ATP chairman Andrea Gaudenzi has revealed that talks have taken place with investment firms but insists the top men’s tennis tour is in a healthy financial position and will only seek to raise capital if it provides a “clear plan for growth.”
After being re-elected for a second term last year, the Italian is now focusing on the long-term financial development of the ATP Tour.
The tour’s revenues have recovered since falling to a low of $93 million in 2020 due to disruptions caused by the coronavirus pandemic.
The body’s gross revenues totaled $250 million in 2022, up from $176 million the previous year. In 2019, its gross revenues reached $159 million.
For 2023, the tour increased player prize money and bonus pools to $218 million, up from $180 million in 2022.
Despite this, the ATP is exploring potential investments to grow the sport and attract a wider audience.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Gaudenzi confirmed that he recently held talks with Saudi Arabia’s sovereign wealth Public Investment Fund about possible co-investments into the tour’s infrastructure, technology, and events (in new markets).
Those discussions have not been exclusive to Saudi, however.
In an interview with Sportcal (GlobalData Sport), Gaudenzi said: “It’s not just Saudi we are speaking to. I'm speaking on a weekly and monthly basis with different partners and funds, be it wealth funds or private equity.
“Smart people who have capital and want to invest in the sport are always great because they come up with great ideas and sometimes to do very ambitious projects you need capital.
“Whether we do a private equity deal or not, I honestly don't have the answer. We don't have a need for cash now we're very healthy. Our business is very healthy.
“If we do raise capital it has to be with a clear plan for investment in growth. We cannot just raise capital for dilution and distribute it down to the members. It must be with a plan of growth and a very strong plan and business case.”
The Women's Tennis Association (WTA) last year agreed a strategic partnership with private equity investment firm CVC Capital Partners in which it gave up a stake of around 20% in its commercial rights for $150 million.
The tie-up saw the creation of the WTA Ventures commercial entity. The WTA will continue to own the majority interest in the partnership and retain full regulatory and sporting responsibility for the women’s game.
On the WTA’s deal with CVC, Gaudenzi said: “There is a lot of private equity coming into the sport, I don't think that is generally a bad thing. Private equity firms bring expertise, and knowledge and they can also bring a lot of best practices from other sports, so definitely they can bring value.
“CVC has a lot of expertise in different sports. I hope it pushes the WTA and WTA Ventures in the right direction.”
In 2021, the ATP and WTA appeared to move a step closer to a potential merger after combining their marketing operations.
The tours officially transitioned to an integrated marketing operation in January 2021, building on what the respective organizations called an “unprecedented collaboration.”
Calls for the ATP and WTA to merge intensified in 2020 as the pandemic severely impacted the sport, both in terms of its calendar and finances.
Talk of a merger has softened recently, particularly after the WTA’s deal with CVC.
Gaudenzi, a former professional tennis player, said: “We're now starting to discuss Tennis Ventures, which is the merging of Tennis Data Innovations, ATP Media, the commercial assets of the ATP Tour, and WTA Ventures. That is what we’re working on, and we're fully committed to that with the WTA and our three commercial entities.”
“Starting from the commercial entity makes a lot of sense and will deliver the most value to the fans.
“Whether we then follow up with the governance of the sporting co, the ATP Tour, and WTA Tour, to manage the product, it could be a natural follow-up step. My wish is that we do that jointly with the slams. If we do have a governance and product, the idea is also to bring the slams on board because it's a natural one.
“If we do Tennis Ventures, it’s much easier to do a deal between two parties than six or seven.”
Gaudenzi was a key player in creating a 'T7 working group' during his first term alongside the WTA, the four grand slams, and the International Tennis Federation, in a bid to streamline the governance of the sport.
In his second term, he will also continue to implement the tour’s ambitious OneVision strategic plan to revolutionize the sport, which started in 2020 when his first term began but was delayed due to Covid-19.
Through OneVision, players and tournaments have been guaranteed a 50-50 share in profits, while all top-tier ATP Masters 1000 tournaments (the events with the most ranking points) have been expanded to 12 days, up from eight.
The first phase of the long-term plan, which came into effect in 2023, has already generated the largest single-year increase in player compensation in its history, with a $37.5 million rise from 2022 to 2023 across the ATP Tour and second-tier Challenger Tour.
For the 2022 season, an additional $12.2 million was distributed to the players, raising the total bonus pool to a record $33.5 million for 2023.
On his goals for the next four years, Gaudenzi stated: “The longer-term objective for me is ultimately OneVision and shared governance with the slams to fully leverage the opportunity out there. I believe tennis is well placed to be a tier-one premium property in the sport globally.
“But to do that, we need male and female players together and all the tournaments together including grand slams, only that way with everybody in the same room can we achieve growth.
“Another long-term goal is to provide a fair representation to the players vis-a-vis the grand slams. Now they are in the boardroom regarding our ATP tournaments, but we have very little control over what happens on the slams side.”
Read our in-depth interview with Gaudenzi