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The top men’s tennis circuit is in talks with Saudi Arabia’s sovereign wealth fund over a possible co-investment as the Saudi oil-funded capital continues to reshape the sports industry.
ATP Tour president Andrea Gaudenzi said he had “active” discussions with the Public Investment Fund and other potential investors to support a wide range of sports and businesses, including infrastructure, technology investment and events in new markets.
Just weeks after the US PGA Tour ended its drag and struck a partnership deal with the PIF, Gordenzi warned that outside investors must “surprise the golf world by insisting on respecting the history of the game and the product.” current stakeholders rather than opposition”.
“You have to preserve something that is almost sacred, the rules of the game,” Gaudenzi told the Financial Times in an interview marking three years after his re-election as ATP Tour president. “It’s not a video game, it’s not a movie.”
The Italian’s comments illustrate the delicate balance the sports group must strike as it seeks outside investors to help it grow and develop its media and entertainment revenue.
The PGA Tour and PIF partnership ended a costly battle in which the sovereign wealth fund set up a rival independent tour, LIV Golf.
The ATP president said the partnership showed that the PIF and the PGA Tour had come to an agreement that cooperation would be better. “If you’re a golf fan, you want to see the top players play against each other,” Gordenzie said. “You want a ranking, you want a simple story.”
Private equity groups and sovereign wealth funds have been pouring money into sports as investors increasingly recognize the industry as an asset class in its own right.
CVC Capital Partners partnered with the Women’s Tennis Association last year to invest $150 million for a 20 percent stake in a new commercial joint venture between the two groups.
The ATP Tour’s own talks with CVC have yet to translate into a deal, though. ATP “doesn’t need cash, but it needs to be carefully diluted,” Gordenzi said. However, he said there were opportunities to work with outside investors in a range of areas including media production, data collection and technology.
“There are many ways to be an investor in the ecosystem. It’s not just about creating new tours or buying tournaments,” he said.
The US-based ATP Tour company’s revenue has recovered since falling to a low of $93 million in 2020, which was interrupted by the coronavirus pandemic. Total revenue for the governing body will total $250 million in 2022, up from $176 million the previous year. In 2019, its total revenue totaled $159 million.
The tour is increasing player prize money and prize pools from $180 million last year to $218 million in 2023, the largest annual increase ever.
Gao Dengqi said that external investment companies can help the sports world accelerate innovation and invest in new technologies, but he warned against a “total dismantling and disruption” approach.
Professional tennis has similarities to golf in that players are often self-employed on tour.
These four Grand Slam tournaments are called Grand Slams and are held independently of the ATP, WTA and International Tennis Federation. The International Tennis Federation is tennis’ world governing body, responsible for staging flagship events including the Davis Cup and Billie Jean Gold Cup.
Gaudenzi advocates for less fragmentation in tennis, a sport with complex and varied governance and business models.
He also tried to emulate drive to surviveThis Netflix series helped Formula 1 break into the mainstream. ATP, WTA and the Four Grand Slams join forces with streaming companies breakpointentered the Netflix top 10 in 28 countries.
“You need a story,” he said, adding: “Ultimately, you want to see top players competing in the best event in the world. The more divided and divided you are, the more chaos you create.”
PIF did not immediately respond to a request for comment.