By pouring $150 million, CVC Capital Partners, the former owner of Formula One racing, will take a 20% stake in a commercial company called WTA Ventures. The company functions to generate revenue by expanding marketing for tournaments and events, attracting sponsorships, and selling broadcast rights and data.
Steve Simon, president and chief executive officer of WTA, is optimistic about the investment coming from a global trading partner and high-profile sports investor. The partnership between WTA and CVC promises to bring more money to the tournament, increase the amount of prize money for players and create great attraction.
The prize money is the basic factor that makes female players turn away from the WTA. Although the prize money for male and female athletes in the four Grand Slam tournaments is the same, the gap in prize money in many independent men’s and women’s events has widened in recent years.
In 2022, the world saw a record gap when a male tennis player earned an average of 70% more than his female counterpart. Last year, at the ATP Finals, the men’s season-ending championship, spent $14.75 million on the prize, while the women’s prize was just $5 million.
In addition, WTA has lost significant revenue due to a lack of tournaments held in China, where WTA has signed a lucrative 10-year contract to host the WTA Finals in Shenzhen to receive 14 million USD in prize money only in the first year, counting from 2019.
However, host China canceled most professional sports events since the start of the COVID-19 pandemic in 2020. The WTA also later suspended all tournaments held in China. China at the end of 2021 because of allegations of sexual assault by Peng Shuai, a former Chinese tennis player who is still missing after reporting.
The WTA has stated it will not restore tournaments in China until they can contact Peng directly and a full and transparent investigation is conducted by the Chinese authorities into her allegations. However, none of the WTA’s requirements were met and they were forced to look for new partners.
Now, with a partnership with CVC, Mr. Simon hopes this financing will allow the league to invest more in marketing for women’s tennis as well as in the production and operation of media programs that help promote women’s tennis. enhance the value of athletes and tournaments.
“Branding and direct consumer outreach are some of the key things that I think we have to do better than we are doing now to enhance commercial results. When the commercial results are better, it will be a lot easier to raise the prize money for athletes,” Simon said at Indian Wells, where the BNP Paribas Open kicks off this week.
Most of the WTA’s commercial licensing agreements are due to expire in 2026. However, the head of the WTA declined to say exactly when the leagues would benefit from the $150 million investment. He also asserted that the deal is not directly related to the lost revenue stream in China.
Regarding the partnership with CVC, in the face of concerns that WTA’s influence will be reduced in tournaments, Simon pledged: “There is no such thing. Whether WTA cooperates with CVC or any other partner, we are left to decide.
This investment is part of my perennial idea to raise more capital and to take it to the next level. WTA Tour Inc. unaffected. The WTA remains in 100% control of governance, regulatory and scheduling matters.”
The stature of CVC
CVC Capital Partners was founded in 1981 and now has 25 offices worldwide, managing over $100 billion. In 2021, CVC spent $2 billion to buy a 10% stake in the commercial division of La Liga football. Also in 2021, CVC spent more than $700 million to buy the cricket franchise in Ahmedabad in the Indian Premier League and about $500 million to buy a 14.3% stake in the Six Nations rugby union.
Cooperate and then break up
Tennis has had some bitter setbacks with outside investors. In 1999, the marketing company ISL Worldwide signed a 10-year, $1.2 billion agreement with ATP, which collapsed just two years later. In 2018, the ITF signed a $3 billion 25-year deal with the Kosmos consortium that led to radical changes in the Davis Cup, but the partnership broke down earlier this year.
