The Rally: Big Doings in the Desert

The Rally returns today, as freelance tennis writer Kamakshi Tandon and I take closer look at the current dispute over prize money that's roiling Indian Wells and the world of pro tennis.

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Kamakshi,

From Rafa’s return to Vika’s breather, we’ve already had our share of news in tennis in 2013. Compared to those two stories, the Indian Wells Prize Money Saga is pretty obscure—OK, totally obscure—but it does reveal some of the conflicts going on in the game right now.

To summarize for our readers who may not follow all of the sport’s backstage dramas, the tournament at Indian Wells offered to increase prize money significantly in 2013, something that the players, and especially the men, have been calling for at all major events. So it came as a shock that the ATP’s board failed to approve the change. The board consists of three player representatives, all of whom voted for the pay raise; and three tournament-director representatives, all of whom voted against it. The reason, according to Indian Wells director Raymond Moore, is that the other tournaments don’t want IW, which is owned by billionaire Larry Ellison, to “out-distance” them in prize money.

I think Andy Roddick summed up the tennis world’s general response to the tournament directors’ stance when he called it, “The stupidest thing I’ve ever heard.”

Do you agree, Kamakshi? I know there’s a counter-argument to be made in there somewhere, but so far the players’ side seems the more persuasive. No one objected last year when Indian Wells made another increase, aimed mostly at the later rounds. And the WTA has approved their side of the pay raise for this year. I'd say we should be encouraging people like Ellison, and his money, to get involved in tennis. Is the men’s tour shooting itself in the foot, or is IMG, which owns Indian Wells’s rival event in Key Biscayne, exerting influence here?

Finally, it’s interesting that this story surfaced in the same week that the only other professional men’s event left in California, the SAP Open in San Jose, was staging its swan song. Shouldn’t tennis be trying to build the sport in California, where there are fans and an infrastructure, as much as it does Asia, where neither of those things exist in abundance? You only have to see all of the people who make the trek from other parts of the state to Palm Springs each March to know that there’s still a lot of interest in the game there.

Hi Steve,

Hey, totally obscure is right up my alley. Which probably explains a lot.

You already know how much I like Indian Wells, and in many ways I'd point to it as a model for growing the game the way you suggest. That's why I'm astounded both by this snow job and the apparently unquestioned acceptance it's received in the game. This isn't about what Indian Wells wants to give, it's about what it wants to get. It's not about money, it's about control.

The players' reaction is totally understandable. They think they should be getting more anyway, and naturally see this as a tournament finally waking up and starting to give them what they're worth. Like Ryan Harrison said, “If someone hands you free money, why not take it?” OK, but first I’d be sure want to ask why they were handing it out. There might be good reasons for an increase, but the way it's being done also needs to be examined.

The prize money offer isn't simply a gesture of benevolence. It's about the tournament wanting to get bigger, better, and more important—nothing wrong with that, you might say, only it’s not quite playing on the same field as everyone else.

It was just a few years ago that Indian Wells was on the verge of being packed up and sold somewhere overseas to the highest bidder, someone with deep pockets, able to pay over the going amount thanks to backing from a government looking to acquire a status symbol.

Not long after, Larry Ellison stepped in, put down $100 million and bought the tournament, making sure it would stay put. Suddenly, not only was the future of Indian Wells secure, but it had no loans to pay off and all of its profits to keep. Ironically, it was now in a position to impose on other tournaments the same kind of distorted economics it once faced.

It looks like that might be starting to happen. After 2011, the tournament decided to increase prize money, but mostly from the quarterfinals onwards. It gave the champions $1 million each, compared to the $640,000-$700,000 players get for winning one of the other Masters. This distribution was apparently at Ellison's insistence—he wanted to reward winners. Plus, he said, “I think it’s symbolic, in that we’re trying to be the best Masters 1000,” he told the New York Times.

Now the tournament wants to increase again by a similar amount, but concentrate on giving more to players who lose in the first three rounds. I’m not sure whether the organizers are reading the political winds; early-round prize money has been the big issue in the Grand Slam negotiations. It would restore the balance, but there’s a larger issue here, which is about who gets to decide how much a tournament can pay.

It’s great that Indian Wells has this money and wants to share it with the players, but there’s a reason the Masters events are set up as as equals—similar prize money (some adjustments for length and currency), the same points, and mandatory entry. That means they don’t have to pay guarantees, which is huge, because it means the cash that would otherwise be thrown at the top players can instead go to prize money and tour payments. On top of that, it creates a series of identifiable events with consistent fields between the Grand Slams.

Generally, the feeling seems to be that this has worked out well. Do we really want to start messing with the Masters? Because if each tournament starts setting its own amounts, there's going to be competition to see who can provide the most and they might no longer be equal. That might get the players’ prize-money increases to begin with, but could also lead to guarantees returning at this level, and tournaments folding or dropping back to a lower level. And that would mean less money for the average player. Eventually, if there’s a big disparity, players would probably want this reflected in ranking points.

I'm not privy to the exact financial situation of the Masters events, but I suspect that a few others like Miami, (state-supported) Shanghai, (also billionaire-backed) Madrid, and maybe Cincinnati could offer more while others are limited in how much they can stretch. Perhaps a restructuring makes sense, but this is something that needs to be discussed and not rammed through by one tournament.

That's what the ATP is for, right? They’ve made some mistakes here, and in my opinion the first one was accepting the original prize money increase. Ellison and Indian Wells shouldn’t have been given control of how the amounts were divided, and it's now hard for the organization to object to the current increase on distribution grounds given that they accepted changing it the last time around. It happened very quietly last year and I was surprised there wasn't more talk about it, including from the lower-ranked players who got cut out of the deal. The other ATP mistake was, as usual, letting themselves get used as a punching bag rather than clearly and articulately communicating their position and the issues involved.

As you pointed out, the key phrase here is that Indian Wells would “out-distance” the other Masters. I don't think there's much question that's the goal. The question is, do we want them to do that, and do we say they have the power to do that? One revealing thing about the offer is the condition that if this year's increase isn't accepted, the tournament will go back to 2011 prize levels. “We’ve folded our tent... If they vote against it we are going to the minimum requirement, and the players are going to lose big time,” says Moore. I don't see much willingness to compromise or concern for the players in that.

Kamakshi,

I wanted a counterargument, and it looks like I came to the right place.

I’m mostly in agreement with your assessment of the situation, and Indian Wells’ ambitions. Moore made some comments in the Palm Springs Desert Sun recently about how, since the Ellison era began, money is never an issue for him, profits are being reinvested for future development and expansion, and that he feels like a kid in a toy store when it comes to making the event bigger and better. His words reminded me of the way Brian Cashman, general manager of baseball’s financial colossus, the New York Yankees, described what it was like to work under George Steinbrenner. If Cashman wanted to sign a player, he signed him, no salary questions asked.

Indian Wells, in this formulation, wants to be the Yankees of Masters events; you might say that that other tennis billionaire, Ion Tiriac, wants to turn his own dual-gender Masters event, in Madrid, into Manchester United.

The question for us, and especially for the players and the ATP board, becomes: Is this good for the Masters structure, and for tennis as a whole? You’re right to preach caution. The Masters, and their forced equality, has been an indisputable success over the last 20 years, and has helped lead to the era we’re in now. It has been a rare case where some degree of unity has been achieved in tennis, and we’ve seen the results. In that light, the ATP board’s caution about accepting this pay increase becomes more understandable. We’ve seen how Tiriac, Ellison’s European alter ego, has rearranged the clay season to suit himself and his event, and we know how his hubristic blue clay experiment worked out last year.

At the same time, looking back, I think blue clay would have been a terrific innovation if it had been done properly. I’m not even sure the biggest problem was the slipperiness of the surface; it was, first of all, not getting the top players on board beforehand. Maybe it was never going to be possible, but Tiriac obviously didn’t build a rapport with Nadal or Djokovic or others.

That’s something Ellison has certainly tried to do. You’re right that the money Indian Wells is offering the players now is probably not “free,” but as we saw with Tiriac last year, trust between owner and players can be a good and useful thing. I guess I’m a little more willing to believe that the rise of Indian Wells could be a positive development. Coming at the same time that California is losing events in Los Angeles and San Jose, in a state where the sport has always been popular, a big influx of money and marketing and development should, in theory, be welcomed—cautiously, as you say, and with due diligence.

Ellison has done well by the event so far. Hawk-Eye on every court, or at least every court that can be televised, should be the standard at the Grand Slams, not just in Indian Wells. He’s been an enthusiastic presence in the stands. And he’s learned one lesson well—don’t annoy Rafa. Last year, Nadal and his entourage stayed at Ellison’s place during the event, and Ellison even mingled with the masses on Court 2 long enough to watch one of his doubles matches. I wrote last year that I’d personally like to see Ellison get more deeply involved in the game by starting a big-money invitational doubles event featuring the top singles players. (Having them play dubs in Indian Wells each year has added a lot of energy to the grounds.) And as someone who has always liked the idea of a fifth Grand Slam, I’m not necessarily scared of what he might turn his event into in the long run.

As I said, Kamakshi, you’re right to recommend that the ATP do its homework here. But I do think that as long as guarantees don’t come back into play at this level (people should never forget that they once nearly destroyed the game), as long as all of the Masters remain mandatory, and as long as the top players need to come to them to get their ranking points, I don’t see an immediate danger in Indian Wells’ expansion—perhaps I’m being too hopeful.

On a side note, do you also think that this is as much a war between Indian Wells and IMG, as it is Indian Wells and the ATP? The event most likely to suffer in comparison to a supersized IW is the IMG-owned event in Key Biscayne.

Steve,

If a tournament is going to push the envelope, I’d definitely rather it be Indian Wells. Getting Ellison's investment was good fortune, but on an ongoing basis, its financial strength is derived from exactly the right things—strong attendance, big draw, good facilities, lots of revenue. That’s much better than a tournament which can buy status but can’t fill the stands. I'm not saying that people shouldn’t try to build new tournaments in new places—that’s important, and hey, it’s how Indian Wells started—only that it's important to also build sustainability in the form of spectator and sponsor support. There are Challengers in South and North America that draw more people than some tour events. (On this note, I’m interested to see if Dubai is offering free grounds entry this year.)

However it got there, Indian Wells is now in a different financial situation from most other tournaments, and whether that turns out to be good or bad—and for whom—depends on how it uses that position.

It seems to be implict that it’s a good thing for Ellison and his money to get involved in tennis, but have you been following the America's Cup recently? For the past six years, it s been caught up in the battle between his Oracle team and another billionaire operation, Alinghi, that seemed set to destroy this venerable old competition at times—egos, lawsuits, disputes over sailing vessels and locations, spying, capsized boats, not to mention the spending of hundreds of millions of dollars that threatened to drive everyone else out altogether.

This was far from being mostly Ellison’s fault, as far as I can tell, and it’s not like the race hasn’t seen this sort of behavior in the past. Overall, he seems well-meaning—this year’s race is supposed to launch the competition as a TV-friendly event, with giant 72-foot vessels and hi-tech imagery. But it’s very different from before, and while I don’t know much about sailing, from afar the reaction seems mixed. “It used to be a game of chess. Chess on the water. Now it’s more like watching a car race,” was how one fan described it. I think he was trying to say that was a good thing, but it doesn’t sound like he was quite convinced himself.

It’s clear Ellison really likes tennis; anyone who recalls a Laver-Rosewall match with enthusiasm is welcome, with or without money. Like you said, he even likes doubles and thinks it can sell (so how come the tournament's opposition to an 80-20 split?). But it's good to look carefully at what you might be getting into.

Look at how the tournament has reacted to the ATP board’s decision. “It’s totally anti-competitive,” Moore said. That sounds like lawsuit talk. The reaction to that claim might be: Predatory pricing is, too. Claim and counter-claim is the kind of situation I don't think we want in tennis.

It's interesting that IMG has come up so often. Moore said that of the three tournament reps, the IMG vote seems the most sympathetic to the Indian Wells offer, but this is surprising. It owns the Miami tournament, which comes right after and, as you said, stands to get hurt the most by Indian Wells' muscle flexing. So the general assumption that IMG is protecting its interests by blocking the move is probably the right one.

All I’ll say is that given that IMG was a driving force behind the attempt to sell off Indian Wells in the first place, they might deserve everything they’re getting right now.

If you're still reading (seriously, you're still reading?), it’s worth mentioning that Indian Wells isn’t just using its resources to increase prize money. It's building a new stadium, adding to its facilities, and wants to hit 500,000 annual attendance in a few years, more than either the French Open or Wimbledon currently draw.

As a tennis fan, it’s nice to see this kind of effort to make a tournament better. But it’s another thing other tournaments are going to find hard to match. Miami is trying to do a $50 million upgrade, but its location in Crandon Park makes it difficult—it won a vote to allow the expansion in November, but then was sued over the proposed development. The French Open has just run into more opposition over its expansion plans as well.

Meanwhile, Indian Wells owns the land around its site, thanks also to Ellison, and that means a lot of room for expansion. “I don’t want people to get the wrong impression. Mr. Ellison doesn’t allow us access to his checkbook,” Moore said in that conversation with the Desert Sun that you mentioned. “The financial structure is different for us now. Prior to Larry becoming the owner, the owners were looking for a return in their investment every year.

“He's looking for a return in asset value... In terms of dollar for dollar, he’s allowed Steve Simon and myself...to reinvest the profits from the event. Before we were distributing profits...now I don’t need to do that.

“Which is why I can offer $1.6 million dollars in prize money. Steve Simon, myself and some of other staff, we’re like kids in a toyshop. ‘What can we do now?’ We are doing things which we only dreamed of before.”

Sounds nice. I just hope there’s room for the rest to play, too.