In this first of two articles on pro tennis in the U.S., we look at the changing landscape of tournament tennis, sponsorship challenges and more.
By Richard Pagliaro
This is the fifth in a series of articles about the tennis industry’s changing landscape, and this topic of professional tennis will be further explored in an upcoming issue. Future topics in the series will deal with participation, court construction and more. To view past “State of the Industry” stories, visit tennisindustrymag.com. We’d like to hear your comments and concerns, too. E-mail them to firstname.lastname@example.org. Please put “state of the industry” in the subject line.
The baseline at the two public courts looked more like a fault line — completely cracked, as crevices snaked around the rest of the courts like varicose veins cracking the surface of a statue. The two scarred public courts in New Haven, Conn., are home to the youth tennis program associated with the Pilot Pen Tennis event, the final stop of the 10-tournament Olympus US Open Series of pro events. But while the cracks may suggest tennis coming apart at the seams, in reality it was a sign of tennis coming together.
“We have such a tennis boom here in New Haven that last year we realized we had a half-mile of cracks in the two public parks where we play the majority of our tennis programs,” Pilot Pen tournament director and former WTA Tour CEO Anne Worcester says. “Our juniors played their way through the courts, creating the cracks. In a terrible budget year, the city of New Haven made a historic decision to secure capital funds to repair those courts.”
What do repairs to a pair of public courts removed from the Pilot Pen’s home on the campus of Yale University have to do with the state of professional tennis in the U.S.?
Fixing the fissure on court is a physical reminder of the growing fusion between pro tennis events and community tennis in the U.S. From New Haven to San Jose to Los Angeles to Atlanta to Delray Beach and Newport, pro tennis is increasingly interacting with local communities to not only benefit their bottom line, but also help grow the grassroots game.
But is it working? Why is it important for American tournaments to succeed, and is there a direct correlation between tournament tennis popularity and the growth of recreational play?
“On a grassroots level, it has always been our strategy to leverage the power and excitement of professional tennis to build participation and interest at the community level,” Worcester says.
Increasingly, pro tournaments are partnering with community tennis aiming to serve shared goals.
This past December, the USTA Southern Section finalized its purchase of the ATP tournament formerly staged in Indianapolis, another US Open Series event. The tourney, now called the Atlanta Tennis Championships, from July 19 to 25, did not have a title sponsor as of early July. But tournament director (and Southern Section marketing director) Bill Oakes was not pressing the panic button, in part because he believes there is strength in the Southern Section’s numbers.
“Being part of the largest USTA section has certainly helped us,” Oakes says. “We’re regularly communicating with 185,000 USTA members in the South, and being able to communicate with recreational players provides potential ticket buyers and sponsors from that database. Both are complements to each other: We’re hoping the tournament will help grow our membership and increase player participation. The flip side is we’re hoping as membership grows, the tournament grows.”
Clearly, community interaction is vital to the success of a pro tournament, but it does not guarantee commercial success. In addition to helping support a year-round junior tennis program that Worcester says has fed 4,000 local kids into the New Haven Parks and Recreation Department program, the Pilot Pen also has a variety of promotional events that helped the tournament draw 78,480 fans last year, with national TV coverage on CBS and ESPN2.
That’s the good news.
Despite having a vision that extends beyond the boundaries of the court, the New Haven USOS stop may not be on such sound financial footing in a matter of months. Pilot Pen will not renew its title sponsorship at the conclusion of the tournament this August and while Worcester is optimistic she’ll procure a new sponsor for 2011, so far there have not been serious negotiations with a potential replacement.
In a difficult economic climate, plugging a title sponsorship hole is not nearly as easy as patching cracks on a court.
“Unfortunately, a lot of tournaments’ title sponsor terms came up right before the economy tanked. Never before have so many tournaments been looking for a title sponsor at the same time,” Worcester says. “It is a difficult time. What helps is that there is a new philosophy at the USTA that pro tennis is not the end, it is the means and the best engine for growing the game and impacting communities in a positive and healthy way.”
The USTA, which owns events in Cincinnati and New Haven and is selling its US Men’s Clay Court Championships in Houston to River Oaks Country Club, the event’s host site, recognizes the sponsorship squeeze.
“I think the challenge is in the sponsorship environment,” says Harlan Stone, USTA chief business and marketing officer. “Sponsors in general are buying fewer events and doing more with those events. So I would say it’s a mixed story. On the one hand when you get sponsors, they are really doing a lot with the events and helping tournaments market, and so those tournaments that have titles sponsors are doing pretty well. The challenge is that not many companies are adding to their sponsorship portfolio and so indeed it is not an easy time to be looking for a sponsor.”
There are signs of sponsorships bouncing back. In recent months, both the ATP tournament in Los Angeles and the WTA event in San Diego have signed title sponsors: LA is now the Farmers Classic and San Diego is the Mercury Insurance Open.
American tennis also has its own form of tournament insurance: the Olympus US Open Series itself.
Changing the Tourney Landscape
A fundamental challenge the USTA has faced throughout the years is how to connect the two distinct organizational arms — the Community Tennis and Professional Tennis sides — to create a cohesive unit capable of fulfilling the not-for-profit organization’s mission: to promote and develop the growth of tennis.
Six years ago, Arlen Kantarian, then USTA chief executive of Professional Tennis, created the US Open Series, which changed the landscape of American professional tennis. Kantarian’s concept was ambitious: Link U.S. tournaments into a cohesive summer circuit to create buzz, with tournament finals televised live every weekend, and building up to the USTA’s crown jewel: the US Open.
Essentially, Kantarian leveraged the immense financial and populist power of the US Open to benefit U.S. tournaments by building the USOS, which in turn channels even more exposure and sponsorship dollars back to the Open.
The Series makes sense on several levels: With funding from title sponsor Olympus, it provides marketing muscle for tournaments with a national advertising campaign that individual events could not afford on their own; it ensures all USOS events can employ the Hawk-Eye electronic line-calling system; it offers financial incentives for players to play more American events in the form of bonus money; it gives fans the opportunity to view more tennis on TV in standard time slots; and it enhances the already omnipotent US Open, the world’s largest-attended annual sporting event.
The USTA reports the 2009 US Open Series events, including the Open, generated “a record 1.6 million attendees, 128 million TV viewers and over 28 million website hits.”
Television gives the US Open Series its sizzle, helps the USTA earn mega-bucks in advertising and sponsorship and keeps tennis in the public eye, which is vital for a sport competing with major team sports to attract elite American athletes. The best female tennis player in the world plays the sport in part because her family came across tennis on TV while flipping through the channels.
“One way to help tennis in America is to have more American tournaments,” World No. 1 Serena Williams has said. “Growing up, I remember watching Monica Seles play on TV and thinking how cool it looked. You’ve got to see it to be it.”
Tournament tennis has never been more visible on TV than it is now. The partnership of the USTA and ESPN in the US Open Series led to the “Grand Slam Network” acquiring US Open cable rights. The Open made its debut on ESPN last summer after spending years with USA Network. ESPN reports its combined daytime and primetime coverage of the 2009 US Open was up 18 percent from USA’s coverage in 2008, as more than 50 million people tuned in for at least a portion of the Open.
Impact of the USOS
How important is the US Open Series to its tournaments?
“It’s almost priceless,” says Bob Kramer, who has served as Los Angeles tournament director for 26 years. “It’s hard to put a number on it. It is really television that is a driving force and having that TV package with ESPN really reinforces the US Open Series and its impact. Obviously, with each event having six to eight hours of live TV that most events did not have without the Series and an overall title sponsor in Olympus gives tournament tennis real traction in the U.S. We probably wouldn’t have been able to get a title sponsor without the US Open Series. It’s that simple.”
For all the positives the US Open Series provides, there are potential potholes on what the USTA once billed as “the Greatest Road Trip In Sports.”
Kantarian hoped that offering bonus money would encourage more of tennis’ top players to compete in Series events. That has not always been the case as some European men, including Roger Federer and Rafael Nadal, take a break after Wimbledon and only play the mandatory Masters 1000 events in Cincinnati and Canada. Even with the expanded TV coverage and marketing muscle the Series provides, it wasn’t enough to save tournaments like Indianapolis, which could not attract a title sponsor after RCA dropped it, and the WTA’s tournament in Carson, Calif., which was plagued by embarrassingly low attendance.
While it is believed increased TV exposure has played a part in the rise in recreational play — the USTA and Tennis Industry Association report recreational participation topped 30 million for the first time in 2009 — the USTA has no research data to support any direct link between the Series and the increase in player participation. Despite the growth of tennis’ TV audience, USTA membership has not spiked dramatically since the creation of the Series.
“We’ve never gone into that depth in the research, and obviously I would like to think it’s a component of the increase we’ve had in participation over the last five years,” says Stone. “But I wouldn’t want to overstate it and suggest it’s a primary driver. I think it’s a contributor to the increase and probably one of several factors of it helping grow the game.”
Standing Out in a Crowded Field
Some insiders are concerned that in an effort to cut costs, the USTA may take its foot off the accelerator, sending the Series into cruise control that could create a setback in pro tennis’ drive to gain ground in a crowded sports landscape.
“As anyone around the sport knows, tennis is a tougher and tougher sell in a very competitive time, with so many sports competing for attention, and we have to reach out more and more and figure out ways to make tennis more available and appealing,” says Hall of Famer John McEnroe. “Look at how brilliantly NASCAR has marketed itself. The US Open Series has helped, but what is tennis doing to compete with other sports?”
John Korff has played the marketing game from both sides of the net. For years, Korff ran the successful Mahwah, N.J., exhibition event, paying annual appearance fees to draw Steffi Graf, Monica Seles, Jennifer Capriati and Anna Kournikova while generating a buzz with fans and sponsors through creative promotions, including an international rum-tasting contest, a chili cook-off and concerts featuring the Village People and Beach Boys. He later served on the USTA board of directors. And while Korff lauds the USOS, he has concerns over the future of American tournaments.
“I don’t mean this in a negative way, but pro tennis in the U.S. is going to run like if you’re driving down the street at 65 miles per hour then take your foot off the gas pedal. You’ll go 65 miles per hour, for a little while — and then you’re going to go 60, then 55 and then continue to slow down,” Korff says. “It may take three or four years to slow down, but by the time anybody notices, it’s going to take twice as long to turn it around.”
A combination of events — the national nosedive into recession, several tournaments losing title sponsorship simultaneously, the departure of Kantarian, the loss of Mercedes-Benz as an ATP sponsor and Sony Ericsson reducing its sponsorship commitment to the WTA as well as organizational cost-cutting measures — has created a challenging climate for tournaments.
Traditionally, tennis’ top title sponsors have come from financial institutions and the automotive industry, which were among those hit the hardest during the recession, prompting many to eliminate or reduce tennis sponsorship. Organizations have also had to restructure budgets and staffing in response to the economy and the USTA opted not to replace Kantarian and the reported $9 million in compensation he made in his final year, leaving a large burden on Stone’s shoulders.
“The USTA has one guy who’s one of the best in the world at what he does: Harlan Stone,” says Korff. “He’s a very capable guy and one of the busiest men in tennis, but it’s like they dumped everything on him. It’s like what the hell: Do they think this guy is Audie Murphy who can go kill 8,000 guys by himself with his arm wounded? You’ve got to give him help.
“On the one hand you’ve got volunteer leadership of the USTA saying, ëWe’ve got to cut expenses.’ But the last place you cut expenses is on the sales and promotion side, otherwise you’re going to ruin your income stream. And once you’ve ruined your income stream, then all these wonderful things go away. I’m not involved in the USTA nationally anymore, but if it were me I’d be supporting the pro tennis staff as much as I could, because that’s where the money is going to come from.”
The USTA has dug into its deep pockets to support American tournaments as well as its own Challenger circuit, but is it enough to aid tournaments, who are feeling the pinch of sponsorship loss and corporate clients cutting back on buying box seats?
No Room to Maneuver
Two-thirds of the ATP’s 62 tournaments are at the lowest rung, the 250-level events, and for some, the economic margin for error sometimes seems as narrow as the baseline.
“The Tour has been sympathetic to the challenge of the tournaments and the addition of Corona’s sponsorship has helped out a great deal this year,” says Newport tournament director Mark Stenning. Corona Extra recently signed a 5-1/2-year deal with the ATP as the global Premier Sponsor.
“As much as that helps, the players and Tours need to be sensitized to the fact that this is not a business where there is a lot of money to be made,” Stenning adds. “In our case, last year we not only had the economic downturn, we had more box holders cancel in 2009 than at any time in my 30-year career with the tournament. And then you’re at the whims of the weather.”
Unlike Wimbledon with its new retractable roof over Centre Court, U.S. tournaments are at the mercy of the elements. Even a few days of rain can dry up daily revenue streams and send a tournament into the red.
“We had three days where we had a significant amount of rain last year and what really makes or breaks our tournament is the revenue streams from concession sales to food to program sales to souvenir sales — all of those types of things — and throw in a day of rain and it can easily cost you $30,000 to $50,000 in lost revenue,” Stenning says. “You can never make that revenue up because you can never get that day back. You move matches to the next day but I don’t have any more seats to sell. It’s not like a Triple-A baseball team where I’ve got 80 games and I can make up that cost average over the course of the summer. We have seven days to make or break it.”
For its part, the ATP is confident in how the men’s tour is weathering economic challenges. “We’re fortunate to be enjoying one of the most exciting times in the history of men’s professional tennis,” says Mark Young, ATP World Tour CEO of the Americas. “Globally the ATP World Tour set a record with 4.4 million spectators last year and we are on track to equal or better that number this season.
“In 2010, four of the first five ATP World Tour Masters 1000 tournaments in Indian Wells, Miami, Rome and Madrid all set attendance records. This year marks the first time both Indian Wells and Miami attracted over 300,000 fans in the same year. North American attendance has held steady over the past couple of years at nearly 1.5 million fans, which is a testament to the popularity of the sport, especially in a difficult economy.” Young also points to the recent purchase of the Indian Wells tourney by Oracle CEO Larry Ellison as a “major boost for the sport and a great vote of confidence for tennis in the U.S.”
More Issues, More Questions
But what is the immediate future for American tournament tennis, and how can it make a bigger footprint in a crowded sports landscape? Is pro tennis in the U.S. doing all it can to remain vital among not just tennis fans, but those who aren’t as devoted to the sport?
Should there be more combined men’s and women’s tournaments in the U.S.? And an even bigger question, should the men’s and women’s tours merge? Are players receiving too much prize money? Should some of that money go back into grassroots tennis programs? How important is the media in creating and promoting pro tennis, and what does that mean to the tennis industry as a whole? How has the media itself been affected by recent economic challenges?
There are a myriad of questions, and potential answers, out there, and we will explore them — and possible solutions — in the next issue.
See all articles by Richard Pagliaro