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Upon his first visit to Dubai, in 1992, Larry Scott took a little convincing. “They pointed to a patch of sand, and told me that they were going to build a beautiful tennis stadium there,” he laughs. “I must admit I didn’t believe them at first.”
A year later, Scott brought the men’s ATP Tour to the Middle East for the first time, and this year he returns as the CEO of the women’s tour — an organisation whose own dramatic comeback matches that of any on-court legend.
The Sony Ericsson WTA Tour, to give its full title, is the world’s premier professional sport for women. This year more than 1400 players representing 75 nations are competing for over US$62m in prize money at 62 events in 35 countries. Over four million tennis enthusiasts will flood through the turnstiles at venues from Auckland to Madrid, and hundreds of millions more will watch the players battle it out from the comfort of their living rooms.
Yet step back to 2003, and the picture was far less encouraging. The WTA was running at a loss, and was projected to end the year in negative reserves. The stark financial situation meant that while women’s tennis appeared in rude health on the court, the business side of the operation was close to collapse.
”Essentially the organisation really had not been performing at a level the members were happy with on a few different fronts,” explains Scott.
“There were political challenges, organisational challenges, marketing challenges, and significant revenue challenges,” he continues. “The sport itself was growing in popularity and there were some very exciting personalities, but the organisation wasn’t structured politically, and the overall execution wasn’t monetising to the level people thought it should be.”
Some of these “people” included the players themselves, who voiced their frustration after losing confidence in the flagging organisation.
“The things I heard from Lindsay Davenport and Serena Williams when I first started were that they were so disappointed that as popular as women’s tennis seemed to be, they weren’t doing better,” remembers Scott. “We didn’t have sponsors, attendances weren’t growing, we weren’t increasing TV exposure, and crucially we didn’t have a title sponsor — these were all psychological things that were weighing on the players.”
To Scott’s advantage, he brought with him 13 years’ experience on the men’s ATP Tour, including nine years as COO.
“I went in with my eyes wide open — the product itself was not only sound, but very, very healthy, and it was just a question of getting the business side of the house in order,” he insists.
At the time, the men’s tour was far larger, and more mature in terms of its business cycle. It had much stronger sponsorship support, and the governance structure was “more stable, less political, and with less micro-management”, according to Scott, who immediately began to carry ‘best practice’ solutions across the gender gap.
“From a governance standpoint, we made some changes to our board structure as the board was too involved in operational details, and didn’t understand their role in terms of strategic direction,” he explains.
“We brought in a Harvard Business School professor to consult with the board and bring best practices,” continues Scott. “We also formed an outside advisory board, where we brought in some world-class outside business people.
“Like a lot of sports organisations, we’re constituency-based. Our board has tremendous expertise in the workings of tennis and the tennis tour, but none of them come from the outside business world or sit on other boards, to bring that type of perspective that you’d like to have,” he adds.
The WTA Tour Global Advisory Council certainly delivered on its premise of attracting world-class business people. Virgin Group chairman Richard Branson took up the challenge, as did Goldman Sachs’s former managing director, the last chairman of NASDAQ, and the former worldwide head of marketing for Visa, among others.
“The calibre of advice and counsel coming through the board and the advisory board got a lot better overnight when those changes were made,” admits Scott, who also busied himself with securing headline and regional sponsors.
Key to the shift was changing the culture among the players. In an individual sport such as tennis — full of superstars that can often be surrounded by their agents and support teams — some players can fail to recognise their own role within the marketing machine. From the point of view of potential sponsors, the return on their investment is significantly diminished if the tour’s prize assets appear disinterested or distant.
“One of the things I wanted to make sure of early on was that the interests and the focus of the players on the tour were very well aligned,” explains Scott. “Most important was giving them a sense of ownership — that marketing wasn’t just something the tour did, but they had to be involved and we had to work as a team.”
He called a meeting of the world’s top 20 players at the Wimbledon Championships in summer 2003 and warned the players that they were about to be pushed out of their comfort zones, and firmly into the media and marketing spotlight.
“That was part of a cultural shift — it might have been a little uncomfortable at first, but not only did the players get more confidence and pride in their organisation, they found themselves doing a lot more,” says Scott. “They’re the stars of the show, at the end of the day, and they stepped up.”
The players learned quickly, apparently accepting that such tasks were part of modern sport, and that the professional game would perhaps have taken a significant step back had they not played their part off the court.
“As professional athletes we’re used to doing these things for our sponsors, and they are a big part of who we are today,” shrugs Sania Mirza, the 20 year-old rising star of the WTA Tour. “It’s our duty to be there for sponsors, and as long as it’s not affecting our tennis negatively, then we’re very happy to do promotions.”
Mirza is no stranger to off-court pressure, either. Already the highest ever ranked female tennis player from India, she is now one of her country’s most popular sporting figures, and a firm favourite with marketing executives on the subcontinent and beyond. Nevertheless, she professes a genuine appreciation of the necessity to support the tour in its marketing operations.
“It all goes hand in hand and there’s not much you can do,” she says nonchalantly. “To be where we are today, and to have these kind of tournaments, we need sponsors, and I think we owe them back in return. This is how we give them back.”
Such an approach has reaped significant dividends — in 2005 Sony Ericsson became the Tour’s worldwide title sponsor in a landmark US$88m six-year deal, the largest and most comprehensive sponsorship in the history of tennis and of women’s professional sport.
“Sponsorship revenues have grown fivefold since 2003,” reveals Scott. “We now have title sponsors, as well as very prestigious others like Dubai Duty Free and Whirlpool, and the players are far more involved in this than they used to be in terms of their contribution.
“Global sponsorship revenues were US$4.3m in 2003, and they’re going to be at about US$19m this year,” he continues. “Overall revenue growth is up 74% from 2003 to 2006, and last year we signed the biggest television deal that we’ve ever had, with Eurosport and with Regency Enterprises. There is more TV exposure, and therefore more TV revenue, coming in now than has ever come through before.”
In addition to the massive increase in sponsorship revenues, there has been a another multiplier effect in terms of the advertising and promotion that flows from the initial deals.
“When sponsors make these kinds of investments, they sometimes spend multiples around their rights fee in leverage, and advertising and promoting it,” explains Scott. “Last year we hit a milestone — there was over US$50m spent by our sponsors advertising the tour and its players. Sony Ericsson spent over US$30m on media for just one global TV ad featuring two of our players, and featuring a flash of our logo at the end. So there’s a lot of marketing and promoting that happens through our partners.”
Having secured the future of the tour, Scott and his team are now looking to “unlock the next level of value and bring women’s tennis to yet another level”, primarily though a series of structural changes to the calendar and the way the circuit is organised.
“Women’s tennis is already the leading women’s sport in the world, in terms of revenues and in terms of total eyeballs,” says Scott. “But there’s a lot more that we can achieve. In the ranks of sports in general, I still don’t feel like women’s tennis is getting its fair share.”
This ‘fair share’ will necessitate players embracing ever more marketing opportunities, while the tour itself will be streamlined to give players more time off and help protect them from injury.
“We certainly have the potential, in terms of competitiveness as well as a number of personalities that are interesting not just to a tennis audience, but transcend that and appear in fashion magazines and social or lifestyle magazines,” explains Scott.
“We’re the leading global sport for women, and the power of our players as icons — social icons, cultural icons, fashion icons — is very palpable,” he continues. “As women around the world gain more equality, more empowerment, and more economic independence, they become a greater force as well from a market perspective, as consumers.
“In many ways we are ahead of our time, and positioning ourselves in these developing markets where women, as a force, are on the rise, is important," he adds. “Sania Mirza and some of the other players represent so much aspiration, in terms of what they mean to women.”
If the marketing men are happy, then at least so too are the players.
“There have been a lot of changes, particularly to prevent players picking up so many injuries and make them healthier,” enthuses Mirza.
“Anything that protects the players is great for the tour, while at the same time they have done a great job marketing and making it such a big sport around the world,” she continues. “At this point, I’m pretty happy with what the tour is doing.”
Russia’s Maria Sharapova, ranked number one tennis player in the world and the highest-earning female athlete at the end of 2006, has managed to attract a long list of sponsors including big names like Nokia, Canon, Motorola, Nike, Tropicana, Tag Heuer and Land Rover. After beating Justine Henin-Hardenne in the 2006 US Open and Serena Williams in the final at Wimbledon, sponsors lined-up to sign deals with the tennis star. Forbes magazine listed the player as the highest paid female athlete in the world in 2005 and said her earnings reached US$18m a year. However, Sharapova is believed to earn over US$26m a year, of which more than 90% comes from sponsorship arrangements. Corporate deals aside, Sharapova’s career prize money amounts to over US$9m.
Martina Hingis of Switzerland, who gained a reputation as a child prodigy and whose career took off in 1994, has signed sponsorship deals with Yonex and Adidas for clothing and equipment, while other sponsors include names like Omega and Opel. Hingis, who announced her retirement from the sport in 2003, attempted a comeback in 2005 participating in an event in Thailand, but lost to Germany’s Marlene Weingartner in the first round.
The player, however, had a more fruitful comeback in 2006 at a low-key tournament in Australia after which she climbed to number six in the global rankings, won three titles and qualified for the 2006 WTA Tour Championships that took place in Madrid. She currently plays in the Sony Ericsson women’s WTA Tour and has accumulated over US$19.9m prize money throughout her glittering tennis career.
Serena Williams has also made her share of prize money with US$13m in earnings. However, this doesn’t even come close to her sponsorship deals.
In 1998, Williams signed a deal with Puma worth US$12m, which expired last year, and currently has a sponsorship agreement with Nike worth US$55m for five years. Williams also has deals with Wilson and McDonald’s.
By Tamara Walid
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