Gaudenzi On Building Up The Challenger Tour: 'It's Vital To Tennis' Success'

  • Posted: Jan 11, 2022

One of the core ideas of ATP’s Strategic Plan is to strengthen the sport’s premium product, at the elite level. How do you view the Challenger Tour in the context of this vision?
Let me start by stating that the Challenger Tour is vital to tennis’ success. It is the pathway to the ATP Tour without which our sport cannot thrive. I know first-hand just how tough competition is at that level, having played many Challengers during my career. I have the utmost respect for the players and for tournament promoters at that level, who work extremely hard.

When it comes to the number of athletes supported financially, it’s true that tennis is not on the same level as team sports such as soccer, American football or basketball. Improving financial viability at the lower levels of tennis comes down to better promotion and support through redistribution of revenues generated at the top. I would like to highlight that this is absolutely a priority for the ATP and, importantly, we believe significant progress can be made.

We have recently created a brand-new dedicated Challenger division within the ATP, to be headed up by Richard Glover, former CEO of Tennis South Africa. The division’s sole focus will be growing the sport at that level. This follows a full assessment and financial analysis of the Challenger Tour last year by ATP Management, that looked at opportunities to restructure and increase investment. With support from our Board, our plan is to build on these opportunities in 2022.

While the Challenger Tour has itself been a sustainable product for over 30 years, I am confident this work will result in significant enhancements, including increased player earnings.

What are the fundamental differences between team sports and individual sports that explains the disparity in the number of athletes that are supported?
It comes down to fan engagement. Team sports benefit from having loyal followings, often based on location, even at the lower levels. Teams have the opportunity to play in front of their home fans for large parts of the year and build a tribal following around a shared identity. It’s these fans who are regularly buying tickets and merchandise, or watching on TV, that make the business model work. By contrast, fan interest is more star-driven in individual sports.

That said, tennis generates significant revenues and, together with golf, features among the most successful individual sports in the world. We have more than 1 billion fans – our challenge, and our opportunity, is to not only attract new fans but to build deeper engagement within our existing fan base.

Photo Credit: Marta Magni/MEF Tennis Events
Speaking of golf, many point to that as the example of a sport that manages to support far more players than tennis. What are your views on that?&#x2028
Firstly, it’s important to acknowledge that overall revenues in golf are bigger than in tennis. There are several reasons for that. However, when it comes to distribution of prize money within golf there are similarities. About 70% of the prize money in the PGA Tour goes to the Top 100 players, which is similar to our own Tour. Of course we want our remaining 30% to go further than it currently does. To do that we need to grow our revenues.

Other individual sports also offer a helpful benchmark. In comparison to sports such as swimming, skiing, boxing and track and field, athlete compensation in tennis is very healthy both in terms of number of athletes and total earnings.

Growing our overall revenues starts with focusing on the fan experience. There is so much we can do to drive synergies and reduce fragmentation within tennis, which causes pain points for fans and value leakage. The conversation about supporting the lower levels will become much easier if there is incremental growth at the top.

Give us your macro assessment of the Challenger Tour today. What do you see as being fundamental to success moving forward?
In a typical year the Challenger Tour features more than 150 tournaments, offering approximately $12 million in prize money. That money only goes so far. Too few players are currently making a living at that level of the sport.

For this to change in a meaningful way, the various bodies in tennis need to work as a united front to ensure that revenue growth at the top of our sport is redistributed to lower levels. This must happen in parallel to growing existing revenue streams at the Challenger level.

We must also acknowledge that our sport cannot be expected to provide a livelihood for an unlimited number of players. A line needs to be drawn somewhere. That decision needs to be made collectively between the various organisations in our sport, and everyone in tennis – including aspiring players – would stand to benefit from having a clearer understanding of where that line lies. And then it’s a case of continuing to strengthen earnings, opportunities and mobility for the next category of players who are currently unable to make a living from professional tennis.

In terms of calendar management, maintaining a broad geographic spread of Challenger events is key. Local events are essential for players to reduce travel costs. Having access to playing opportunities also creates a healthy competitive pathway to the ATP Tour, with talent coming into the sport from all across the globe.

Some hold the view that the Tour is focused on catering to the elite, top levels of the sport. Is that true?
I think you only have to look at the last couple of years to see that is simply not the case. The pandemic caused unprecedented financial disruption across our sport, and it has been the top players that have shouldered the bulk of the prize money reductions, as we targeted the latter rounds of tournaments. The top players and the ATP Player Council deserve a lot of credit for supporting this approach.

Conversely, we protected the earlier rounds and qualifying rounds, as well as invested heavily in the Challenger Tour to ensure that tournaments and playing opportunities were maintained. In 2021 alone, we invested over $3,300,000 in COVID-related funding, in addition to the regular Challenger funding we distribute on an annual basis.

Players ranked between 100-200 in singles actually earned on average 14% more prize money in 2021 than they did in 2019, prior to the pandemic. 147 tournaments took place at Challenger level in 2021 – down by only 11 events compared to 2019. These numbers clearly demonstrate our focus on supporting the lower levels of tennis during this difficult time.

Looking long term, the Strategic Plan we put forward in September 2020 sets out a clear vision for the sport, whereby growth at the top should strengthen the base of the pyramid in the form of increased financial support at lower levels. This support is a collective responsibility and all the major entities in tennis have a role to play by working more closely together.

Photo Credit: Rafa Nadal Academy by Movistar
How does tennis view the balance between ensuring enough players make a living from the game versus ensuring that the top players are fairly compensated for the significant value they generate?
We have a responsibility to make sure the top players are well compensated as they generate most of the entertainment value for fans at our premium events. Getting to the top of any sport involves immense hard work and dedication by athletes with no guarantees of success. We want to make sure that during a 10-to-15-year career these top performers have been adequately rewarded for making it to that level and driving the entertainment value of our sport. The PGA’s recently launched Player Impact Programme, which rewards players that drive the most fan interest in the sport, shows the same mentality is reflected in golf. We also cannot lose sight of our responsibility to ensure players ranked around 50-120, who are competing at the marquee events, are rewarded fairly.

That said, do we also see a case for distributing prize money across a greater number of players? Absolutely. When young athletes are making the decision whether or not to pursue tennis professionally, this will have an impact on whether they view it as a viable career option. It could mean the difference between a future superstar continuing in the sport or not. This is just one of many reasons why prize money increases have been weighted to earlier rounds in recent years to help with this and ultimately provide a sustainable pathway to the top.

Players and tournaments historically have been at odds over prize money. The Strategic Plan proposes a new prize money formula – is there any update on that and what difference will that make?
Our objective is clear: to align the interests of our players and tournaments in a fair and transparent manner. This will mean that when one side of the membership succeeds, so does the other.

We’re starting by implementing a new prize money model at the ATP Masters 1000s, devised as part of the ATP Strategic Plan, that has already come into effect from this year. Under the model, tournament profits that exceed on-site Prize Money across the category will be shared 50-50 between tournaments and players, contributing towards a potential new Variable Bonus Pool that would be paid to the players at the end of each year.

The formula is based on a new rule that requires independently audited tournament financials. This is a game-changing advancement for our organisation, giving full financial transparency to players for the first time since the inception of the Tour in 1990. It constitutes a major breakthrough in the alignment of player and tournament interests under the equal partnership of the ATP Tour.

Since I took the Chairman role in January 2020, I have been unequivocal in saying that transparency and alignment of interests, where everyone shares in the success of the sport, are fundamental requirements for our membership. They are the foundations of a true partnership.

Long term what is going to be the biggest driver of prize money increases across the sport?
We have to start by putting the fans first. Aggregation and centralisation are key to that. By pooling our media rights and going to market together, we have the potential to address fans’ pain points and provide them with a better experience. We have to open ourselves to new sales and distribution strategies to create new and scalable sources of revenue that filter down through our ecosystem.

Another element will be growing the brands of the players. We need fans to know and care about the story of more than a handful of players so tennis has more household names that can drive our sport. This is going to require significant investment in marketing, media, content production and technology. We need to invest in short form and off-court content to serve younger fans on social and digital platforms where they are most engaged and build hype around tennis’ next superstars.

The good news is that tennis has so much financial upside. The decade prior to the pandemic brought record growth, but the fact remains that we can do a much better job of focusing on the fan experience. Get it right, and growth will follow. Players in all stages of the pathway will stand to benefit from that.

Source link