Tours must be creative with cost management during economic instability
While tennis may have some insulation from the current financial crisis because of a diverse portfolio extending over multiple continents, the tours are fully cognizant that appearance fees, title sponsors and attendance all may feel the effects of the market chaos.
Sports and the economyIf the troubled economy isn't already touching your favorite sport, it will soon. ESPN.com takes a comprehensive look at the future financial state of our games. And for more, watch archived video of "Outside the Lines" for a discussion of today's economy and how it will directly affect the business of sports franchises and sports fans across the country. • Joyce: Worst is yet to come for sports
• Tennis: Uncertainty amid market volatility
• Bodo: Tennis players underpaid?
• Golf: PGA Tour keeping close tabs
• Boxing: Boxing economy on the ropes
• Community: Share your story
• Chat wrap with Gare Joyce
Simon said this week that Pacific Life's decision to end its sponsorship was not a direct result of uncertainty in the financial markets. He said the tournament is involved in "positive discussions" with a potential successor, and added that ticket sales for the event are steady or slightly better than they were at this point last year.Financial institutions and insurance companies have formed the monetary backbone of the eight-tournament summer U.S. Open Series. The 82-year-old Los Angeles tournament played at UCLA is seeking a title sponsor after Countrywide, which paid for that distinction for the past five years, elected not to renew its contract for 2009. The troubled mortgage company was bought out by Bank of America earlier this year. On the flip side, longtime U.S. Open sponsor JPMorgan Chase appears to be committed to staying in tennis. In a recent interview with tenniswire.org editor Liza Horan, senior vice president Barbara Paddock said the 27-year-old relationship between the tournament and the banking behemoth is "perfect for our consumer and our wholesale interests. It transcends all of our businesses. It's part of the fabric of our bank." Paddock said that marketing dollars are under intense scrutiny in these belt-tightening times, and JPMorgan has whittled its sports sponsorships down to tennis and running. Internationally, the picture looks different. Barclays Bank just signed a five-year, $35 million deal to sponsor the ATP's year-end championships, which will shift to London next year, and three of the tour's top sponsors -- South African Airways, Ricoh and Enel -- just renewed their contracts. Just two weeks ago, the British Lawn Tennis Association -- Great Britain's national federation -- landed a $53.6 million sponsorship from the Dutch insurance company Aegon that will run from next year through 2013. Horan said the grassroots infrastructure of the game in the United States is strong by several measures. Participation numbers, retail sales, tournament attendance, programming, facilities, sponsorships and teaching organizations are "at their highest point since the '70s and '80s," she said. "There's been a significant investment in collaboration between stakeholders." There no doubt will be some shifts as working fans watch their budgets, she said, perhaps giving up club memberships and hitting on public courts, or forgoing expensive trips to faraway tournaments and staying closer to home. But recreational participation and racket sales have both withstood dips in consumer confidence in the past eight years, and Horan thinks people who have made tennis a regular part of their lives will keep doing so. Horan does worry that the smaller pro tournaments in North America could be imperiled. "The bigger tournaments probably will be OK, because they have long-term contracts with sponsors," she said. "I'm concerned that the lower-level tournaments won't be able to ride their coattails."
Bonnie D. Ford covers tennis and Olympic sports for ESPN.com. She can be reached at email@example.com.
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