Organisers of the US Open tennis championship last year sold more than 500,000 of their signature cocktail, “Honey Deuce”. At $23 per glass, the drink grossed $13mn. By contrast, the men’s and women’s champions of the New York City event took home combined prize money of just $7mn.
To Bill Ackman and Novak Djokovic, that gap is a problem worthy of a US federal court lawsuit. The pair — one a hedge fund manager and the other a tennis champion — are friends, culture war contrarians and partners in the Professional Tennis Players Association, a new-ish group that purports to stand up for players. It most recently contends that tennis stars are being harmed by an antitrust conspiracy among the game’s power brokers.
Sports isn’t like other industries when it comes to market forces. Economists, legislators and courts have found that constraining competition to limit the number of leagues actually increases the pie. In winner-takes-all showdowns, having as many players competing together as possible increases dramatic tension, fan interest and advertising revenue.
The result is indeed a huge pie. But the actual competitors — the players — think their slice is not big enough. Labour disputes between on-field talent and the suits who stage the matches are commonplace. The vast fortunes now being minted through television rights have only left the gladiators wondering why they are not richer.
The PTPA says in its lawsuit that prize money for professional tennis players only adds up to perhaps a fifth of gross revenue. In big team sports such as American football and basketball the players have collectively bargained for about half of revenue. That’s particularly harsh on tennis players, who — as individuals rather than players on a team — each bear their own training and travel costs. Their season also lasts for 11 months as it follows the sun across the globe.
In this antitrust battle there’s no clear favourite. True, the $186mn in total prize money earned by Djokovic is exceptional. Only the top players earn a fine living, and that while risking constant injury. That said, the ATP, which oversees the professional men’s game, argues big bonus pools, minimum wins for even medium-ranked athletes and financial transparency have become the norm.
It might come down to views on what counts as generous to players. At last year’s US Open, singles players eliminated in the first round still got a healthy $100,000. The total gross purse for the tournament was a record-breaking $75mn. Ackman is used to tossing around big numbers and causing a ruckus; Djokovic is better at emerging as a winner. The case will be an intriguing test of whether the two, from very different backgrounds, work as doubles partners.
sujeet.indap@ft.com
