Men’s tennis tour in talks with Saudi wealth fund about joint investments

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The top men’s tennis tour is holding talks with Saudi Arabia’s sovereign wealth fund about possible co-investments, as the kingdom’s oil-funded capital continues to reshape the business of sport.

ATP Tour chair Andrea Gaudenzi said he had held “positive” discussions with the Public Investment Fund and other potential investors to back various sports projects and ventures, including infrastructure, technology investment and events in new markets.

Speaking just weeks after the US PGA Tour ended its resistance and reached a deal to work with the PIF which took the golf world by surprise, Gaudenzi however warned that outside investors must “stick to respecting the history of the sport and the product, working with the current stakeholder rather than against”.

“You have to preserve something which is almost sacred, the rules of the game,” Gaudenzi told the Financial Times in an interview to mark his re-election as chair of the ATP Tour for another three years. “This is not a video game, this is not a movie.”

The Italian’s comments show the delicate balance sports groups must strike as they seek outside investors to help them grow and develop their media and entertainment revenues.

The PGA Tour and PIF tie-up ended a costly battle, where the sovereign wealth fund had set up a rival breakaway tour, LIV Golf.

The ATP chair said the tie-up showed that PIF and the PGA Tour had agreed that they would be better off together. “If you’re a golf fan you want to see the top players playing against each other,” Gaudenzi said. “You want one ranking and you want one simple story.”

Private equity groups and sovereign wealth funds have been pouring money into sport as investors increasingly recognise the sector as an asset class in its own right.

CVC Capital Partners last year partnered with the Women’s Tennis Association, investing $150mn for a 20 per cent stake in a new commercial venture between the two groups.

However, the ATP Tour’s own talks with CVC have not been converted into a deal. The ATP “don’t need cash and need to be careful with dilution”, Gaudenzi said. However, he said there were opportunities to collaborate with outside investors, in a range of areas, such as media production, data collection and technology.

“There’s many ways to become an investor of the ecosystem. It’s not only about creating a new tour or buying a tournament,” he said.

US-headquartered ATP Tour Inc’s revenues have recovered since falling to a low of $93mn in 2020, a season disrupted by the coronavirus pandemic. The governing body’s gross revenues totalled $250mn in 2022, up from $176mn the previous year. In 2019, its gross revenues totalled $159mn.

The Tour increased player prize money and bonus pools to $218mn in 2023, up from $180mn last year, its largest-ever annual increase.

Gaudenzi said outside investment firms can help sports to speed up innovation and with investing in new technologies, but warned against a “complete break it apart, disrupt it” approach.

Professional tennis bears similarities to golf because players are typically self-employed members of the tours.

The four majors, known as Grand Slams, are run separately from the ATP, WTA and the International Tennis Federation, which acts as the world governing body of tennis and runs flagship events including the Davis Cup and Billie Jean King Cup.

Gaudenzi is an advocate of reducing fragmentation in tennis, a sport with complex and disparate governance and business models.

He has also sought to emulate Drive to Survive, the Netflix series that helped to catapult Formula One car racing into the mainstream. ATP, WTA and the four Grand Slams paired up with the streaming company to create Break Point, which reached Netflix’s top 10 in 28 countries.

“You need one story,” he said, adding: “Ultimately, you want to see the top players playing in the best events in the world. The more you fragment and divide, the more you create confusion.”

PIF did not immediately respond to a request for comment.