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Tennis may appear to be on a roll, with exciting young players and record ratings. But if it were a company, activist shareholders would have already called for a restructuring.
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This weekend is the climax of the U.S. Open, as Ons Jabeur and Iga Swiatek face off in the women’s final today and Casper Ruud plays Carlos Alcaraz for the men’s title tomorrow.
It is also 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 then there are the power players in attendance like Michelle Obama and Jon Bon Jovi who sat courtside Friday night.
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.
With the Open finals upon us, DealBook spoke with some of the top agents, financiers and insiders to capture the state of play for professional tennis, a business that has always been opaque and uneven. We started by getting a lay of the land from Matthew Futterman, a veteran sports journalist who covers tennis and the business behind it for The New York Times.
What’s going on with tennis as an industry?
It really depends on who you are. 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, it gets a lot more difficult and you start to get worried, especially once you fall below the top 60 or so. “Can I bring in enough money to pay for all of my overhead?” If you’re outside the top 80 and definitely the top 100, you might be breaking even, but there’s a good chance you’re not.
How does that stack up compared with other sports?
It’s kind of a crazy situation given how popular tennis is. In a lot of countries, it’s the second most popular sport, and it has some megastars who are among the most highly paid athletes in the world.
Tennis is roughly a $2 billion business. But the industry can support only 100 or so players. If you’re the 50th- or 60th-best basketball player, you’re probably making $12 million a year at least, assuming you’ve been in the league a few years.
So what’s going on?
There’s a bureaucracy in this sport that doesn’t exist anywhere else. It’s run by seven organizations: the four Grand Slam tournaments; the WTA tour for women; the ATP for men; and the International Tennis Federation, the world governing body, which oversees the Davis Cup and the Olympics and has some involvement with the Slams.
Each of those organizations has its own C.E.O., 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?
What are the chances of disruption like we’ve seen in golf, with a rival league funded by the Saudis?
It’s certainly possible, but it would be more difficult.
You might need a lot of players to say they no longer care about playing the four most important tournaments. Or the top 10 players decide they want to play only each other.
As soon as you stop playing top-level tournaments, your ranking plummets. It affects where you’re seeded, who you play in the first round. It would be possible to have some events, but I don’t know if it’s possible to pick off enough top players every year and create a rival tennis tour.
The industry is still heavily reliant on ticket sales, with the U.S. Open bringing in about 85 percent of the United States Tennis Association’s revenue last year. (Ticket resale prices soared above $9,000 for a seat this year.) The sport brings in only 1.3 percent of total global media sports rights, even though the value of televised sports is booming, according to a report compiled by the Association of Tennis Professionals.
“The players are doing their part, but the sport itself is not helping,” said Stuart Duguid, who started the management company Evolve with the Japanese tennis star Naomi Osaka, his longtime client. “It hasn’t really innovated as much as it needs to do to keep that next generation engaged.”
Critics say some tennis quirks turn off the younger generation — take the U.S. Open’s irregular starting times, or five-set men’s matches that can stretch into early morning.
“It’s hard to pinpoint whether we’re actually growing the sport in terms of adding new fans,” Mr. Duguid said. “And I think that the fan base has to get younger — and I think we need to come up with better ways of sharing the content.” (He says he hopes a docuseries that Netflix is working on to track tennis stars will amp up interest; his client Nick Kyrgios is featured in the series.)
Others pushing for change include Mr. Ackman, the billionaire investor, who has thrown his support behind the Professional Tennis Players Association, which would negotiate on behalf of the players over money, scheduling and other matters.
“Why should players be required to play until 3am, let alone in an individual sport?” Mr. Ackman wrote on Twitter on Thursday after the U.S. Open match between Mr. Alcaraz and Jannik Sinner lasted more than five hours. “Imagine if boxers had 5-hour bouts, and then get one day off before they must box again. This is why we need the @ptpaplayers.” (Our Andrew Ross Sorkin interviewed Mr. Ackman on CNBC this week.)
Like other sports, such as basketball’s W.N.B.A., the women’s tennis tour has faced its own financial challenges. Despite equality in the major championships, equal pay is still a struggle. The WTA suspended tournaments in China after the disappearance of the Chinese tennis star Peng Shuai. It is reportedly in talks for an investment from the private equity firm CVC Capital Partners, its first outside capital.
“Raising a lot of money in order to give equal prize money is to be applauded, but it also needs to be sustained,” Mr. Duguid said. “There needs to be further investment in growing the game. There needs to be further investment in promoting these young stars.”
Unlike players in other major sports like basketball and baseball, tennis players do not have multiyear contracts, and pay isn’t guaranteed. (A study by the I.T.F., the governing body, found that 14,000 players who participated in pro tournaments around the world in 2013 made less than $1 doing so.) A tennis player’s payday comes from sponsorships and endorsement deals. Roger Federer, who is recovering from an injury and hasn’t played competitively in over a year, is still the highest-paid tennis player in 2022, according to Forbes, bringing in $90 million off the court. In second place is Ms. Osaka, with $55 million in off-court income. (Mr. Federer has endorsement deals with Uniqlo, Credit Suisse and Rolex, and Ms. Osaka has deals with the likes of Sweet Green, Louis Vuitton and Nike.)
With so many branding opportunities, Tony Godsick, the longtime agent for Mr. Federer, said he had seen players accept whatever deal was placed in front of them, because “you never know if you’re going to be back in the winner circle again.”
“But if you chase every dollar and you chase every opportunity, you’ll have a short career that probably won’t turn out to be as good and successful as you would like,” he said.
Mr. Godsick, who spent 20 years at IMG before leaving in 2012 to start the boutique agency Team8 with Mr. Federer, believes the days of big agencies representing marquee players are coming to an end, pointing to Ms. Osaka and Rafael Nadal as other tennis stars who have their own agencies.
“People are looking for equity deals, and people are looking to do deals that are unique, and maybe they’re one of one as opposed to one of many,” he said. At the largest agencies, he said, “it’s just constant transactional goals.”
“If tennis was a stock, I’d go long on it.”
Adam Pasick contributed to today’s DealBook.
What do you think? How can tennis fix itself? Let us know:


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