After years of talk, is now the time for the ATP and WTA to play doubles?
ATP Chairman Andrea Gaudenzi first laid out his vision for closer commercial collaboration between the pro tennis tours while interviewing for his job in the fall of 2019.
Once he started the new role on Jan. 1, Gaudenzi began sharing that vision more widely behind closed doors, first to the WTA, then with players at the Australian Open in late January and again with other major stakeholders in the following weeks. Then the pandemic shut down tennis in March and shifted his focus to salvaging the 2020 season.
Tennis legend Roger Federer’s tweet in late April supporting a “merger” of the tours brought one of Gaudenzi’s primary goals back into focus as well as into the public sphere for the first time. A full merger isn’t really on the table right now — though both sides told Sports Business Journal it hasn’t been ruled out as a long-term option — but working together more closely definitely is.
“I would say a collaborative relationship,” said WTA President Micky Lawler. “I wouldn’t call it a merger just yet.”
Combining the forward-facing aspects of the ATP and WTA’s business operations is an intriguing idea that both sides support. During a June interview, Gaudenzi explained that the tours’ touch points with fans — social media, broadcasting, sponsorship, marketing and websites — are areas where the tours are interested in combining efforts and centralizing experiences.
“If I could summarize it,” Gaudenzi said, “I would love the tennis fan to have a sort of single sign-on experience into the world of tennis.”
Fully merging the tours, which combined for $251 million in revenue in 2017 (the most recent year with public tax documents for both entities), would be a convoluted process. It would require not only the navigation of scores of rights deals but also the meshing of different calendars, structures and rules as well as the combination of two well-developed and independent global brands. The process could take years to complete.
Combining commercial efforts is a quicker win for both tours, one that avoids the equal-pay debate that prompted the ATP Player Council to kill a WTA-driven effort for a possible merger in 2008. This time, the potential commercial benefits are clear. Sponsorship, marketing and broadcast are three areas where working more closely together could pay off the most.
“The content becomes better when you have both genders,” said former ATP tournament director Bill Oakes, “and I think it becomes more appealing to sponsors, television, the ticket holders, the media, I think it’s really beneficial to all those groups.”
“It’s a synergy,” said Tennis Channel President Ken Solomon. “It’s not either/or. They are their greatest allies.”
The ATP and WTA have the same linear and/or OTT streaming partner in the United States, United Kingdom, China and Russia. They’re on separate channels in many countries, including strongholds Australia and Germany. The ATP has 75 broadcasters in 227 countries on six continents; the WTA has 30-plus rights holders.
Gaudenzi said attempting to pool ATP and WTA rights, along with the Grand Slams, is a high priority for him during the next few years. Lawler agreed: “Would we ever aggregate? Yes, absolutely.”
But simply pooling rights doesn’t necessarily make them more valuable, according to sports media consultant Ed Desser. How much interest buyers and viewers show in ATP and WTA tennis differs by country and is greater in Germany, for example, than the U.S.
“If you’re just providing more tonnage, that doesn’t necessarily create more value,” Desser said. “If you’re able to deliver more of what buyers want, then you’re in a better position.”
Desser agreed that pooled rights would give the ATP and WTA one voice and a stronger position in negotiations, provided there were multiple bidders. Involving the Grand Slams in any aggregated package would immediately increase the value, he said, but those four majors control and sell their global rights individually.
To get in position to pool, the tours would need to reclaim control of their rights by either ending deals early or running them down to expiration. The rights could then be sold by either one of the tours, a shared media rights operation that would have to be created, or a third party. Gaudenzi pointed to ATP Media, created in 1999 to sell the ATP’s various tournament categories’ rights, as a successful example of the tour pooling its various rights. London-based ATP Media’s revenue grew 15.3% in 2019 to $139.5 million, with a $16.8 million gross profit, according to documents filed with the U.K.’s Companies House.
“When you control the rights, you are in charge of the decision versus having the market dictate and fragment your rights all over the place,” said Gaudenzi, whose background includes gaming, music and broadcast. “For us, the complexity being global, fragmented is obviously 10x, but doesn’t mean we can’t achieve it.”
It’s reasonable to think partnering with the ATP in some fashion could help the WTA’s media distribution efforts. The WTA is halfway through a 10-year deal with Perform Group, now known as DAZN Group, that’s resulted in climbing revenue, but also soaring expenses and a $2.4 million loss in 2018, according to the tour’s U.S. tax forms. Joining with either ATP Media or building a new aggregated rights entity would allow both sides to save production costs and present a better offering to the market and the fan. As Solomon said, “The goal would be to have the entire package, free to travel about the world to sort of do big deals.”
In the U.S., the Tennis Channel’s viewership increased 33% in 2019 when the broadcaster was able to offer both tours after the WTA returned from beIN Sports. Solomon thinks having men and women on the same channels would help tennis reach beyond its avid fans and break into the mainstream more regularly.
“If Coco Gauff were being marketed on the same platform as the ATP, does that help the ATP? With non-tennis fans?” Solomon asked.
The answer, he said, is yes. Combining the forward-facing aspects of the tours would give each side more star power to promote, “more great moments to select from.”
Sponsorship and marketing
Gaudenzi said the pandemic has shown tennis that it needs to extract more value from its media rights. Sixty-five of the two tours’ tournaments have been canceled, suspended or postponed in 2020, according to SBJ research. Many of the events, especially smaller ones, rely heavily on ticket and sponsorship revenue, which made holding tournaments without fans impractical. Making tennis media rights more valuable could have a positive impact on the sport’s business model beyond just mere survival during lean years.
“The scale of those two coming together would allow tennis to compete more evenly and more effectively,” said Solomon.
Tennis already is the most gender-equitable sport in the world. In Forbes’ latest richest athletes lists, the highest paid men and women were tennis stars Federer and Naomi Osaka. The tours play combined events in 22 of the calendar’s 48 weeks, and 13 of the 17 biggest tournaments feature men and women. That includes the four Grand Slams, where equal prize money is paid. And the sport’s fan base is equally split among women and men as well.
Leverage Agency CEO Ben Sturner, who has done sponsorship work with the WTA, said a more closely aligned ATP and WTA would be a unique “one-stop shop” for sponsors seeking the most star power and gender equity for their spend.
“This would be the one sport where you could really market to the male and female consumer together,” said GSE Worldwide Executive VP John Tobias, who represents several top players.
Tom Jacobs, of Activent Marketing, recognized the potential when he arranged deals for Valspar Paint and Osteo Bi-Flex with the U.S. Open and U.S. Open Series. Research showed that men and women pick paint colors together, while joint pain is gender neutral. “The gender balance is the reason why we have brought two major sponsors to the world of tennis,” Jacobs said.
Closer collaboration could also help the tours expand their sport’s reach in the U.S. The ATP and WTA ranked last out of 14 properties in rEvolution’s Fans Sponsor Rankings Index, a survey SBJ published in May that looked at a sports property’s reach in the U.S. combined with the effectiveness of the sport’s sponsors.
“Instead of having to choose between the two as a marketer, you’d be able to get more bang for the buck, with a little bit of an increased price, which would allow for more sponsors and more activation,” Sturner said.
Pioneer Billie Jean King responded to Federer’s April tweet by explaining that the WTA she helped found in the early 1970s was always a Plan B. The women wanted to be united with the men all along, but were forced to go their own way by a then male-dominated U.S. Tennis Association that didn’t respect women’s tennis.
That was the feeling again in 2008 when the WTA, under Larry Scott’s leadership, unsuccessfully floated the possibility of a tighter relationship with the ATP.
“It does feel differently this time,” Oakes said. “I get that there are some structural issues that would need to be overcome, but the fact that they’re having these conversations is most important. For years, the discussion was almost forbidden.”
Attitudes toward gender equality have changed in the past dozen years, as has the makeup of the ATP Player Council, which has fewer incendiary characters in its ranks. The ATP’s leadership — Gaudenzi and CEO Massimo Calvelli — is driving increased interest.
“All of this conversation about the ATP and WTA merging is because of these guys,” said Max Eisenbud, senior vice president of tennis clients at IMG. “These two guys started conversations on Day 1 that they need to do more with the women, we need to pool media rights, we need to be united as one sport, and those words were not coming out of the ATP, ever.”
When Chris Kermode was driven out of the ATP’s top job by the council in late 2019, the gig was split into two roles — a chairman and a CEO.
“When it goes back to normal,” Gaudenzi said, the idea is “me focusing more on the longer vision, the strategy, cooperation between the Grand Slams, WTA and ITF, and the bigger picture, because you need to know where you want to be in 10, 20 years, if you want to have a plan for next year.”
The pandemic is an undeniable looming influence, forcing the tours to work together. The financial damage won’t be clear until at least the end of the year, but it’s expected to be significant, according to Lawler.
“Right now, they probably need each other more than they ever have,” said Tennis Canada CEO Michael Downey. “There is probably a lot of work going on right now about how do you stage successful tennis tournaments, broadcast-only. Well, I would hate to think both tours are doing that independent of each other. Why not merge that thinking?”
Despite recent schedule releases, it’s not certain how many events will be played this year or how they’ll turn out financially, or whether another wave of the pandemic will ripple across the globe. But how closely the tours work together now and in the future is something they can control.
“Do we have a solution to every problem? No,” Gaudenzi said. “Have we made the decisions? No. And honestly, it’s also been slowed down a little bit because we have to deal with emergencies. But the intention and the willingness is definitely there and will continue to go on.”
Major moments in ATP and WTA history
The Original Nine broke away from male-dominated professional tennis in September 1970, holding the first women-only professional tournament in Houston.
The Virginia Slims Tour women’s tennis tour launched with 19 events.
Top male pro players formed the Association of Tour Professionals during the 1972 U.S. Open.
The WTA was officially formed out of the Virginia Slims Tour.
The Men’s International Professional Tennis Council was formed, giving the ATP an administrative body consisting of ATP players, tournament directors and International Lawn Tennis Federation representatives. The MIPTC was in place until 1989.
During a parking lot press conference at the 1988 U.S. Open, ATP Chairman Hamilton Jordan announced that the ATP was assuming more control of men’s professional tennis and formed a new tour along with directors of the world’s top tournaments.
The new ATP Tour launched, with players and tournament directors sharing power and decision-making through the ATP board.
The Women’s Tennis Council merged with the WTA Players’ Association to form the modern-day WTA Tour.
An effort led by Larry Scott and the WTA for a possible merger with the men’s tour was shut down by the ATP Player Council over the equal-pay issue.
The ATP World Tour was unveiled, with increased prize money, infrastructure investment and a simpler structure.