Wimbledon is relying on time-honoured methods to finance improvements as the four tennis grand slams slug it out to attract all-important broadcasters
This article was first published in the June 2017 UK edition of Accounting and Business magazine.
Next month, from 3 to 16 July, the biggest fixture in world tennis will take place: the global phenomenon that is Wimbledon. It may be steeped in tradition, but behind the old-world façade of the All England Lawn Tennis Club (AELTC), big changes are afoot to ensure the tournament keeps up with the times, not to mention the other tennis grand slams – Australia, France and the US.
Competition among the four tournaments is every bit as ferocious commercially as it is for the players competing on court. Each slam claims to be the best, and all say they offer spectators the best tennis. The fierce rivalry erupts seemingly over anything and everything, from spectator numbers to sliding roofs, social media, television ratings and prize money. In short, all of the slams are terrified of being left behind.
Improvements at Wimbledon – the most traditional of the four tournaments – include the addition in 2009 of a 3,000-tonne retractable roof on Centre Court. At an estimated cost of £100m, making the 1920s arena weatherproof didn’t come cheap. The AELTC is a private members’ club and raised the required funds for the roof through a debenture sale in 2007, which also enabled the necessary redevelopment of the site. It worked so well that the club launched a similar debenture plan in April 2016 to finance the installation of a new roof over No 1 Court, due for completion in 2019. It has already raised the £25m (before expenses) for improvements, including an additional 900 seats, which will bring total capacity for the court to 12,400 spectators.
For the No 1 Court improvement programme, 1,000 new debentures were put on sale at £31,000 each, covering the period from 2017 to 2021. They were over-subscribed, revealing yet again the financial power of the tournament.
The debenture ‘super-tickets’ guarantee investors a show-court seat every day of the championships for five years. They are also the only tickets that can be legally traded – potentially for big sums. Pairs of tickets for last year’s men’s quarter-finals on No 1 Court, the most valuable tickets that debenture holders can sell, were on offer for £2,500. The most recent debenture resale prices have averaged at £18,600.
Debentures have long been used by the AELTC to finance its capital expenditure. They were first issued by the club in 1920, for the purchase and development of its present site, and to help meet the cost of building Centre Court.
Discussing the latest issue, Richard Atkinson, the AELTC’s finance director, said: ‘From the launch, all indications have suggested keen interest.
‘We had hoped existing debenture holders would apply for the issue – they were first in line, as the offer was oversubscribed – as happened with the last issue of Centre Court debentures. But we are also happy to have welcomed new holders, whose enjoyment of Wimbledon will be taken to a new level.’
In 2015, Wimbledon refurbished two buildings at a cost of £15.2m and negotiated new TV broadcast contracts in Australia, Japan, Russia, Africa and Belgium. In a multi-year sponsorship deal, Jaguar Land Rover became the official car of the championships.
Latest available accounts for the year to July 2015 showed an increase in revenues at the AELTC to £166.9m, up from £154.9m in the previous year. Operating profit rose to £41.1m (£37.7m in 2014), and a surplus from the championships increased to £37m (£35m in 2014).
But Wimbledon isn’t alone – all of the grand slams have experienced similar growth and have revealed equally ambitious modernisation plans.
Vive le French Open
The French Tennis Federation has drawn up a comprehensive project to modernise the Roland-Garros stadium, home of the French Open. The stadium will be extended in a way that respects its surroundings, especially the adjoining botanical gardens, the Jardin des Serres d’Auteuil.
Plans for the stadium also include covering the central Philippe-Chatrier Court – which seats 15,000 – with a retractable roof, which can be closed in around 15 minutes. The completion date for the ambitious project has been pushed back to 2020.
Underneath the roof, the stadium will itself be redesigned with new, more comfortable stands and new areas for players, media and sponsorship partners.
Meanwhile in Australia, the first stage of renovations of the facilities at Melbourne Park, home of the Australian Open, has been competed, including 1,500 additional stadium seats and a fully retractable roof for the Margaret Court Arena.
Three of the principal courts in Melbourne now have retractable roofs to avoid the interruption of play due to extreme weather. This has been an issue in recent years – but not so much because of rain, as might be expected in London or Paris. In Melbourne, high temperatures – often above 40C at the Australian Open, with ball boys fainting, and players complaining of heat exhaustion and dehydration – are the main reason for closing a roof in summer.
As at Wimbledon, retractable roofs also guarantee broadcasters live tennis matches whatever the weather, demonstrating just how vital broadcasting revenues have become to the modern game.
It is estimated that such revenues at Wimbledon generate in the region of £80m-£90m a year. Certainly more than half of the tournament’s turnover comes from a small number of broadcast markets, especially in the UK and US.
Given the huge numbers at play, there is little wonder that Wimbledon and the Australian and French Opens are looking to improve their infrastructure in order to satisfy their extremely important paymasters. Love all.
Alex Miller, journalist
"Retractable roofs guarantee broadcasters live tennis whatever the weather, demonstrating how vital these revenues have become to the modern game"