In men’s tennis, there has been good reason in the recent past to think about the present.
The 2010s were graced by one of the best generations ever to play the game, led by the still-potent trio of Roger Federer, Rafael Nadal and Novak Djokovic. Their rivalries, and a step-change in the presentation of the sport, magnetised interest not just around the Grand Slams but the year-ending ATP Finals, which has grown over more than a decade in London to become a real global showpiece.
The Association of Tennis Professionals (ATP), which runs the men’s tour, welcomed new media partners and sponsors; gross annual revenues rose 55 per cent to reach US$143 million in the five years to the end of 2018, with player prize money growing from just over US$90 million in 2014 to US$139.4 million last year. Audience and attendance records fell season after season.
In 2020, a new era beckons, even if circumstances elsewhere have held it back. There have already been nods to the future, from broadcast deals with Amazon Prime Video to the emergence of competitive young talents and the incubation of new ideas at the ATP Next Gen Finals, an experimental tournament for under-21s held in Milan since 2017. The ATP has known for some time about the unprecedented challenges that lie ahead. Now, it is pushing the most comprehensive vision so far of what it can become.
“It’s about unity,” says ATP chairman Andrea Gaudenzi (left), speaking to SportsPro about its new strategic plan. “It’s about, first of all, finding a way where players and tournaments can actually work together and grow in the same direction, instead of spending 90 per cent of the time in toxic conversations, which ultimately drains all the energy, time and money. If you have to discuss the prize money formula every two years, it’s very difficult to actually look up and think long-term about how we fix our issues and how we improve.
“That’s the first thing. The second is trying to convince everyone to shift the focus towards the fans, who ultimately are who we all serve. They are the ones who are buying the tickets, watching the matches on TV, reading the media, and they are the target audience for our sponsors. So instead of having this tournament or player-centric approach, I think we need to shift our focus to our fans and try to deliver a better and richer experience by working united.”
Gaudenzi began a four-year term as ATP chairman on New Year’s Day. A former player with a career-high world ranking of 18, the Italian took the long route back to tennis. He retired from the court in 2003 but moved on to a law degree at the University of Bologna, then an MBA at the International University of Monaco.
That led to a second career in business, working across the fintech, music, entertainment and gaming sectors. He co-founded business payments service Soldo and became a partner of music data company Musixmatch. “I’ve been exposed to a lot of different industries, mostly around entertainment, media and technology,” he says.
In January 2017 Gaudenzi became a non-executive director of ATP Media, the tour’s global sales, broadcast production and distribution arm. It was then, he explains, that he saw the opportunity that exists for tennis in the digital age.
“Tennis, as a linear television proposition, was not a great product in the 90s because you don’t know when a match is starting, you don’t know when it finishes, you don’t know who is playing the day before,” he argues. “In today’s digital and OTT, it’s perfect: you have multiple courts, it’s on every day, you have multiple matches for different time zones, it’s global. It has men and women – which I think is a huge USP that we have – not only in terms of the product but also our audience is split because we have a strong men’s and women’s product.”
Last year, Gaudenzi made that case to the ATP board. There was a vacancy at the top of the organisation, with executive chairman Chris Kermode not offered a new contract after a surprise withdrawal of support from the ATP Players’ Council – albeit not, perhaps, tour players more generally. The presentation Gaudenzi showed the board earned him the role of chairman last October, and it also carried the seeds of the strategy he wants to put into action now.
He has been joined in that task by Massimo Calvelli, who took the position of chief executive at the start of the year to effectively carve Kermode’s old job in two. Gaudenzi characterises his plan for the sport as a “bit of a continuation” of earlier ATP progress, albeit more explicit in its aims of consolidation and digital transformation. The “complexity”, as he sees it, lies in finding “a narrative and a story where everybody could feel there is value for everybody”.
“Because it has to be a win-win, right?” he says. “If you did something where there are major losers, it’s not going to work.”
Gaudenzi identifies a central problem for the ATP and for tennis. According to a YouGov poll cited in the new strategy document, tennis is the fourth most popular sport in the world with a little over a billion fans. However, a 2018 Sports Business Consulting report gives it just a 1.4 per cent share of the global media rights market – with an annual take of less than US$700 million across the ATP, the Women’s Tennis Association (WTA), International Tennis Federation (ITF) events and the four Grand Slams.
We have a revenue per fan which is US$0.50. Golf is US$3, six times that. How can we actually increase that by providing a better experience to the fan that maybe wants to have more tennis, wants to engage more, wants to pay more, but is unable to?
Fragmentation, Gaudenzi says, is the root cause of this undervaluation.
“OK, now we have a revenue per fan which is US$0.50,” he says. “Golf is US$3, six times that. How can we actually increase that by providing a better experience to the fan that maybe wants to have more tennis, wants to engage more, wants to pay more, but is unable to? They just give up because of the different pain points.”
The target, then, is to create products which can exploit the sport’s advantages during a fundamental shift in the media environment.
“When these tech media companies roll out, they definitely roll out in 150 markets,” he says. “You have Apple Music, Amazon Music – they’re in all markets. Amazon, actually, is the first one that is in video, is in music, and is now in sport. These are the three main verticals of entertainment together with gaming, that’s the fourth one.”
He adds: “An Apple Sport, or an Amazon, or a Netflix, or even the current players – Sky or the larger media groups – are craving for a global product, because they address and distribute in multiple markets with that kind of content.”
World number one Novak Djokovic has spearheaded the creation of the Professional Tennis Players Association
To create that global product with tennis, Gaudenzi believes the whole sport needs to come together. But that process will have to start within the ATP, which has its own share of independent actors.
Internally, the challenge will begin with getting players and tournament promoters on the same side. Gaudenzi presented a version of his strategy to players before the Australian Open in January, to a positive reception, but he is aware that the hard work lies ahead. He has proposed a new formula for prize money, with a ‘base prize money’ level for tournaments set to grow by 2.5 per cent year on year, and a 50/50 profit-sharing arrangement between players and promoters.
The aim is to phase in those mechanisms over the next few seasons, from the elite ATP Masters 1000 tournaments downwards. That will come alongside a new set of independent auditing procedures to ensure consistency in how different events measure their financial performance.
Meanwhile, the ATP leadership hopes to drive through changes to the calendar. Some Masters 1000 tournaments would be expanded to run over 11 or 12 days, giving promoters more slots to showcase star turns, and allow for more rest days. Bigger draw sizes would give lower-ranked players greater opportunities at the sharp end. Third-tier ATP 250 competitions would also be subsidised to run through the second week of Masters events to give those eliminated somewhere else to go. The idea is to create a more reliably premium feel for top-level events through the year, with their delivery assessed by a data-driven scoring model.
Firmer category protection terms – meaning the status and size of a tournament would be set over longer periods – would also provide certainty to promoters.
“The Indian Wells model, which is a 30-year licence, it works,” Gaudenzi says. “It’s a beautiful tournament. I played it in the 90s, it was in the Hyatt Hotel. Now it’s a beautiful site. Larry Ellison, who is a smart man, invested heavily in the infrastructure because he was given long-term stability and now the tournament has improved incredibly over the years.”
Gaudenzi reached a career-high world ranking of 18 before hanging up his racquet in 2003
At the same time, Gaudenzi wants to centralise more of the digital and media operations associated with ATP events. Partly, this is a matter of efficiency. “Just think of our tournaments having 64 websites, 64 apps,” he says. “It’s a lot of duplication.”
Just as significantly, he believes the tour is missing out on a wealth of CRM data and audience understanding by allowing its touch points to become so scattered. The practice of buying tickets, merchandise and Tennis TV subscriptions from different places is not only frustrating for fans, Gaudenzi suggests, but also creates a gap for the ATP.
“Because we don’t have the digital properties that fit into a central database, we don’t collect the data,” he notes. “We cannot provide a single sign-on experience at the moment, where you go in one place and all of your tennis is there, because we don’t have those platforms.”
In the longer term, and in phase two of the ATP strategic plan, that more unified experience would spread to the whole sport. “Because, ultimately, the tennis fan is a tennis fan,” Gaudenzi says. “They love tennis, they love the product, they don’t care what’s in the back.”
There has been much talk in 2020 about greater coordination between the various tennis bodies, especially the ATP and WTA. During the Covid-induced interruption to the season in April, Federer floated the idea of a merger between those two organisations, winning the support of WTA founder Billie Jean King as well as the likes of Nadal, Simona Halep, Petra Kvitova and Garbiñe Muguruza.
Gaudenzi’s thinking has not progressed quite that far but there is increased contact between the major parties in tennis. “We have started a working group with the Grand Slams, WTA and ITF,” he notes. “We’ve given ourselves 18 months with a goal of reviewing where we are, reviewing the opportunity and how we can get a better governance of the sport. Covid has clearly shown that we need to work together.”
Tennis' fragmented broadcast landscape has led to an undervaluation of the sport's media rights, says Gaudenzi
One point on which Gaudenzi is emphatic is the value of closer collaboration in the sale of media rights. For him, aggregation would transform tennis as a broadcast property, giving the sport greater control of where and how it is distributed.
“You can go market by market, you can do a European deal, you can do a global deal,” he adds. “You make the choices, right?
“Now, at the moment, we have four Slams, the WTA, the ATP, some 250 tournaments and the ITF that go to market in completely separate cycles, independently, so we’re not in sync. I live in the UK and you need three or four subscriptions to follow things. It’s complex.”
Gaudenzi is adamant that the media products tennis must develop in the next few years will only be meaningful if they can offer as much tennis content as possible. A more joined-up approach would lend greater weight, for example, to any OTT service for the “super-fan” who wants to “live and breathe tennis five or six hours a day”.
He compares the crossroads ahead to that facing leading music labels when they agreed to share space on Spotify and Apple Music, putting aside their battle for talent to follow listeners into the future. Tennis’ rights holders “need to be aligned because we’re talking to the same people”, Gaudenzi adds – he does not see them competing directly for audience share.
“We don’t,” he says. “Our tournaments are in a different time in the calendar. Wimbledon doesn’t compete with the Australian Open, much as our tournaments don’t compete with them.”
What tennis is in competition with is everything else. Gaudenzi likes to cite Netflix chief executive Reed Hastings, who, pressed on his concerns about competition with Apple and Amazon, said: “We’re competing with sleep, on the margin.”
Even amidst that all-encompassing fight for attention, sports like tennis must manage the transition to digital distribution carefully. The whole audience is never going to be in one place. Social platforms will be an invaluable growth medium, while Gaudenzi also points to increased demand for non-live highlights coverage on digital outlets. There are plans for investment in ATP Studios to generate more programming and better catch-up packages.
“You have to be conscious that linear TV is very relevant and cable is still very relevant,” he says. “We see the trend going down but as has happened in music, you wouldn’t believe it, but 20 per cent of sales is still CDs. It took about 15 years to move from an 80/20 model where digital was 20. So it takes time and you have to be smart in that transition because it doesn’t happen overnight, and you have to consider all the players.”
One attractive model could be that of Discovery’s GolfTV, a single-sport channel built on a long-term global rights deal with the PGA Tour and coverage of other leading circuits, as well original and lifestyle programming. A similar offer might make sense for tennis, whose fanbase also has its share of regular participants and affluent followers, but Gaudenzi is also struck by the flexibility.
“The problem we have is that now everybody has a different strategy and they go to market differently,” he says. “And what Discovery did with golf is that they left it open, they did that type of strategy: they built an OTT platform but they’re still going market to market distributing the rights. It’s not exclusive to GolfTV. And in the States, they took a completely different strategy.
“You go through that process and you might, in the beginning, face some issues because it is very difficult today to have the perfect strategy in a fast-changing, ever-moving environment, right?”
Debates about the best route to market for tennis will continue, along with talks about more collective strategies. Gaudenzi is optimistic, and happy that the other parties understand “there is an opportunity and we can only grasp it if we work together”. Still, there is clearly a long way to go.
“The devil is in the detail,” he admits. “Can we stay high level and have that strong motivation that will make us go over the details and the things we don’t like? Because we will all have to compromise a bit, right?”
Until then, Gaudenzi is confident that the ATP itself has plenty to offer.
“We have amazing cities, we have amazing venues, and, you know, we don’t need to change all of that,” he says. “Most of the things we are doing and we have done in the past are actually great. It’s just the time now to actually package it differently because times are changing. Our audience is 45-plus; in five or ten years we need to talk to my kids, who are different animals.”
Inevitably, the Covid-19 crisis has had a terrible impact on a sport that, for its size, is disproportionately reliant on ticket sales as a source of income. Earlier this year, the WTA, ATP, ITF and Grand Slams administered a US$6 million relief fund for lower-ranked players shut out of action.
“This year is difficult,” Gaudenzi says. “This year is about trying to do the best we can out of a very, very difficult situation. It’s not optimal. There’s no fan experience. It’s not optimal on TV; the atmosphere is not the same. But that’s what happened to everybody else. This year, when you look back at it in ten years, is definitely going to be a year to forget.”
Ordinarily, men’s tennis would now be nearing a two-pronged season finale. One of those events, the ATP Next Gen Finals in Milan, will not be happening this year, though Gaudenzi speaks well of it as “a great R&D incubator”.
“You want to test new formats?” he asks. “That’s where you do it.”
The ATP’s biggest annual event will be happening, but the Nitto ATP Finals’ last appearance at London’s O2 sadly looks to be taking place without fans. That tournament will make a new start in Turin in 2021.
The ATP Cup was also launched in Australia back in January and while Gaudenzi accepts that may be one national team tournament too many alongside the ITF’s Davis Cup, and says talks will continue about those two events, he does like the shape of the calendar. “Team competition in the beginning, Finals in the end, everything else in the middle, sort of makes sense to me in terms of a fan,” he says.
Beyond those, however, he does not see cause for expanding the ATP’s own portfolio.
The growth of the sport, in Gaudenzi’s view, will depend on how well it can master digital distribution – a factor that will be invaluable to brands as well. “It’s all interconnected,” he says, noting that effective digital content and targeting will help drive a sector still worth “roughly a third of the revenue” of the ATP.
As in so many other settings, the coronavirus pandemic has only served to accelerate underlying trends. For Gaudenzi, it has shown the ATP where it needs to be to keep pace.
“I think it’s just confirming the direction,” he says. “that we need to reach the fans via the media, collecting the data, and we need to invest in the technology to do that. You know, we reach one per cent of the people with on-site. Less than one per cent. And it’s beautiful – I love going to Wimbledon, it’s one of the best experiences you can have and I actually enjoyed it as a fan much more than a player, to be honest. But it’s not for everybody. We want to serve more than one billion people and we can’t serve everybody on site, by definition.
“So Covid has put a strain on the economics but I think it makes it clear that the opportunity is there, that it’s in that space.”
This feature, 'One Vision', was originally published in Issue 111 of SportsPro magazine. 