Down the line – the fight for the future of tennis

The return of the Wimbledon Championships after a COVID-19-related hiatus last year has – despite the vagaries of the British weather – provided a welcome hit of comfort and familiarity. However, behind the order and calm, the pristine whites and luscious green of SW19, there is upheaval, unrest and a sport that many believe is facing an existential crisis.

In this article we consider six issues currently facing the game, and the challenges that lie ahead for the sport.

ATP and WTA combination – how will success be measured?

CVC Capital Partners is rumoured to be considering investing in One Tennis, a new entity that will be responsible for the management of the media and data rights for the Association of Tennis Professionals (ATP) and the Women’s Tennis Association (WTA). Last year, we discussed the possibility of a merger between tennis’ governing bodies and some of the key legal considerations of the potential tie-up, including how profits are shared and the allocation of decision-making power.

Tennis attracts a wide demographic – it has huge male and female participation worldwide across all age groups. However, the sport arguably punches below its weight in terms of commercial value and media revenue. One reason for such imbalance is the fragmented nature of the market, with the ATP, WTA, International Tennis Federation (ITF) and the four Grand Slams all operating independently. There is therefore enormous scope for a single owner, such as a CVC, to take control and maximise the economic value of tennis through coordinating calendars, negotiating sponsorship and media deals as a bundle and managing tournaments.

Nevertheless, any financial investor needs to strike the balance between the on-court sporting business and the off-court commercial return. An appropriate governance framework, such as the financial investor driving commercial decisions whilst the governing bodies retain control over sporting decisions, is likely to maximise both financial and non-financial returns.

Prize money – what’s the incentive?

Wimbledon announced in June 2021 that it was reducing winner’s prize money for its singles titles from £2.35m to £1.7m, whilst increasing the prize money for singles qualification stages to £48,000.

This redistribution of prize money at Wimbledon could be seen as promoting competition and incentives amongst lower-ranked players who are only likely to reach the first or second rounds of a Grand Slam. Losing in the early rounds of Wimbledon is more lucrative than getting to the later rounds of the smaller tournaments. For example, Emma Raducanu, the British wildcard, will receive £181,000 for reaching the fourth round, which is over six times her total career earnings of £28,762.

This redistribution can come at a price, however. It potentially incentivises injured players to nevertheless enter high-paying tournaments with their pre-injury rankings, with the knowledge that even if they retire or crash-out of their first round matches, they will still receive healthy prize purses. Tournament organisers have tried to mitigate the risk of injury withdrawals through paid withdrawals. For example, the All England Lawn Tennis Club introduced a 50:50 rule at Wimbledon, meaning players can claim 50% of their first-round loser prize money if they withdraw before the main draw is done (and their replacement will receive the other 50%).

Player welfare and player power

Player welfare is the protection of a player’s physical, emotional and social health and safety.

The fragmented nature of tennis means that there is arguably a limited – and insufficient – focus on player welfare, despite the ATP board consisting of players and tournament organisers. For example, COVID-19 tournaments being played in bubbles with no crowds and a lengthy quarantine has led to leading players speaking out about falling “into a hole” and “struggling with motivation”. Tournament organisers also have a duty to their participating players to provide safe premises in which to operate. Recent injuries caused by slippery surfaces at SW19 to star players such as Serena Williams and Adrian Mannarino could call the fulfilment of such duties into question.

Code violations – a new agency to challenge corruption

2021 has seen the International Tennis Integrity Agency (ITIA) replace the Tennis Integrity Unit (TIU) as the organisation with global responsibility for safeguarding the sport’s integrity.

The move from TIU to ITIA isn’t simply window dressing. The ITIA has legal and operational independence from other tennis bodies, a broader remit (than the TIU) and can bring charges against players directly.

In its first three months the ITIA issued seven player sanctions, with four given lifetime bans for match-fixing. Promisingly, the ITIA only received 23 match alerts during this period via its memoranda of understanding with the betting industry – a nearly 40% fall year-on-year.

More problematic has been the ongoing case of Yana Sizikova, a Russian player arrested at the 2021 French Open in relation to allegations of “sports bribery and organised fraud” at the 2020 tournament. It is understood the case was opened by a specialist French police unit, who have had “ongoing liaison” with the ITIA about the allegations.

Whatever happens next – the player has refuted the allegations and begun legal proceedings for libel and slander – the case provides an interesting insight into how more serious allegations may be dealt with in future and the role of authorities inside and outside the game.

Break point – a breakaway association for players

On the eve of Wimbledon, the fledgling Professional Tennis Players Association (PTPA) issued a statement providing clarity on its formation and structure.

The PTPA – a breakaway ’integrated’ players association – was founded in 2020 by World #1 Novak Djokovic and fellow player Vasek Pospisil. Since then its evolution has been shrouded in mystery; however, with the launch of a website, advisory board and a branding and communications team, it is priming itself to take on what it sees as an “anti-competitive” ATP and to “create transparency and fairness throughout decision-making”.

While ostensibly open to female players, the ATP is the focus of the PTPA’s immediate attention. The ATP – which has been critical of the PTPA – is understood to have delayed an imminent vote on its 30-year strategic plan, which the PTPA claims lacks transparency and clarity.

The devil of the ATP’s two-phase strategic plan – which, among other proposals, includes aggregating tournament media and data rights – is in the detail. For example, the ATP will be keen to ensure that sui generis database rights (i.e. for consolidated match data) are fully maximised; however, players will want to understand (1) any impact on other player-related data and their rights; and (2) how any revenues will ultimately be distributed through the ATP’s 50-50 profit sharing proposals.

There are signs that relations between the two bodies are beginning to thaw. However, it remains to be seen if the ATP can alleviate the PTPA’s concerns and carry forward its long-term vision for the game.

Court coverage – how exposed are events to future disruption?

Wimbledon was the only Grand Slam not to take place at all in 2020. However, the All England Club was able to cushion that financial blow, having had pandemic insurance in place since the SARS outbreak in 2003.

The All England Club’s pandemic-specific cover was very clearly triggered by COVID-19. However, many other events (and their supply chains) across the world are likely to have faced prolonged uncertainty as to whether their claims under more generic business interruption or event cancellation insurance policies were valid.

Governments and courts across the world have been working to provide clarity to policyholders and insurers. In the UK, for example – in a business interruption insurance test case brought by the Financial Conduct Authority – the courts found that the majority of sample policy wordings provided cover for COVID-19-related interruption. Similarly, two test cases have been launched by the Insurance Council of Australia (home of the Australian Open in January).

However, attention is already turning to how event organisers and suppliers may protect themselves against future disruption. It is understood that Wimbledon did not have insurance in place for 2021 – unsurprisingly, as it was “impossible” to secure coverage amid ongoing COVID-19 uncertainty. As the impact of the pandemic subsides, it is likely that irrespective of whether communicable disease coverage is available, organisers and suppliers can expect more prescriptive policy wordings (in particular around exclusions) and higher premiums.

A game in the balance

Tennis may be in a state of flux, but some things about the sport remain familiar. No better example is Wimbledon itself, where its “culture and traditions” are arguably inherent to its ongoing popularity. Whatever disruption is seen in the coming months, for the game to thrive long into the future it will need to combine progressive and ambitious reforms with a recognition of its past and everything that has made it a truly global sport.

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