Tennis gets a taste of Ackman activism

Former Goldman Sachs partner Alan Waxman left the investment bank during the financial crisis in 2008, and started investment firm Sixth Street the following year. The firm, which manages more than $100bn in assets, has been at the forefront of the shift of institutional capital into sport.

This week, the investment group added to its growing sports portfolio, first buying a 10 per cent stake in Major League Baseball’s San Francisco Giants at a $3bn valuation, then backing the $6.1bn takeover of the National Basketball Association’s Boston Celtics.

This adds to Sixth Street’s portfolio of sports investments, which range from the Legends experiences and hospitality business to deals with Spanish football giants FC Barcelona and Real Madrid, women’s soccer side Bay FC and the San Antonio Spurs basketball team.

Sixth Street exemplifies the shift of power from banks to private capital since the credit crunch. It’s also become a critical source of funds for the sports industry as valuations boom.

This week we’re looking at the latest outbreak of sporting lawfare, this time in tennis. Plus we ask what the new head of the Olympic movement might do for the business model. Do read on — Samuel Agini, sports business correspondent

Tennis players battle for their share of the sport

Serbian tennis star Novak Djokovic and hedge fund titan Bill Ackman might not sound like the most obvious pair.

But this week, the Professional Tennis Players Association, a non-profit co-founded by Djokovic and supported by Ackman, accused the men’s ATP Tour and the Women’s Tennis Association of running a “cartel” alongside the International Tennis Federation, a governing body.

At the heart of the complaint is the allegation that the tours and governing bodies work together to suppress players’ earnings, but it also takes aim at the sport’s brutal 11-month schedule and playing conditions.

The International Tennis Integrity Agency — a body responsible for anti-doping and match-fixing checks — was also criticised for using measures that were “far more draconian and invasive than necessary to achieve its aims.”

While Djokovic wasn’t among the plaintiffs and doesn’t support every word of the lawsuit, high-profile players such as Nick Kyrgios, PTPA co-founder Vasek Pospisil and Zheng Saisai put their names to the suit.

“Tennis appears to be a glamorous sport for well-compensated athletes. The reality is a lossmaking, health-threatening grind for all but the top 100 or so players,” Ackman wrote on social media platform X.

He claims the legal action “will revolutionise tennis” and allow players from all walks of life to make a better living from the game. (We covered the financial difficulties facing many aspiring tennis players in this video.)

We won’t prejudge the outcome of the PTPA’s legal action. It’s worth noting that the ATP and WTA, which intend to vigorously defend themselves, have pointed to measures they’ve taken to increase player earnings. The ITF is considering its response, while the ITIA declined to comment.

But this movement goes beyond tennis. Player power is on the rise across professional sport. Athletes are increasingly business savvy. Collective bargaining agreements, for instance, are common in the US, where players form independent associations that fight their corner on matters from pay to welfare.

In Europe, the football players’ union is fighting world governing body Fifa over workload. Recall that the European Court of Justice ruled late last year that both Fifa and European governing body Uefa had acted unlawfully when threatening the 12 clubs that attempted to launch the European Super League in 2021.

Then take a look at the Ackman-chaired Winners Alliance, the for-profit affiliate of the PTPA, which is bringing a new commercial model to the sport of athletics alongside Olympic legend Michael Johnson.

This is the other side of sport’s financial boom: everybody wants a piece of the action.

IOC members choose to keep things the same

When the International Olympic Committee’s outgoing president Thomas Bach was handed the piece of paper revealing the outcome of Thursday’s vote to replace him, a little smile flickered over his typically austere face.

If the IOC rumour mill is to be believed, Bach had long favoured Zimbabwe’s sports minister Kirsty Coventry as his replacement, and had quietly been lobbying for her behind the scenes during a rigorously controlled election campaign.

Upon taking office in June, Coventry will become the first woman and the first African to lead the world’s most powerful sporting body. At 41, she is also much younger than her recent predecessors. Bach is 30 years her senior. As such, she marks a significant departure from IOC tradition of electing European men approaching retirement age.

But on the policy front, Coventry is seen very much as the continuity candidate, which may disappoint those who believe deeper change is needed. We laid out that debate in a Big Read ahead of the vote.

Some of her rivals made specific criticisms of the current set-up and prescriptions for fixing them, such as partnering with outside investors and bringing in donors to fund some Olympic programmes. Candidates talked of an overly powerful executive and a failure to send enough money down to the sporting bodies at the base of the Olympic ecosystem.

In contrast, Coventry’s manifesto was largely devoid of detail, preferring to stick mainly to uplifting generalities.

“Through collaboration, transparency and intentional leadership we will draw on our experience, knowledge, and passion, to make the necessary decisions to push forward,” she wrote in the foreword. “We must critically assess our priorities, acknowledge and act on our weaknesses, and remain uncompromising in our standards.”

Speaking to the FT during the campaign, Coventry said the IOC needed to boost revenue above $10bn per cycle, significantly higher than the $7.7bn raised from the Paris quad.

Yet the section of her manifesto headlined Revenue Growth offers scant direction. On the issue of sponsorship, which has become a big area of debate following the departure of at least three key partners, it reads:

“For the IOC, it is about symbiotic partnerships — balancing exclusivity with inclusivity and embracing innovative sponsorship models that broaden participation without diluting impact.”

And with regards to the future of the broadcast business, which accounts for more than 60 per cent of IOC revenue, the manifesto says:

“It is impossible to see where the media landscape will be in five years but it is clear that the trend of linear television remains a key pillar of engagement. However, the rapid growth of digital platforms, streaming services, and on-demand content calls for greater adaptability. Working with media rights holders we will explore these avenues which will enable the Olympics to reach broader and more diverse audiences so the Olympic brand remains relevant and accessible in an increasingly competitive market.”

Bach is handing over an organisation with a long runway of commercial deals. Just last week, he agreed an extension with NBC to carry the games until 2036 worth $3bn. Two big sponsors have also recently renewed their contracts with the IOC, although only one of the three (or possibly four) departing sponsors has been replaced so far.

As much as anything, the outcome of this week’s vote shows the IOC membership of princesses and business leaders are — unsurprisingly — a pretty risk averse bunch. It also indicates a high level of loyalty to the current leadership, which guided the organisation through the pandemic and several other crises over the past 12 years.

The IOC is certainly getting a fresh face, but those hoping for a fresh approach may be disappointed.

Highlights

• Italian football star Francesco Totti has ignited controversy with his plans to visit Moscow to attend a gala event staged by a Russian sports betting portal next month.

• The owner of Formula 1 is hoping a new film starring Hollywood star Brad Pitt will boost the sport’s Netflix-driven push into the American public mainstream, as it seeks to secure a more lucrative US broadcast deal.

• Boxing is set to stay on the Olympic programme in Los Angeles in 2028, after the International Olympic Committee recommended its inclusion under World Boxing, a new governing body.

• Sports valuations don’t always go up. Endeavor is paying Nasdaq-listed Sportradar $225mn to take a portfolio of lossmaking sports data rights off its hands, as the talent agency owner cleans house ahead of going private.

In a chart: The rise of women’s sport

Revenue generated by women’s sport is set to top $2.3bn this year, according to new projections from Deloitte, as the fast-growing segment continues to attract investment.

The forecasts point to a more than doubling of the financial value of women’s sport compared to 2023, with commercial income — mainly sponsorship — accounting for the lion’s share of revenue.

North America accounts for almost 60 per cent of the total revenue from women’s sport, with Europe bringing in a further 18 per cent. Basketball alone is expected to raise more than $1bn of revenue this year.

Yet the infrastructure challenges facing women’s sport were laid bare once again this week, with two high profile matches played in conditions labelled as “disgraceful”. More on those issues here.

Final Whistle

It’s the international break and everybody is talking about new England men’s football manager Thomas Tuchel, but let’s step back and enjoy the simpler things in life.

Like this kid gifting a pair of shin pads to England midfield ace Declan Rice. Who says meeting your heroes isn’t a good idea?