How distribution could work A different kind of labor leader UFC plans new digital net The Sit-Down: Dave Brandon Coors Light passes Bud for the lead In MLB's licensing spotlight Fox will sell for L.A. Coliseum ATP adding Michelob Ultra to U.S. nets Powdr buys ‘World of Adventure Sports’ From the Executive Editor
SBJ/20080825/SBJ In-DepthPrint All
Rafael Nadal’s thrilling victory at Wimbledon positioned the tennis great for expanded marketing opportunities. As Nadal’s agent, Carlos Costa has been working to make those deals happen. He recently responded through e-mail to questions from staff writer Daniel Kaplan.
What are the marketing plans post Wimbledon? Have any new opportunities emerged?
Costa: At IMG we were taking Rafa’s marketing very seriously already for some years. We formed a team that included me, the whole of IMG and hired the services of Benito Perez-Barbadillo, a former ATP director of communications, for media and PR purposes. I work very closely with Benito and we position Rafa on a global basis, with special care and attention to media. Rafa also gets very much involved in the decision-making process and I can proudly say that we are selling a true product, something original, the way Rafa is. The Wimbledon win has boosted positively his image and our strategy remains the same. It is true that after Wimbledon new opportunities have arisen with more interest on Rafa, especially in the U.S. market. Also with the No. 1 ranking the interest has increased, but Rafa was very popular in the last two years as well.
What is the view of the American market? Does Nadal want to become better known here?
Costa: The American market is always important. Rafa’s interest for it is big and we have always worked on that direction, especially with IMG being an American company. We feel he is very well known, especially after the Wimbledon final. We also know his English has to improve if we want to reach mainstream media in the U.S. and get [him] to [a] higher level of popularity. For that purpose, Benito handles all the media opportunities that we normally discuss together. Rafa does these not because he wants to be better known, since that’s not important to him. More important is to give back to the sport, to tennis, and be THE ambassador of the sport.
How would you describe the Nadal brand?
Costa: A good investment in all senses. He behaves in a very professional way and feels that his sponsors are his partners. But the best way to describe it is real. Rafa is always himself, the way he is, and his sponsors know what he is and what he portrays. He is a young, fresh, entertaining character who has passion for the sport. Someone who reaches all segments of the market. Kids love him especially but he also reaches that “lost segment” in tennis between 40 and 50 that still talks about past players and is not that much interested lately in the sport.
What are his current deals and can you say how much he earns off court?
Costa: We never talk about his off-court earnings. He has seven sponsors that are Nike (shoe), Babolat (racket), Banesto (bank), Time Force (watch), L’Oreal (shampoo), Kia (car) and Puig (perfume).
Finally, he has been outspoken on his views on ATP politics, and is now on the player council. What role does he see himself taking in terms of the future of the ATP?
Costa: Him together with Roger Federer and Novak Djokovic are on the player council and are taking very seriously issues concerning the sport. He wanted to be involved, informed and be part of the decision-making process of the ATP. He feels the top management is not doing the job properly and wanted to be part of that. His main task is clearly to play tennis and win, but the way the decisions are taken, and especially which decisions are taken that affect players directly, he wants to be involved. Hopefully with a new management soon things will be better and easier.
Professional tennis has its share of blogs that cater to people wanting to learn more about events and players, and to network with fellow tennis aficionados. Sports Media Challenge used its Buzz Manager service to identify a few key blogs worth a bookmark.
The U.S. Open Tennis Championships is the top stand-alone annual sporting event in the world. It expects to draw more than 700,000 fans and rake in about $200 million in revenue and more than $100 million in profit. The grounds of the 46.5-acre USTA Billie Jean King National Tennis Center in New York boast two stadium courts, 20 side courts and a soon-to-be-completed $60 million indoor training center, which will also house a new hospitality complex.
Operating the tournament is a major endeavor, with 10,600 people staffing the event. The Open may be the only event that has its own Federal Aviation Administration deal to divert airplanes (the first call the tournament referee makes before play each day is to the control tower at LaGuardia Airport, and the last to the same tower). It also has its own on-site meteorologist.
The following is a look at some of the behind-the-scenes challenges the event confronts.
Description: The Open has worked hard to be more than just a tennis event. Indeed, despite there being few top Americans in tennis, the spectacle continues to be a major draw. Some say it has a Disneyland appeal. There are more than 100 types of plants, including three kinds of chili peppers. Three upscale restaurants, a wide-ranging food court and a Heineken bar keep fans fed, and the Polo, Wilson and Lacoste stores are usually packed. Fountain displays, a hall of fame area, an interactive zone (open next year), and musical bands are part of the fun.
What’s new: Part of the new $60 million, 245,000-square-foot U.S. Tennis Association training center will be open, including a spacious membership office; clearer wayfinding signs have been added through Infinite Scale Design; green initiatives; a new wine bar.
Our request: Hard to find fault, but what about an Internet cafe, business center or meeting rooms?
Fun fact: Legend has it that the idea of moving the Open from its ancient home in Forest Hill, Queens, to the current site in Flushing came when USTA President “Slew” Hester noticed the property while landing on a flight into LaGuardia in January 1977. The center, the largest public tennis facility in the world, opened 20 months later.
Description: 240 singles players, 240 doubles players, not to mention girls and boys junior singles and doubles tournaments, and that’s a lot of egos, nationalities and languages. The tournament spiffed up the locker rooms last year in an $8 million renovation, added a new workout room, and, in a nice touch, put the name of past champions on their lockers. Players can request their own music when they go on court, and the tournament downloads it from iTunes. If a player requests a song with offensive lyrics, a clean version is played.
What’s new: The entire scheduling system is finally going digital. Until this tournament, the figurative man-behind-the curtain followed the action by using magnets and moving them ahead through the brackets, and at the end of the day figured out the next day’s schedule, which players and media eagerly awaited. While it sounds simple, with only five courts available to TV, scheduling courts with foreign media in mind is a complicated process. This year, the control room has 16 large computer screens managing the action.
Our request: The players already got the media kicked out of the locker rooms last year, so if we were a player, we’d say more prize money.
Fun fact: In 2002, Pete Sampras complained to tournament director Jim Curley about being scheduled first on semifinals day before Andre Agassi, ranting that the last time he played so early he was a junior. The extra rest is largely credited with giving him an edge the next day over Agassi in Sampras’ final match.
Description: In addition to 90 luxury suites in the main stadium, the U.S. Open has a $5 million corporate hospitality business that will entertain 140 companies this fortnight, with 80-100 staff members. For the third and final year, the current tent complex is located outside the grounds, a short walk from the southern entrance. Next year, hospitality will be moved to the new training and entertainment building.
What’s new: The hospitality center is stepping up the foliage with 3,000 plants this year.
Our request: The temporary hospitality village has proved so popular, the USTA looked at staying put instead of moving into the new training center building. Maybe it should do both.
Fun fact: The number of companies using Open hospitality has tripled in recent years.
Description: Transporting players and VIPs between Manhattan and the site is a major undertaking (most of the USTA employees stay at the nearby Crowne Plaza). The 150 cars, provided by tournament sponsor Lexus, travel an estimated 94,468 miles during the event. That’s not to mention the 64,378 miles the buses for media and other credentialed holders the USTA estimates will cover. As for the average fan, 57 percent arrive via mass transit.
What’s new: More than 60 percent of the cars are hybrids this year.
Our request: How about arranging with the city for a U.S. Open express subway to run once an hour, the way Long Island Railroad does?
Fun fact: Each year, tournament referee Brian Earley is on the phone four or five times talking to cars stuck in the midtown tunnel with players late getting to the grounds.
Description: The U.S. Open will sell about $12 million in merchandise this year through its own branded apparel and third-party vendors like Nike, Polo and Lacoste (the Open’s net is about half). New this year is Under Armour. The merchandise business is handled by Facility Merchandising Inc. Its CEO, Milt Arenson, is there each day of the tournament, including tallying up the receipts deep below Louis Armstrong Stadium, usually at 5 a.m. He then lets USTA merchandise chief Sarah Cummins know what needs to be restocked.
What’s new: With the U.S. Open carrying 850 products with its own brand — aside from, say, the Polo and Lacoste products — it’s always hard to figure out what the hot item will be. Our bet is on the baseball cap made from two Coke bottles, part of the USTA green initiative.
Our request: How about a tennis version of the dollar store, say the $10 store: Nothing costs more than $10. And for good measure, put it up by the cheap seats in Arthur Ashe Stadium.
Fun fact: Almost every year, electricity problems knock out one vendor’s cash register, leading to much counting of handwritten receipts.
Description: With more than 1,300 credentialed media, the Open is a major global happening. There is no main broadcast center; instead, television production and feeds run through trailers or modules parked outside between the stadiums and next to a railroad track. This area is city land that can only be used during the tournament.
What’s new: The modules are essentially upscale TV trailers. A small cafeteria is now alongside them, and next year, on the USTA side of the road, several trailers will be stacked and kept there year round in an effort to accommodate new partner ESPN, which begins coverage in 2009.
Our request: The main media room, where hundreds work, has one men’s and one women’s rest room. Enough said.
Fun fact: The USTA’s advanced media unit during the two weeks is housed beneath the stands of 44-year-old Louis Armstrong Stadium, which is the second show court. Because of a history of flooding, the floor is made of thick wood squares and there is no carpet. Beer dripping in from the stands continues to be a problem. On the plus side, the space, which will be crammed with 60 to 70 staffers, may have the coolest temperature on the often hot and humid grounds.
Description: You can’t talk U.S. Open without gabbing about the food, considered among the most upscale in sports. There are more than 60 concessions and the Open expects $18 million in sales. Concessionaire Levy Restaurants anticipates selling 230,000 hamburgers, 4.5 tons of crab and lobster, and 26,000 pounds of beef tenderloin and steaks. With three exclusive restaurants, one of which is open to general ticket holders, take your appetite and your wallet (yes, American Express is the official card of the Open).
What’s new: The biggest change is what fans won’t see, or taste, as the case may be. The national training center, with its 15,000-square-foot food commissary, is now attached to the main row of restaurants in the food court. Previously, refrigeration was limited to concessions just for beer, and now it should handle most needs. This should improve stocking and freshness.
Our request: Limited vegetarian and organic food offerings. With New York City full of these kinds of trendy restaurants, the USTA should find one to set up shop for the two weeks.
Fun fact: Ben and Jerry’s expects to sell $1 million in ice cream and shakes on-site this year, up from $850,000 last year.
Description: The Open boasts 22 sponsors and each year they seem to promote more than ever at retail and on-site. The years of companies sponsoring the Open because the CEO liked tennis are over, said Pierce O’Neil, the USTA chief business officer. JPMorgan Chase, perhaps the top sponsor, gave away 16,000 tickets in New York this summer as part of a promotion. American Express on-site will hand out free TVs and radios featuring the tennis action. Evian will boast more than 80 large Evian bottle recycling bins around the grounds (all recycling sorting had been done by trash collectors previously).
What’s new: New sponsor Juvéderm has a booth on-site for anyone desperate to hear about getting rid of their wrinkles.
Our request: It’s not a sponsor issue, but the full name of the site is the USTA Billie Jean King National Tennis Center. Spelling out USTA, that’s 63 letters, and tennis is used twice. Something should give.
Fun fact: U.S. Open sponsor contracts are written so that companies with courtside signage have their lettering within 24 inches of the exterior doubles line. One year a CEO sitting courtside insisted his company’s sign was farther. The Open measured it and the USTA was right.
Description: When the USTA in 1999 hired former Radio City chief Arlen Kantarian to run pro tennis, it was not hard to figure out that music would be part of his plan. Now the USTA has an opening night ceremony — The Jersey Boys will sing tonight and the host is Forest Whitaker — and a finals act. Staff led by Kantarian, managing director Michelle Wilson, and general manager of entertainment Michael Fiur make the choices. Celebrity fans are booked through Flying Television, and between 100 and 200 are expected this fortnight (70 percent come unsolicited).
What’s new: One of the entertainment acts on the grounds during finals weekend will be teams of rope jumpers. Wilson concedes it is not the most obvious fit for the Open’s 35-and-above demographic, but says people love watching young people having fun.
Our request: The smaller music acts on the grounds can bother the players competing, who are the core product. Perhaps more nonmusical entertainment, like comedians, author Q&As, acrobats?
Fun fact: The nine video boards on the grounds have their own production team and TV trailer.
— Compiled by Daniel Kaplan
Do tennis players need a union?
Even as this fortnight’s U.S. Open Tennis Championships are set to award over $20 million, one of professional sports’ top purses, tennis pays perhaps the smallest percentage of revenue to its players of any major sport.
While team sports pay generally between 50 percent and 60 percent of revenue to players, the comparable figures on the men’s and women’s tennis tours are around half that range, and for the four Grand Slams, significantly less.
In fact, Jeffrey Kessler, the influential outside counsel to the NFL Players Association, and his colleague David Feher have been quietly consulting Sony Ericsson WTA Tour players for more than a year on their pay. While they did not advise the women players to form a union, the attorneys have been acting as unionlike advisers in the negotiations over a new WTA prize money system that may be approved as soon as this week.
“Is it fair that these players in nonteam sports get a lower percentage of revenues than other sports?” Kessler asked. “No. It is not fair at all.”
The Open, which commences today and like the other three tennis Grand Slams is not an ATP or WTA event, generates around $200 million in revenue. That means the players receive as little as 10 percent. The other Slams’ percents are thought to be somewhat, but not much, higher.
The WTA, which this year will award $35 million, half of the men’s tour total purse, is believed to pay its players around 30 percent of revenue, a sum that will rise beginning next year. On the men’s circuit of 63 global events, the ATP World Tour, players earn as little as 25 percent of revenue, a figure that will also rise in the future, the group said.
“Men’s professional tennis players get less of the annual revenue than any professional athletes in the world,” Rob MacGill, counsel for the Hamburg, Germany, tournament, alleged last month during the event’s unsuccessful antitrust trial against the ATP.
MacGill cited in court an internal ATP study that placed the players’ take at 22 percent. Iggy Jovanovic, a former ATP board director, confirmed this finding while testifying. An ATP spokesman later called the 22 percent an old figure, and said the current range is between 25 percent and 40 percent, depending on the tournament. The disparity between the number cited by MacGill, and the ATP’s higher range, is likely whether appearance fees are included, as well as prize money increases the last two years. All but the top nine ATP stops can pay players appearance fees that often run into the six figures, and in rare cases, seven figures.
MacGill contended during the trial, in which the soon-to-be demoted Hamburg tourney tried to overturn the ATP’s new 2009 format, that the circuit artificially depressed the earnings of players by forcing them to compete in certain events. Those tournaments do not need to compete for players, he argued, through lures such as higher prize money.
While the jury rejected the argument, even one of the ATP’s outside counsels, Proskauer Rose’s Colin Underwood, said during the trial that players, and not a tournament, would have been better positioned to argue unfair treatment.
U.S. District Court Judge Gregory Sleet, who presided over the case, added during a side discussion with counsel, according to a transcript, “So maybe it’s Mr. [Roger] Federer and Mr. [Rafael] Nadal that needs to be the plaintiffs here.”
To do that, of course, players would need their own group or a union.
Male players and tournaments had separate associations before the ATP formed in 1990. Now they run the circuit collectively, with equal representation on the board of directors. Unique outside of tennis, the structure of labor and management managing a sport from the same side of the table has led to conflicts. A breakaway players’ group fizzled six years ago. (In fact, one of the lawyers leading that effort, Rob Freeman, now works for Proskauer Rose.)
This year the top three players, in an unprecedented development, were elected to the players advisory council; the three player representatives on the board of directors were voted off by the council over their alleged failure to communicate change; and several stars, including No. 1-ranked Nadal, are critical of the ATP.
“[Nadal] feels the top management is not doing the job properly,” the Spaniard’s agent, IMG’s Carlos Costa, wrote in an e-mail. “Hopefully with a new management soon things will be better and easier.”
The ATP has not disclosed plans to replace the current management. Executive Chairman Etienne de Villiers’ contract expires in December, and the top 20 players in March signed a petition demanding a role in finding his successor or renewing his contract.
The players’ beef appears to be more about process and where they play than about pay. The ATP, which will award $70 million this year, plans to increase prize money by $107 million over the next 10 years, according to trial testimony of ATP executives.
Mark Miles, who ran the ATP from its inception though the middle of 2005, said that during his tenure the percent of player pay, including appearance fees, reached 50 percent. After departing, he said he learned the figure had declined significantly, reflecting the improved financial fortunes of many events that did not increase prize money. ATP executives testified during the trial that 73 percent of their events are profitable, but between 2000 and 2006 there were no pay increases.
Now, the ATP and the WTA are publicly committing to revenue sharing, a team sports staple. The WTA this week may sign a five-year revenue-sharing agreement, said Lisa Grattan, a WTA player board representative. While the top four WTA events would not be part of the system because their prize money is pegged to a twin men’s event, the next two tiers of WTA tournaments would commit to base prize money levels, and then share revenue based on certain parameters, Grattan said. The tournaments wanted expenses deducted from revenue, she said, but the players successfully resisted.
While the WTA seems headed for a happy short-term solution, the question remains whether players need to organize more effectively to push the Slams and other tournaments for more pay.
Whether tennis players could even legally form a union is a question. Conventional legal thinking is to start a union, future members need an employer to collectively bargain against. In tennis, the players are independent contractors, and not employees of either the ATP, WTA or the tournaments.
Mark Levinstein, a partner with Williams & Connolly who advised the short-lived ATP splinter group, said that because of the ATP’s oversight of the players, a tennis union might legally pass muster.
The ATP, he explained, tells players to compete in certain events, requires promotional appearances, restricts what they wear on court, and controls their off-court earnings through rankings, he said. Endorsement contracts often are based on rankings. While Levinstein did not mention the WTA, the women’s tour exerts similar oversight.
Because of the wide range of nationalities and languages among the players, not to mention the influence of agents, Levinstein said, organizing would be a Herculean task.
Kessler, the NFLPA outside counsel advising the WTA board of director player representatives, said another issue is culturally the tennis tours were started by players, and many of the tournament owners are former players. The PGA Tour, he continued, is riper for organizing because there the players are not represented on the board of directors, unlike the WTA’s and ATP’s.
Including pension benefits, the PGA Tour awards roughly 50 percent of its revenue to players, according to the group’s tax return. Calculating how much of the revenue of golf’s Slams goes to players is difficult because other than the Masters, the events move between courses, changing, sometimes dramatically, each contest’s revenue total. However, like in tennis, these Slams award far less as a percent of revenue than Tour events, arguing like their tennis peers that much of their proceeds are required to expand the game.
Shortly before he resigned from the ATP, Miles, responding in part to unease with stalled prize money levels, demanded another $50 million from the Slams. The top four events in tennis, far and away the economic and political force in the sport, brushed aside the request.