The U.S. Open this year has been a thrilling spectacle, featuring rising star Coco Gauff’s victory over Aryna Sabalenka and Novak Djokovic’s historic 24th Grand Slam win against Daniil Medvedev. However, the sport of tennis itself has been grappling with financial challenges for years, and it now faces added pressure due to Saudi Arabia’s Public Investment Fund (PIF) making significant forays into various sports like golf, soccer, and mixed martial arts. Tennis, which has already initiated preliminary discussions with Saudi Arabia, could potentially be the next target for PIF’s investments.
Players are eager for a transformation. Retired tennis legend Maria Sharapova expressed, “Of all the major sports worldwide, tennis arguably holds the greatest potential for financial growth and untapped value.” Tennis, despite its global popularity, contributes only 1.3% of total earnings from global media sports rights. Part of this underperformance can be attributed to the fragmented nature of tennis, with numerous entities like the Women’s Tennis Association (WTA), the U.S. Tennis Association, and independent tournaments. This complex structure hampers tournament scheduling and weakens bargaining power for sponsorships and media deals. Erratic scheduling and lengthy matches further deter broadcasters. Financial challenges also extend to players who often earn meager incomes while shouldering the costs of coaches, training, and travel expenses.
In light of these issues, Sharapova believes tennis should explore the possibility of bringing in external capital, such as private equity firms or sovereign wealth funds. Many believe that tennis could be susceptible to a rival sports league, similar to PIF’s approach in golf, where its LIV golf tour eventually collaborated with the PGA Tour to resolve contentious disputes.
Could a merger be the solution? CVC Capital Partners recently acquired a stake in women’s professional tennis, eyeing the sport’s commercial potential. There’s speculation that CVC might pursue a merger of the women’s and men’s tours. However, such a merger is intricate, requiring approval from multiple stakeholders with differing views.
Other private equity investors are also considering similar strategies, but it remains uncertain whether any of them can compete with PIF’s deep pockets, especially when the fund has shown limited interest in financial returns.
Not all tennis insiders are opposed to Saudi investment. Some argue that partnering with PIF could aid in refurbishing the country’s tarnished reputation. Nevertheless, there are dissenting voices within the tennis community, with concerns primarily focused on the sport’s financial health. The decision by the women’s professional tennis tour to suspend tournaments in China following the disappearance of player Peng Shuai not only affected the tour’s business but also failed to pressure China into facilitating a meeting with Peng.
Some players suggest that Saudi investment could contribute to addressing pay equity, a persistent problem in tennis. Beyond the four Grand Slam events, male players earned roughly 70% more on average than their female counterparts during tournaments last year. Although the women’s tour has reached a pay equity agreement this year, its full implementation is set for a decade from now. Jessica Pegula, the third-ranked WTA player, stated, “If Saudi Arabia could help us achieve equal prize money, despite the drawbacks, there are many potential benefits.”
However, a consensus on this matter remains elusive. Recent rumors about the WTA potentially holding its finals in Saudi Arabia drew criticism from former tennis star Chris Evert, who stated her opposition: “I would be against it, but I don’t have a vote.” Ultimately, the decision was made to hold the event in Cancún, Mexico, in response to these concerns.
