strong leader, brave. Brings the whole sport together.

Monique puffed on her cigarette and smirked, as only she can.

Ching Ching.

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