The Business of Sports

Tennis, Golf Begin 2012 Campaigns


From Iowa to New Hampshire and on to South Carolina next week, America’s GOP Presidential hopefuls have been volleying ferociously back and forth to see which of them will outlast the others to become the Republican Presidential nominee.

On the courts and courses with which many of these candidates are familiar, tandem quests for leadership roles have been more subtly carried out, as both men’s pro tennis and golf have made major leadership announcements in the past few weeks, and the heads of women’s tennis and golf are likewise making headlines.

As tennis prepares to convene its first Grand Slam event of the year, the Australian Open in Melbourne, the PGA Tour looks forward to its return to the mainland U.S. next week with an event in the Southern California desert reinvigorated by a former U.S. President.

Our country’s club sports begin anew.

Wary Love Down Under

At Melbourne Park, the 128 entrants, respectively, in the men’s and women’s singles brackets look forward to vying for the tourney’s top prize—a $2.3 million winner’s purse, a new record for Slam prize monies. Things are more status quo on the sponsor’s side, with Kia Motors, Jacob’s Creek wines, Rolex, ANZ (ANZ:AU), IBM (IBM), and Virgin Australia (VAH:AU) returning for yet another summer’s turn around the hard courts.

Also broadcasting positive news in the weeks leading up to the event is Fila, which earlier this week announced it has signed world No. 7 Vera Zvonareva, previously under contract with K-Swiss (KSWS), and former world No. 1 Jelena Jankovic, now No. 14, formerly with Anta Sports. Fila will clothe both leading ladies at the Open, which is always tennis’s first major fashion show of the year in addition to being a mega sporting event.

Tennis Channel has also been on the receiving end of some good news. In late December, a Federal Communications Commission judge ruled in favor of the specialty sports channel in its long-standing program carriage complaint against Comcast (CMCSA). The ruling, as Broadcasting & Cable notes, “marks the first time a network has prevailed in a program carriage complaint against a cable operator, and it should mean a big boost in the number of cable [subscribers who] can get the channel.”

Comcast is now required to pay Tennis Channel $375,000 and is prohibited from discriminating against Tennis Channel by way of NBC Sports Network or Golf Channel, both affiliated with Comcast’s NBC Universal and both similar sports channels targeting similar audiences. The decision is still subject to review by the full FCC commission. “We’re preparing to add between 20 million and 23 million households,” Tennis Channel Chairman and Chief Executive Officer Ken Solomon told the New York Times.

After a six-month search, the ATP’s hunt for a new leader also concluded in the last week of 2011, with the announcement that 53-year-old Australian tennis executive Brad Drewett would replace Adam Helfant as ATP executive chairman and president, after Helfant announced in May that he would not pursue a new deal with the association after they failed to come to terms on a new contract.

The powerful ATP Players Council, led by tennis’s Big Three of Roger Federer, Rafael Nadal, and Novak Djokovic, was at first reluctant to get behind a tennis insider like Drewett, many players instead preferring former Wimbledon champion Richard Krajicek, who, as a former top-10 player, might better represent their interests (including shortening the ridiculously long pro tennis calendar). But after Federer threw his support behind Drewett, the tournament director of the Barclays ATP World Tour Finals got the job.

“He understands the global nature of the business as well as the complexities of dealing with all of the tour’s stakeholders,” Federer said of Drewett.

While Drewett is now on his honeymoon, WTA Chairwoman and CEO Stacey Allaster’s relationship with her tour seems to have settled into midterm equilibrium. The WTA Tour has seen an increase in sponsors, tournaments, prize money, attendance, and TV time under Allaster’s stewardship. But unlike the men’s tour, the women don’t have a set rotation of dominant, marketable players at the top of their game, nor a compelling rivalry like the ATP had in Federer-Nadal for so many years.

This isn’t Allaster’s fault—any more than Sony Ericsson ending its sponsorship of the WTA Tour at the end of the 2011 season, a move Sony Ericsson Public Relations Manager Graciela Pineda told the Associated Press “was a strategic decision based on the evolution of the business and the brand” after the six-year, $88 million deal had run its course. Allaster has secured more than $160 million in new and renewed deals over the past year and a half, including new agreements with BNP Paribas (BNP:FP) and Rolex and a just-announced new non-U.S. TV distribution deal with digital sports media company Perform for 2013-2016, which will more than double the revenues the tour brings in from international TV rights (currently thought to be around $10 million).

For the moment, the head of the fairer, fashion-forward tour is sitting pretty.

PGA Tour: Looking Healthy

The PGA Tour’s appointed and market-driven leaders, Commissioner Tim Finchem and golfer Tiger Woods, respectively, over the last month have signaled their intentions to stick around for a while.

On Jan. 11, Finchem was given a contract extension through June 2016 by the PGA Tour Policy Board. He became commissioner in 1994 and is just the third person to hold that position, according to the tour. Like Allaster, Finchem has overseen a period of substantial growth for his tour, including the debuts of the PGA Tour playoff—the FedEx Cup points contest—the World Golf Championships, and the First Tee youth development program, among other initiatives, as well as increased purses and sponsorship revenue through multiyear extensions with such golf sponsorship stalwarts as Rolex.

While the 2012 season has gotten off to an admittedly slow start, with only 28 golfers playing in last week’s Hyundai Tournament of Champions in Maui, Hawaii, tying the smallest field ever to tee off at Kapalua Resort, the return to the mainland and the start of the West Coast Swing next week will surely pick up the pace. Kicking things off in California is the newly retooled Humana Challenge, formerly known as the Bob Hope Classic, which thanks to the involvement of former U.S. President Bill Clinton and other luminaries is presenting a fresher, healthier face to the world.

Clinton, now a slimmed-down vegetarian, has gradually embraced über-healthy living after a series of heart operations and other health setbacks over the past two decades. Through his Clinton Foundation and partnership with global health concern Humana (HUM), Clinton has an eight-year agreement to sponsor the La Quinta (Calif.) tournament. New at this year’s event are such health-centric attractions as a “Health Matters” conference preceding the golf tournament, morning workouts led by celebrity trainer Jillian Michaels, and booths where spectators can pick up pedometers and get their blood pressure checked. The event has also attracted a handful of golfers who have bypassed it in recent years, including Phil Mickelson.

As the 2012 season continues to unfold, the major issue on golf writers’ minds is whether the American pros, led by Woods, will mount a better challenge to the so-called “European surge.” Without having won a major, England’s Luke Donald now claims the world No. 1 spot in golf, with countryman Lee Westwood and Northern Ireland phenom Rory McIlroy right behind. Although McIlroy is arguably golf’s hottest young star right now, with a solid following in the U.S. (which looks to increase even further after his commitment to rejoin the PGA Tour and play more events in the States this year), the casual fan at home who tuned into tournaments just to see Woods on Sunday is still on the sidelines, frustrating the tour’s broadcast partners and sponsors. After Woods’s first victory in December after a lull of almost two years, golf and media brass are hoping that Tiger, who tees off his 2012 season at Pebble Beach on Feb. 9, will come roaring back.

And in a move that Finchem’s team hopes is not a sign of things to come, one promising young American golfer is bypassing the PGA Tour and going straight to Europe. Peter Uihlein, the 2010 U.S. Amateur champion and winner of the 2011 Hogan Award given to America’s top college golfer, has signed with super agent Chubby Chandler and is making his pro debut this month at the European Tour’s Abu Dhabi HSBC Golf Championship. According to Golfweek, Acushnet CEO Wally Uihlein, Peter’s father, “has been a strong advocate of young players broadening their horizons and testing their games on the worldwide stage, especially through the European Tour.” Beginning in Abu Dhabi, Uihlein can receive seven sponsor’s exemptions in Europe, as well as the same amount of starts, should he choose to exercise them, in the U.S.

Finally, not to be forgotten, the LPGA under Commissioner Michael Whan is looking much more robust this year than in 2011, after Whan has boosted the total number of tournaments on the worldwide women’s golf tour from 23 to 27 and the number of domestic events from 13 to 15. Total prize money for 2012 will increase from $40.4 million to $47 million. “We’re going in the right direction,” Whan told Golf Channel, “and the best news is that I don’t think we are done yet.”

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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