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Business/ Sports business Alt

A Volley of Threats

Elina Frumerman

Photo: PA

Photo: PA

The traveling circus known as pro tennis arrived on the outskirts of London on June 23. Yes, Wimbledon is in full swing. But this year, booming serves and deft volleys hardly seem to be center court, especially for the men. Boycott threats, lawsuits, pleas for more prize money, and a breakaway player group are stealing the headlines. Douglas Robson, who last wrote about the women's tour for BusinessWeek, explains what's behind all the turbulence:

What the heck are the players so unhappy about?

Money and control -- but mostly money. The Association of Tennis Professionals (ATP), which runs the men's circuit, wants a bigger piece of the pie generated by the four Grand Slam tournaments -- $50 million more, to be precise. The Slams operate independently of the ATP and kick in an average of about 11% of their income to players. Other events on the circuit contribute up to 39%.

Aren't tennis players a bunch of overpaid, overprivileged athletes as it is?

Well, yes and no. The 100th-ranked player last year (little-known Sargis Sargsian of Armenia) made $200,034 in prize money -- not exactly chump change. But prize money at ATP events has decreased more than 6% over the past three years, to just over $55 million in 2003, while total prize money at the Australian Open, French Open, Wimbledon, and U.S. Open grew by 25%.

Is men's tennis in trouble?

It's certainly under duress. Tennis still lacks a comprehensive U.S. television package. Sponsorship dollars are scarce because of corporate belt-tightening. And there's growing player dissatisfaction with ATP leadership. Current CEO Mark Miles oversaw the $1.2 billion TV and marketing-rights deal in 1999 with Swiss sports marketing company ISL during the height of the economic bubble. An overextended ISL went bankrupt two years later, forcing the ATP to scramble for new sponsorship. The deal's implosion created a financial crater that eliminated the players' multimillion-dollar bonus pool and forced the ATP to divert 3% of prize money to fund the players' pension plan -- money that would have gone into their pockets.

Why don't the Slams share more of their revenues?

The major tourneys are nonprofits and argue that their mission is to nurture tennis, not throw dollars at stars. That means pumping millions every year into promotion, education, and facilities. The United States Tennis Assn., which owns the U.S. Open, says it actually lost money the past three years.

The ATP says it has 80 players willing to boycott the Slams if they don't serve up more money. Would players really do that?

Not likely. When a guy like Martin Verkerk, a finalist at this year's French Open, can make more in one tournament than he has made in five years on tour, there's little motivation to blow off the majors. And is any player going to forgo a shot at the $1 million singles prize offered by this year's U.S. Open? What's more, history has shown sports fans have little sympathy for striking millionaire jocks. When asked whether he'd support a boycott, Lleyton Hewitt, the 2002 Wimbledon champion, told BusinessWeek through his agent: "Not a chance." Of course, Hewitt is suing the ATP over a $20,000 fine, and he may be especially grumpy because of his first-round loss at Wimbledon this year.

Why is the ATP sounding off just now?

Some insiders say the attack on the Slams is CEO Miles's attempt to save his roughly $1 million-a-year job. And the money woes have everyone disgruntled. In fact, earlier this year, five dozen or so -- including Hewitt -- formed a rebel group called the International Men's Tennis Assn. (IMTA) and threatened to organize a new men's association if Miles doesn't show them the money.

So what's going to happen?

The Slams have rejected the ATP's $50 million demand, but negotiations continue and players keep playing. Many hope that tennis will be forced to streamline its convoluted structure. But for now, the game is stuck at deuce.