How Craig Tiley and the Australian Open could create a billion-dollar global tennis revolution
If you find the global tennis calendar confusing you’re not alone, which is why Craig Tiley is enthused by plans potentially afoot for a new ‘Premier Tier’ tournament.
Tennis Australia boss Craig Tiley is driving a behind-the-scenes push that is gathering pace for a revamp of the international tennis tour potentially worth billions of dollars.
The proposal, which unfolded during the last few months before Christmas, would see the four grand slams – the Australian Open, Wimbledon, French Open and US Open – combine forces with about 10 other big global tournaments for a “Premier Tier” circuit featuring the best male and female players.
The move could include private investment, potentially including from Saudi Arabia – which has already disrupted golf with the breakaway LIV Tour – and would probably involve governing bodies such as Tennis Australia emerging with a financial stake in the circuit.
Discussions featuring global tennis executives – such as the leaders of the men’s Association of Tennis Professionals and Women’s Tennis Association tours and player representative bodies – are expected to take place during the Australian Open in Melbourne, which begins on Sunday, the first time the tournament has been extended a day past its usual fortnight schedule.
It comes as the Australian Open looks set to potentially break through the 900,000 attendance mark for the 15-day event, which would be a record, and as Tiley sets his sights on Tennis Australia becoming a $1bn business through ever increasing broadcast revenue, ticket sales and new sponsorship deals across Asia by the end of the decade.
While Tiley stopped short of revealing his precise involvement or plans for the mooted Premier Tier, which as a Formula One-style circuit would include existing big Masters 1000-tier tournaments in North America, Europe and Asia, he told The Weekend Australian that change was needed for an often confusing global tennis calendar outside the grand slam events that fans found hard to follow.
“We know from a tennis perspective we are sub-optimised when we talk about a narrative. We all know that, it is not a secret. So what role can we play – and everyone collectively, the ATP, the WTA, the players, the Masters 1000s – to create a fan-focused product that makes a lot of sense,” Tiley said.
“Tennis is highly successful. There’s a great opportunity for it to be even more successful. We don’t know what it will be, but there is a magnificent opportunity for the sport’s ecosystem to put aside differences and say what’s in the best interest of fans and players.
“We are now in an environment where there’s more disruption and opportunity, so as an entity and as a sport we should be looking seriously if there’s an opportunity to do more for the fans and the players.”
About 75 per cent of the revenue in elite tennis comes from the big four grand slam events, the most historic, well-known and popular tournaments in the sport.
Underneath that is a confusing array of various tiered tournaments and events, which count for different ranking points and prize money for the players, and at times compete with each other for sponsor and broadcast interest.
But tennis players receive only about 25 per cent of the sport’s revenue, compared with 50 per cent in large team sports around the world, leaving tennis ripe for disruption – as has happened in golf, where the Saudi Arabian-funded LIV has paid huge sums to lure top players including Australian Cameron Smith from established tours.
US sports website The Athletic has reported Tiley’s push for the grand slams — that are now aligned and have employed Boston Consulting Group to collect data and investigate cost synergies across the four events – to combine forces with the players, the tours and events for a circuit that would involve roughly the top 100 players.
One plan involves Saudi Arabia, which has reportedly expressed interest in holding an event in early January that would compete with, and potentially decimate, Tennis Australia’s fast-growing $20m United Cup held around Australia.
A new global elite tour may instead try to award a tournament to Saudi Arabia later in the year as a compromise. This week, London’s The Telegraph reported that the UK’s Lawn Tennis Association had turned down a proposal from the ATP that would have given Saudi Arabia’s Public Investment Fund advertising at the Queen’s Club Championships and Eastbourne International, traditional lead-in events to Wimbledon.
Tennis’s existing structure may be an issue. While Tiley has got the four grand slams co-operating, there are the two tours, and then individual owners of some big tournaments – billionaire Larry Ellison owns the Indian Wells event in the US and financier Ben Navarro paid $US300m for the Cincinnati Open in 2022 – and other governing bodies, as well as, for example, private equity group CVC Capital Partners investing in the WTA.
When asked how Tennis Australia could be involved in any potential global changes, Tiley said: “We want to play a role [and] I think the Australian Open needs to play a role in it.
“But there’s a lot of stakeholders in tennis – probably too many – but there’s an opportunity. You hear players talking about it, you see things written about a ‘premium tour’ and all this sort of stuff, well it does make sense.
“The question is always how. How is the hard question – and I thrive on the how.”
When asked if he could play a leadership role if a global elite tour were to eventuate, Tiley said: “I will stop short of making any commitment other than to say we as an organisation are committed to change and what’s in the best interest for the sport and opportunities in the future.
“I love this sport. I love this organisation and I love this event [the Australian Open], and I’m constantly thinking about ways to get better and the ways to make this event better.”
Tiley said “some form of change is inevitable, it just depends on the extent,” and that the “grand slams should be the cornerstone of any change”.
He said the prospect of Saudi Arabia getting an event in January and effectively stealing focus from the Australian Open lead-in events was “more noise than … reality” but added: “Anyone who wants to invest in sport is a good thing, right? It is just how you invest and how you make it work.
“I don’t think you need to invest to sub-optimise someone else. We have a very successful start to the year from a players perspective and the players say they love it, and the fans love it. The United Cup is watched around the world … and we are onto something that we think can be pretty special.”
The male and female United Cup team event has proved popular with fans in the first weeks of January, and Tiley said after only a couple of years Tennis Australia was breaking even on it in some of the host cities as crowds flocked to matches in Brisbane, Perth and Sydney in particular.
But it is the Open that remains the organisation’s signature event and financial cash cow.
The Australian Open now gets bigger crowds than the other three grand slams, and Tennis Australia’s fiscal recovery from two years of Covid disruptions was capped with a $19m operating surplus from a record $553m revenue for the 2023 financial year.
Much of that revenue comes from the big event in Melbourne, and Tiley says Tennis Australia will post another record revenue result again this year. An extra day’s play, with an estimated 50,000-60,000 spectators attending, will probably be worth an additional $10m income or more.
Tiley is aiming for Tennis Australia to reach the $1bn revenue mark in five years, helped by a new $425m five-year TV deal with Nine Entertainment that kicks in next year and other lucrative sponsorship deals, including with Chinese liquor company Luzhou Laojiao, worth about $8m annually (less than its previous deal), and a new partnership with Chinese firm Luckin Coffee.
Tiley said Tennis Australia had re-established commercial offices in China post Covid and would play a wildcard tournament for entry to the Australian Open in Chengdu next year, as part of a push to gain more commercial income from Asia.
Tennis Australia’s financial position has also been strengthened by a Victorian government decision to forgive a $43m loan struck at the height of Covid in return for a two-year extension of Melbourne’s hosting contract.