Professional tennis is not immune to the economic crisis that has decimated the financial services and auto industries over the past year.
“This is my fourth or fifth serious financial market crash since I started playing on the WTA Tour [in 1978],” Pam Shriver said recently. “There is always an effect, mostly on the sponsorship side. Companies have to cut when they look at their budgets.”
Shriver, now a television commentator and a minority owner of the Baltimore Orioles, said that because sponsorships for her annual charity event, the PNC Tennis Classic, have slipped, “we have to rely on individual ticket sales to be a lifeline.” The 23rd edition of the Classic, which will feature a match between Serena Williams and Elena Dementieva, is scheduled for Nov. 21 in Baltimore.
American International Group, the world’s largest insurance company, is the most notable financial services company to retreat from its involvement with pro tennis. AIG, the U.S. Davis Cup team’s primary sponsor since 1999, will end that relationship when its contract expires at the end of the year.
“Among key sponsors, financial service companies are the hardest hit,” said Marc Ganis, president of Sportscorp, a sports business consulting firm based in Chicago.
But not all of tennis’ supporters in the beleaguered banking industry are suffering. JPMorgan Chase, a top sponsor of the U.S. Open, has emerged as the healthiest large bank in the U.S., while BNP Paribas, title sponsor of Davis Cup, earned 1.5 billion euros (about $1.95 billion) in the second quarter. Although that figure represents a 34 percent decrease from the same period a year ago, it leaves the French bank with enough money to continue its support of Davis Cup.
“Companies still have to advertise,” said USTA board member John Korff. “My feeling is that this will affect things at the margin. JPMorgan Chase is locked into a multi-year deal with the Open.”
Signing a new deal in the current climate could be difficult for tournaments lacking a title sponsor, such as the ATP’s Indianapolis event. But bargains are available for the businesses that do want to net some tennis business, said Korff, director of a Mahwah, N.J. women’s event from 1977 to 2001.
“Smart companies will realize that now is a good time to buy,” he said.
As with everything in tennis, sponsorship in the current economic climate is an issue of timing. Last summer the Outback Champions senior tour, co-owned by Jim Courier, was able to consummate deals for new events next year in Rio de Janeiro and Los Cabos, Mexico.
Those agreements came in August, shortly before the financial crisis surfaced in Latin America. It’s unlikely the region will host other new tennis events anytime soon.
But while tournament directors are feeling the pinch, top players are unlikely to experience a decline in prize money. Experts say the tours, which must approve reductions, will be reluctant to alienate their players, although amenities like food allowances will probably shrink.
Tournament directors must ensure ticket prices remain affordable for fans. The ATP event in Delray Beach, Fla., has left prices unchanged for 2009 despite the fact that tournament prize money will rise 14 percent, to $500,000 from $437,000 last year.
“We’re trying not to gouge people,” says John Butler, the event’s executive director. Delray Beach prices range from $15 for a general admission ticket early in the week to $250 for a courtside seat at the final.
Even as their retirement accounts shrink, many fans are determined to maintain a lifestyle that includes live tennis spectating. Gail Goldman, a sales executive for a telecommunications company, travels from her Philadelphia area home each year to watch the U.S. Open in New York and the Sony Ericsson Open in Key Biscayne, Fla.
“As long as I don’t lose my job, I’m absolutely not going to cut back,” she says. In fact, Goldman plans to attend Wimbledon in 2009.
“When there are difficult times in the economy, I need more time to relieve stress,” she said. “So I will play and watch more.”
London resident Rick Hanreck, who owns a small apparel company, goes to Key Biscayne, Wimbledon and London’s Stella Artois Championships every year. Sometimes he makes it to Roland Garros and the U.S. Open as well.
Hanreck prefers to downgrade the quality of his tennis-watching vacations rather than forego them altogether.
“You go for lower priced tickets, stay at a cheaper hotel and eat in brasseries rather than Michelin-starred restaurants,” he said, adding that Americans traveling to tournaments in Europe will benefit from the dollar’s recent rise.
To be sure, some fans will have to curb travel plans. Bruce Allen, a marketing professor at Central Michigan University, was contemplating a visit to Wimbledon next year. The recession has squashed that idea. It also prevents him from attending the U.S. Open.
“I’d like to retire, but the economy and stock market force me to keep working, and school’s in session during the Open,” he explained.
And while tournament directors and fans are forced to adjust to the new economic reality, the recession could end up benefitting broadcasters like the Tennis Channel.
“People who don’t have the income to go to stadiums will watch from home,” says Phil de Picciotto, president of Octagon sports agency. “So TV viewership can increase.”
Tennis Channel commentator Leif Shiras calls his medium “the last resort” for entertainment.
“Someone may not be able to fly to Indian Wells, Indianapolis or India,” he said. “But at least they can watch on TV.”