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Volume 21 No. 2

Events and Attractions

The ATP’s landmark deal with Tennis Australia to dramatically increase prize money by 2016 for the Australian Open could place significant pressure on the other three Grand Slams, especially the U.S. Open, to change their approach to the financial standoff with the sport’s male players.

By 2016, the Australian Open will be paying about $41 million in prize money.
That at least is the hope within men’s tennis, according to several sources. “The ATP is trying to make a seismic change in the way the Slams pay the players,” said one source.

The ATP, under new CEO Brad Drewett, has spent most of the year asking for a major increase in compensation that would start to reflect the percentage of revenue paid to athletes seen in other sports — which in U.S. team sports can be more than 40 percent — and at the ATP’s own events. Drewett, a former player and who is Australian, declined comment.

Last month, reports emerged that players would consider attending an alternate event to the Australian Open because of the issue, a not-so-subtle boycott threat. Tennis sources said there were, in fact, discussions with other cities, many in the Middle East and Asia, about staging an unofficial Slam. Now, under the recently announced deal in Australia, the Australian Open by 2016 will be paying about $41 million in prize money, which a key source said is about 24 percent of revenue, a sharp rise from the mid-teens percentage level of just a few years ago.

The Australian Open had already been paying more as a percentage than the other three Slams, so now the bar is ever higher.

At the U.S. Open, which internal ATP figures show as having $250 million in revenue, its $25 million prize money payout right now is 10 percent (half to men and half to women), the lowest among the four Slams. An Open with no revenue growth by 2016 would have to increase prize money 140 percent over the next four years, or $8.75 million a year, to reach that 24 percent threshold. Of course, revenue is likely to grow, so the gains in prize money would have to go up even further to meet that percentage then.

The U.S. Tennis Association, which owns the Open, declined to comment. In the past, the USTA has strenuously opposed sharp increases, arguing that doing so would de-fund grassroots program and perhaps even the plans to renovate the National Tennis Center.

The next critical moment appears to be the players’ meeting next week at the ATP’s Paris tournament. That is where they should learn more about the other three Slams’ responses, said ATP Player Council member Sergiy Stakhovsky, writing on Twitter last week when contacted by SportsBusiness Journal.

Stakhovsky has been outspoken on the matter and has particularly been vocal about WTA players appearing to get a free ride. The four Slams are committed to equal prize money, so whatever increase the men receive, so do the women. The WTA, in a statement, said, “Tennis Australia has shown great leadership with their significant, long-term commitment to increased fair and equal prize money compensation for the athletes of our sport.”

Representatives for Wimbledon and the French Open did not reply to queries seeking comment.

Circuit of the Americas, Texas’ newest speedway, has signed 10 inaugural partners ahead of its first Formula One race next month.

The facility has signed a mix of single- and multiyear deals with AT&T, Anheuser-Busch, Mobil 1, Pepsi, Frito-Lay, Topo Chico, Red Bull, Best Buy, Pirelli and Texas Lottery. The deals range in value from the low six figures to the low seven figures.

Circuit of the Americas chief marketer Geoff Moore said that the organization never set a numerical goal for the number of sponsors it wanted in its first year but is pleased with the quality of sponsors the facility signed.

“When you have a new venue like ours, you’re very interested in people that are interested in being not just a sponsor but a marketing partner,” Moore said. “How are they going to activate in the local, regional and national marketplace? The eagerness of people on this list [of sponsors] to do that is something we’ve been happy with.”

Inaugural partners receive a rights package that includes use of the Circuit of the Americas logo, hospitality, tickets, signage during MotoGP and V8 Supercars events, and integration into a fan festival in downtown Austin, Texas, during the F1 race weekend. In accordance with the track’s agreement with Formula One Management, the sponsors won’t get in-venue signage that’s camera visible during the Nov. 18 F1 race, the U.S. Grand Prix. That means that sponsors won’t be visible to F1’s global audience of more than 500 million viewers per race.

But the Circuit of the Americas sales team worked around that limitation by creating the fan festival, a local event where sponsors can activate and have visible signage. The event will feature more than 35 concerts in Austin during F1 race weekend. Mobil 1 signed on as the presenting sponsor of the festival, Bud Light signed on to sponsor the marquee live stage, and others will activate in the area.

“F1 is a very tightly controlled commercial property,” Moore said. “When you’re trying to introduce the sport to people who haven’t been a part of it, that is something that you have to explain.”

Moore said that Circuit of the Americas also serves as an agency for Allsport Management, F1’s trackside sales agent. He added that there are sponsorships with Allsport and F1 that will be announced at a later date.

Pirelli is the only inaugural sponsor of Circuit of the Americas that also sponsors F1. The tire manufacturer is the sport’s official supplier.

Pirelli is the only inaugural sponsor of Circuit of the Americas that also sponsors Formula One.
Tom Gravalos, Pirelli’s vice president of marketing, motorsports, said that the company signed on as a sponsor because it believed it was important to support the first F1 race in the U.S. since 2007. The company bought a suite at the track and plans to take more than 400 customers to the race. It is running an online fantasy game called the Pirelli GP Challenge, which Circuit of the Americas is promoting, and the two partnered to provide rides in a three-seat F1 car that will visit six cities nationwide.

“We knew if the track was successful Formula One would grow in the U.S., and by definition that would be good for us and our brand,” Gravalos said. “It’s good for us as a company, and it’s good for our brand.”

In addition to selling sponsorships at the racetrack, Circuit of the Americas is looking for a naming-rights sponsor for an outdoor amphitheater on the property. The amphitheater holds 17,000 spectators and is the only venue of its kind in the city. It will host its first concert next spring.

Circuit of the Americas will host 25 to 50 prospective sponsors during next month’s F1 race. Moore said they would like to land sponsors in the automotive, banking and insurance categories.

The Senior Bowl has retained Atlanta-based MELT as its sales and marketing agency to find a title sponsor for the game.

Under Armour was the title sponsor from 2007 to 2010, while Merrill Lynch Wealth Management was a presenting sponsor last year.

But as new executive director Phil Savage, the former Cleveland Browns general manager, takes over the Senior Bowl’s operations, he’s seeking several tiers of sponsorship that will drive the game’s association with the NFL draft. The title sponsorship is the most prominent and the most expensive, at mid-to-high six figures, but Savage said he’ll work with MELT to uncover more assets that will help grow sponsorship dollars into the Mobile, Ala.-based all-star game that’s been around since 1950.

“The Senior Bowl is the last untapped nugget on the NFL draft timeline,” said Savage, a Mobile native who returned home in May to run the game. “If we can use the game week as an anchor and build out events from there that align with the draft process, we can become more of a go-to place for people following the draft.”

The game’s sponsorships and its TV contract with the NFL Network currently provide close to $1.5 million in annual revenue. As a nonprofit entity owned by the Mobile Arts and Sports Association, the Senior Bowl has donated $8 million to charities, such as the Special Olympics, area schools and hospitals.

“When you think about the Senior Bowl, the NFL combine and the draft, this game is the first step in the trifecta,” said Vince Thompson, MELT’s CEO and president, and an Alabama native who grew up going to the Senior Bowl. Because the players at the Senior Bowl represent “the largest collection of future millionaires you could assemble anywhere,” Thompson said, financial services/wealth management, auto and life insurance would be categories to target.

Savage, who has extensive NFL player personnel experience with the Browns, Eagles and Ravens, still provides radio color commentary on Alabama games. Part of his strategy is to create events and Web content that will provide not only sponsorship opportunities, but also brand extensions that keep the Senior Bowl relevant in months other than January, when the game is annually played.

He likes the idea of a selection show in December to showcase the selection process for the players who are invited to the Senior Bowl. He’s also toyed with the idea of inviting the next tier of players who don’t go to New York for the draft to Mobile for a draft party and additional TV exposure.