Women’s tennis will be leveled with men’s tennis – Kommersant newspaper No. 174 (7375) of 09/21/2022

Tennis

The leadership of the Women’s Tennis Association (WTA) has approved a decision on an agreement with a large investment company CVC Capital Partners, known for its investments in professional sports. It is expected that the $150 million that women’s professional tennis will receive will reduce the dependence of the WTA on Chinese financial investments, and most importantly, increase the number of women’s tennis tournaments and bring them as close as possible to men’s in terms of prize money.

The agreement between the WTA and CVC Capital Partners, an international private equity firm specializing in private equity and advisory, is the most important business deal of the year in professional tennis. Its likelihood was discussed in the world press a few months ago, but the approval of the board of directors of the women’s professional tour became known only now. Earlier, the British The Telegraph wrote that CVC would invest $150 million in women’s tennis, and, according to Kommersant, this information is true. However, the WTA emphasizes that the purchase of a fifth of its shares, as reported by some publications, is out of the question. WTA and CVC create a new company – a limited liability company. The Women’s Tour will fully transfer its commercial rights to him, and CVC, for its part, contributes the above amount. It is one-fifth of the new company’s estimated value, which, according to the WTA, is $750 million.

Under the terms of the deal, WTA currently owns 96% of the shares of the new company, but over the next five years, the share of CVC will grow by 4% annually and eventually reach 20%. The new company will have the authority to deal with all the assets of the WTA, including the sale of television broadcasting rights and licenses for tournaments, the conclusion of sponsorship agreements, etc. sports matters remain the responsibility of the WTA.

The need for global investment in women’s tennis is driven by the WTA’s large debts, which in turn are due to several reasons, the impact of the pandemic being just one of them. A notable impact on the WTA’s financial condition was the so-called Peng Shuai case, in which the women’s tour continues to take an uncompromising position, demanding an independent investigation. Recall that last year this athlete, the former world number one in doubles, first accused one of the highest Chinese functionaries of sexual harassment, and then actually abandoned her accusations. As a result, even in the context of the gradual fading of the pandemic, the WTA lost a significant part of the so-called Chinese money, which it had been counting on relatively recently, expanding its interaction with China. In addition, the WTA has had to allocate significant funds to raise the prize pools of several major competitions, including Indian Wells, Miami, Madrid and Beijing (the Chinese tournament, however, has not been held for three years). This was done so that women earned there no less than men.

All this could not but affect the general state of affairs in the WTA, which is significantly inferior to its male counterpart, the Association of Tennis Professionals (ATP), in almost all key financial indicators. For example, ATP revenues last year amounted to $854 million, while WTA revenues were more than two times less, only $418 million. This season, ATP holds 66 tournaments, which, taking into account prize pools and various bonuses, play out about $142 million in prize money, in while the WTA has only 51 tournaments with $52 million in prize money. With a $150 million injection into the women’s tour, it is expected to overtake the men’s tour in terms of both the number of competitions and prize pools, and the WTA’s market capitalization will increase several times over.

By the way, earlier CVC offered to allocate $600 million for the unification of the ATP and WTA, but the men’s tour quickly pulled out of the negotiations, considering their continuation inappropriate. However, ATP remains a strategic partner of the WTA. In any case, she is still considering the possibility of her participation in the ONE Tennis project presented by the ATP management, the main goal of which is to increase commercial income in tennis.

“The WTA agreement with such an institutional investor as CVC can be considered a landmark,” believes Alexei Selivanenko, member of the Board of Directors of the International Tennis Federation (ITF). “It shows that today professional tennis is an attractive asset in itself, in which serious investors are ready to invest pursuing clear commercial goals and having no other, including political, interests. I think we can expect news about investments in other tennis assets in the near future.”

Evgeny Fedyakov