A New Partner: The WTA Embraces Private Equity
It’s been a tumultuous few years for the WTA, the professional women’s tennis tour. Like its counterpart, the ATP, COVID-19 played havoc with its schedule, postponing or canceling outright a raft of events. And while no women’s players stood out for their refusal to be vaccinated against the virus, as Novak Djokovic has done, other issues have cropped up in the recent past. Wimbledon refusing to admit players from Russia or Belarus, and concerns over Chinese player Peng Shuai’s well-being in the wake of her having accused a senior government official of sexual assault are chief among those, but they are not the only obstacles.
The WTA has also been rocked by the retirement or loss of form on the part of some of its top players, most notably Serena Williams, but also Ashleigh Barty and Naomi Osaka, each of whom have won multiple majors. Younger players like Coco Gauff and world No. 1 Iga Swiatek have done much to make up for the losses of the aforementioned trio, but for all of their on-court talent, they are still early in their careers and as yet lack the commercial potential necessary to be true superstars.
This dip in the overall marketing power of the tour has been exacerbated by a lack of income as the tour has moved several tournaments, including the year-end Tour Finals, away from China. The move, according to Steve Simon, the WTA’s chief executive, comes from what it calls a failing in transparency on the part of the Chinese government over the Peng Shaui affair.
Closing the gap
But just as things seemed at a low ebb for the WTA, it announced Tuesday that it had entered into a commercial agreement with CVC Capital Partners. A former owner of Formula 1, CVC is based in Luxembourg, and has a diverse portfolio in sport, with holdings that include a share of La Liga’s commercial operations, the Indian cricket club Ahmedabad and a stake in the Six Nations Rugby series.
CVC’s agreement sees it become a commercial partner with a $150 million investment that gives CVC a 20 percent stake in a new commercial subsidiary named WTA Ventures. The subsidiary will focus on generating revenue by managing, for example, sponsorship sales as well as broadcasting and data rights, with a focus on further engaging and growing the WTA’s fanbase. In a commercial sense, the WTA also expressed hopes that the gap in prize money between the men’s and women’s tours can be narrowed, a differential which has widened in recent years.
A new approach
Said Simon, “This partnership with CVC brings experience, a network and capital to move our sport to the next level, embracing the ambition of our founding members, urging women’s tennis beyond its barriers and pioneering new standards for a more equitable and valuable sport.”
Tennis has had a rocky road with outside investment, as a deal between the ATP and ISL, a Swiss group, was forced to end prematurely, while the relationship between Gerard Piqué’s Kosmos and the Davis Cup has also gone awry. But while those relationships smacked of being over-eager in their ambitions, the WTA has a strong sense of history upon which to draw. I also has an impressive cadre of young players who are finding their way in the game and could well become the superstars of tomorrow. If this development curve goes as the WTA and CVC anticipate, in a few years’ time, it could look like money well spent on the part of both the tour and the investment group.