Breaking Down The ATP Prize Money Increase: It Makes Sense

News broke Friday that the ATP had announced significant prize money increases for both the Masters 1000 and ATP World Tour 250 events in the years to come.

Here’s the full statement:

The ATP has announced significant increases over the next four years that will see overall player compensation on the ATP World Tour reach US$135 million by 2018. Player compensation at ATP World Tour events in 2015 will exceed US$100 million for the first time.

The increases at ATP events are a testament to the sustained success of men’s professional tennis, as well as demonstrating the ATP’s confidence in the strength of its product and projected growth in future years.

The biggest increases in player compensation come at the ATP World Tour Masters 1000 category, with tournaments providing annual increases of 11%, and with the ATP contributing a further 3% increase, resulting in a 14% annual increase in that category through to 2018. Player compensation at the ATP World Tour 250s is set to increase at an average of 3.5% per year during the same period.

The latest decisions at Masters 1000 and 250-level mean that player compensation is now confirmed across all three ATP World Tour tournament categories for a four-year period. Player compensation for a five-year period for the ATP World Tour 500 category was decided at the end of 2013.

Many in the tennis world voiced their opinions on the increase(and what didn’t increase). A recurring theme across twitter Friday was that both the ATP Challenger Tour and the ITF Futures Tour were being neglected from the prize money increase. These lower levels of professional tennis have been brought up much more in recent months, notably for their poor conditions and lack of funding.

The Tennis Nerds are especially keen followers of the Challenger Tour, and we always wish for nothing but success for the endless “Foot Soldiers of Tennis“, if you will. Challenger tennis is one of the purest forms of competition; as Bradley Klahn told us in 2013, “every day there is a person across the net trying to steal your lunch money.”

However, the popular notion that the ATP should “restructure” their prize money breakdown to include the Challenger tour is simply misguided.

And before we get too far, let’s remember that Futures tournaments are run by the ITF, not the ATP. The ATP has no responsibility to maintain funding at those events. Prize money at that level is solely on the shoulders of the ITF.

If you take only one thing from this piece, let it be this: tennis is entertainment.

Just like all other sanctioned sporting leagues, the Association of Tennis Professionals is, quite simply, entertainment. Now this may seem obvious, but it is critical to understanding where and why prize money is distributed.

Tennis players are not paid for winning tennis matches. Tennis players are paid because people(fans) are paying to watch them. Whether they are watching in person, on TV, or online, each fan contributes to the overall revenue of the ATP

Masters 1000’s, who are receiving the largest chunk of the increase(14% increase annually through 2018), have been widely successful over the last decade. With three of the greatest players to ever play the sport at the top of the game, attendance, sponsorships as well as TV broadcast numbers have gone through the roof. Let’s look at a few examples.

  • Indian Wells set their attendance record in 2014 for the eight consecutive year, with 431,527 fans attending the tournament. (Indian Wells is a joint ATP/WTA event.)
  • Cincinnati also set their attendance record in 2014, with 191, 752 fans coming through the gates. (Also a combined event)
  • Shanghai has been voted as the Masters 1000 tournament of the year for the past five years. Their attendance, TV broadcast deals and sponsorships have increased rapidly since the tournaments inception in 2008.
  • Toronto and Montreal (Roger’s Cup) set their attendance records in 2010 and 2011, respectively; years when the ATP event was held in each city. (The ATP and WTA alternate venues each year)

To put it simply, these are the tournaments that matter. Outside of the four Majors, the nine Masters 1000 events generate the most revenue in the tennis world. Tournaments are ever-expanding; new stadiums and facilities are being announced at an astonishing rate.

On the other side of the net is the Challenger tour. While some tournaments are successful in drawing crowds and sponsorships, the tour as a whole has struggled to maintain relevance. And those challengers that do bring in crowds, such as Mons(broke attendance record in ’14) and Sarasota, have higher prize money and points available. Those tournaments were not simply given the $100,000 title, they earned it by proving relevance and quality entertainment.

The Napa Challenger has been mentioned as a candidate to increase their total financial commitment in the coming years. That is not going to simply be handed to them by the ATP; they’ll need to secure sponsorships and promote the tournament on their own. I’m sure they’ll be able to do so, but not because of a gift from the ATP.

There is a separate conversation to be had about the ATP’s promotion(or lack thereof) of challengers. However, do consider that nearly every tournament now has at least one streamed court, and Josh Meiseles writes a weekly recap of each tournament. This is certainly an improvement from years past, and perhaps with a growing audience, the Challenger Tour will eventually get a prize money increase of its own. But it would get that increase because they deserved it.

Again, let me stress that the The Tennis Nerds are huge backers of the Challenger Tour. We find it to be great entertainment. But, at least for the time being, a majority of tennis fans do not.

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6 thoughts on “Breaking Down The ATP Prize Money Increase: It Makes Sense

  1. You make some excellent points but bottom line to me is – do you just want 100-150 players in the world to do more than just break even? I feel like some of the guys could be doing a lot more with their talent if they had stronger teams around them (physios in particular). But that costs lots of money. Yes, this is about entertainment, but what will happen when the Big 3 are gone? I just feel like this move is a bit short-sighted and doesn’t really invest in the sport itself.

    On a separate but related note, Josh does amazing work, but I sometimes feel like the challengers are at a loss when it comes to marketing within their communities. Partly because it’s so volunteer driven. What if the ATP (or maybe it should be the national federations) invested in a marketing teams to help each tournament do better branding, outreach, PR, etc?

    • Thanks for the comment Jon, appreciate it. I get what you’re saying, and I’m all for the future growth of the sport. Obviously I’m with you–I want more than 150 guys making a living. But I don’t think we can throw money at challengers just yet, it’s too much of a loss. We’re both huge challenger fans, but we would be ignorant to deny how poor the crowds often are.

      And that ties directly into your next point. Marketing these tournaments more efficiently will hopefully give the ATP a realistic option of increasing prize money. I completely agree, there needs to be better outreach. I’ve talked with ATP officials and they are in agreement that the Challengers are beginning to gain traction. I really believe that they will keep growing, and eventually get more $$

      • Yeah. In the US particular, we need the challengers to be big. Consider we have, what, 5-6 guys playing the main tour vs. 15-20 playing challengers, and there are way more challengers than tour events in the US.

        I’d also love to see some mixed gender events. Seriously, how great would it be to have the women on the NoCal swing or the Winnetka event, which could definitely handle it? I know that crosses ATP/ITF lines (and implicates the WTA), and I don’t think every tournament should do it, but 8-10 would be really cool IMO – and help with marketing

  2. An awful article that continues to promote the elitist nature of tennis to its fullest.

    If we look at the sport going forward and think about the next generation of talent, then the likes of Coric, Thiem and many of the better known youngsters will always be fine because their sponsors will ensure they have the funding necessary to reach the top. It isn’t them the challenger tour caters to, it’s those who either aren’t quite good enough to reach the top, those who develop later in life and many others.

    How can you tell me it makes sense for a losing round one individual at Wimbledon to earn £27k (for example), whereas someone who slogs his guts out for a week on the challenger tour can end up earning a paltry $5k?

    The lack of money at the lower end of the game is what prohibits people from making careers in the sport. With the average age of a top 100 player going up, it stands to reason that the costs required for a player to continue to survive on the tour will increase until such time that they may finally be able to make the breakthrough – if ever.

    It’s a disgrace that the challenger tours and the futures tours pay so little. You should be banging the drum about the issue regularly. Not making excuses as to why it’s OK to ignore these people.

    It’s just not good enough for a player to be ranked 150 in the world and yet barely be above break-even.

  3. Joey – you make the market forces argument well. No question that the elite players deserve their share in tennis’s success.
    But, the question of funding Challengers is not (for me at any rate) one of market forces. It’s one of what the consequences are if you leave Challengers the way they are. 2 things are more likely to happen: 1) younger players find it harder to break through (see the physio, nutritionist point above which entrenches the current top 50 as well as making it more difficult for those outside); and 2) increased risk of match-fixing. This is a decision from the ATP that needs to be matches with an increase in Challenger pay.
    More here: https://cleaningthelines.wordpress.com/2014/12/14/36-christmas-but-not-for-the-challenger-tour/

  4. Pingback: ATP and ITF News about prize money changes | CarreTennis

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