Sports

Inside the Battle to Control, and Fix, Tennis

MELBOURNE, Australia — Walking the grounds of Melbourne Park, where the Australian Open is in full swing, one could easily believe that all is well and peaceful in professional tennis.

Stadiums are packed. Champagne flows. Players are competing for more than $53 million in prize money at a major tournament the Swiss star Roger Federer nicknamed “the happy Slam.”

Behind the scenes though, over the past 18 months a coterie of billionaires, deep-pocketed companies and star players have engaged in a high-stakes battle to lead what they view as a once-in-a-generation opportunity for disruption in a sport long known for its dysfunctional management and disparate power structure.

The figures include Bill Ackman, the billionaire hedge fund manager and hard-core tennis hobbyist who built a tennis court atop his office tower in Midtown Manhattan. Ackman is funding a fledgling players’ organization led by the Serbian star Novak Djokovic. The group is searching for ways to grow the sport’s financial pie and the size of the players’ slice. In their ideal world, one day there might even be a major player-run event akin to a fifth Grand Slam tournament.

Earlier this month, the group announced its core tenets, which include protecting player rights, securing fair compensation and improving work conditions. Players have about had it with matches that start close to midnight, end near dawn and put them at risk of injury, like Andy Murray’s second-round win in Melbourne that ended after 4 a.m. Friday. The group also announced its first eight-player executive committee, which includes some of the top young men and women in the game.

There is also CVC Capital Partners, the Luxembourg-based private equity firm that has been working for months to close a $150 million equity investment in the WTA Tour that it views as a first step to becoming a prime player in tennis.

Then there is Sinclair Broadcast Group, the American media conglomerate that owns the Tennis Channel, which wants to expand globally and has been trying to entice the people who run tennis to embrace that effort.

All of them see tennis as uniquely positioned for growth, as a new generation of stars tries to take up the mantle of the last one, a story Netflix highlights in the new documentary series “Break Point.”

“This is definitely the time to go long on tennis, 100 percent,” said Ackman, the noted short-seller best known for betting on a plunging real estate market ahead of the Great Recession. “You look at the global popularity of the sport and revenues and it is totally anomalous.”

Through his philanthropic fund, the investor Bill Ackman is essentially bankrolling Novak Djokovic’s Professional Tennis Players Association, a new players’ union, and a player-controlled, for-profit entity.Credit…Elsa/Getty Images

Ackman has largely given up his noisy activist approach to investing, but tennis, he and others point out, is one of the few global sports and the only one in which men and women regularly share a tournament. That has helped it attract roughly one billion fans worldwide, with nearly equal numbers of male and female devotees.

The 2023 Australian Open

The year’s first Grand Slam tennis tournament runs from Jan. 16 to Jan. 29 in Melbourne.

  • Taylor Townsend: A decade ago, she had to contend with the body-shaming of tennis leaders in the United States. Now, she’s determined to play the best tennis of her career.
  • Caroline Garcia: The top player has spoken openly about her struggles with an eating disorder. At the Australian Open she is chasing her first Grand Slam singles title.
  • Talent From China: Shang Juncheng, once the world’s top-ranked junior, is the youngest member of a promising new wave of players that also includes Wu Yibing and Zhang Zhizhen.
  • Ben Shelton Goes Global: The 20-year-old American is ranked in the top 100 after a late-season surge last year. Now, he is embarking on his first full season on tour.

Tennis executives estimate the sport collects roughly $2.5 billion in total revenues each year. However, it collects far less revenue per fan than other sports. The N.F.L. has a fraction of the number of fans but some $18 billion in revenues. Tennis players also receive a much smaller percentage of those revenues than athletes in other sports receive, and they have to pay for their coaches, training and much of their travel. Aside from a handful of premium events like Grand Slams and some of the Masters 1000 competitions, many tennis tournaments still have the feel of mid-tier minor league baseball.

The cash crunch has been especially acute for the WTA Tour ever since it suspended its operations in China in December= 2021, retaliating against a government that had seemingly silenced a Chinese player after she accused a former top government official of sexually assaulting her. The move, led by the tour chief executive Steve Simon represented a rare moment when a major organization prioritized morals and human rights over the bottom line.

China, the host country for nine tournaments, including the annual season-ending WTA Finals, had committed hundreds of millions of dollars to women’s tennis for a decade. The WTA has been hunting for new cash ever since the suspension, and with good reason. Some weeks, the disparity with the men’s tour is startling — in Auckland, New Zealand, this month, men competed for more than $700,000 in prize money while the women’s purse was $260,000.

The jockeying for power has played out against the backdrop of significant infighting within men’s professional golf prompted by the debut of LIV Golf, the Saudi-backed effort to create a rival to the PGA Tour that has fractured the sport and caused some of its biggest stars to disappear from all events but the four major tournaments.

The established cast of power players who run tennis — including Simon, his counterparts on the men’s pro tour, the four Grand Slams and the International Tennis Federation — have watched that unfold and worked to secure their primacy, even as they acknowledge that tennis has to change with the times.

“The status quo is not an option,” said Stacey Allaster, the tournament director of the U.S. Open.

Allaster, who has previously run everything from second-tier tournaments to the WTA Tour, described tennis as an “insular” sport that does not focus enough on what its fans want.

“What is the road map for trial and experimenting?” Allaster asked.

From left, Iga Swiatek, Stacey Allaster and Ons Jabeur after Swiatek beat Jabeur in the 2022 U.S. Open final. Allaster, the tournament’s director, said tennis has not focused enough on what fans want.Credit…Elsa/Getty Images

Andrea Gaudenzi, the former player who is the chairman of the men’s tour, the ATP, said all the interest from private investors signaled that the sport was headed in the right direction.

At a private players meeting last week in Melbourne, Gaudenzi heralded the ATP’s move to raise prize money by 21 percent, to a record $217.9 million this year. Unfortunately for the players, the ATP represents only about a quarter of the sport’s revenues. The Grand Slams collect most of the rest of the sport’s revenues, with the players’ cut at those events generally far less.

Gaudenzi said his organization has had its own discussions with CVC executives but no deals are imminent.

“Sometimes you need a catalyst event and someone helping you, and guiding you,,” he said.

That fallout from that catalyst event — the WTA’s withdrawal from China — is ongoing.

The government of China’s leader, Xi Jinping, has given no indication that it will pursue a credible and transparent inquiry into the allegations from the player, Peng Shuai, which were made in November 2021 on her Chinese social media account.

In November 2022, Simon called the pending deal with CVC “a very complex business decision and business move we need to work through.”

CVC, which wanted to close the deal by the end of last year, has said little publicly about it. People familiar with the deal who were not authorized to discuss confidential financial information said it includes a $150 million payment for a 20 percent ownership stake in the WTA Tour.

As CVC and the WTA closed in on the deal during the fall, executives with Sinclair, which acquired the Tennis Channel in 2016, expressed their growing concern that after building an international network and being one of the highest-paying partners in the sport, CVC might try to elbow out the company if it reaches a similar agreement with the ATP, some of the people said.

In the short term, the women’s tour is expected to use a significant portion of the money from CVC to increase prize money for players, ensuring that men and women receive equal prize money at all the tour events they play together. That, however, will do little to produce a return for CVC, which is in this to make money.

To do that during the next decade, people familiar with CVC’s thinking said, company executives want to increase collaboration with the men’s tour and hold more combined events. Then they could consolidate assets, such as media rights and sponsorships, and sell them together in hopes a combined product would fetch a significantly higher price than what each tour collects separately. That could help CVC gain a foothold within the ATP and flex its muscle.

Those plans jibe with some of Gaudenzi’s priorities for the ATP, which include holding as many as nine combined events with the women’s tour, because those are the most popular with fans, creating with the Grand slams close to 200 days of the most desirable competition.

The executive committee for the Professional Tennis Players Association includes Djokovic, Jabeur, the rising Spanish player Paula Badosa and Hubert Hurkacz.Credit…Alana Holmberg for The New York Times

The vision may break down, however, when the tours try to figure out how to divide revenue. Men know their tour is more profitable and have long resisted equal partnerships with the women’s tour.

Gaudenzi said more men, especially the younger generation, understand the importance of equality and are much more open to the concept of joining forces with the women than they were when he played in the 1990s.

“They understand the value, you just have to show them the business case,” he said.

He added: “We are in the entertainment business, so we have to entertain people, not ourselves.”

Also, the plan de-emphasizes smaller tournaments, where players can collect appearance fees. A few of those are the most successful and popular events on the tour, such as the Estoril Open on the Portuguese Riviera, where players love the packed stadiums, seaside setting and full embrace of some of the region’s wealthiest companies, as well as the country’s president, Marcelo Rebelo de Sousa.

Ackman said much of the maneuvering he has seen represents old-world thinking. That is partly why he aligned with the players, who have the most incentive to push for change. They stars of the show but receive roughly 15 to 25 percent of the revenues — about half of what athletes in other sports receive.

“Tennis is an oligopoly, and oligopolies are not innovative, and nonprofit ones are even less innovative,” Ackman said.

Through his philanthropic fund, Ackman is helping to bankroll Djokovic’s Professional Tennis Players Association, a new players’ union, and the Winners Alliance, a player-controlled, for-profit entity, though he said he has no designs on profiting from tennis.

Ackman made it clear that the P.T.P.A. was not seeking to launch a new tour, though in theory having an event like men’s golf’s annual Players Championship — considered a fifth major in some circles because of its top field and rich purse — would be appealing. He and the P.T.P.A. recently hired Ahmad Nassar, who for years ran the N.F.L. Players Association’s for-profit company, Players Inc.

Nassar hopes to convince players and their agents to sign over their group licensing rights, which the Winners Alliance could in turn sell — to a video game company, a luxury hotel chain that could offer both payments and discount deals, or any number of potential corporate investors.

Ahmad Nassar, hired as the executive director of the Professional Tennis Players Association, formerly ran the N.F.L. players’ union’s for-profit company.Credit…Alana Holmberg for The New York Times

The P.T.P.A. spent much of the past six months recruiting its executive committee. The group now includes Paula Badosa, the rising Spanish player, and Ons Jabeur of Tunisia, the No. 2 women’s singles player and 2022 Wimbledon finalist who is the sport’s first major star from a Muslim country. Jabeur made it clear the organization doesn’t want any part of a golf-style dispute.

“We don’t want to fight with everyone,” Jabeur said last Saturday, while expressing her determination to help the players get their due. “We just want to make our sport great. ”

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