If Every Tennis Player Is a Small Company, Who Keeps It Running?

We set out to explore the part that business and companies play in driving the sport of tennis.

This year's Wimbledon Championships has reached its ninth day. With Federer and Djokovic both winning in straight sets, the men's and women's singles semifinal lineups are complete, and the matches of the next few days should be better still.

First held in 1877, Wimbledon is 138 years old. It is the oldest and most prestigious tennis tournament in the world, and one of the four Grand Slams (Wimbledon, the US Open, the French Open and the Australian Open).

Tickets are expensive, yet about 500,000 spectators come to Wimbledon every year. It is also widely seen as the most profitable of the four Grand Slams, clearing more than £38 million a year. This year the tournament raised its total prize money to £26.75 million, more than any of the other three Grand Slams.

A tournament like Wimbledon, with great competitive weight and rich prize money, is one that top players such as Federer, Nadal, Serena Williams and Sharapova all regard as a must-win. But the players also have side businesses and careers off the court.

This year, for example, Sharapova opened a pop-up shop at Wimbledon for her own candy brand, Sugarpova. She also works hard to promote the brand as she travels the world for tournaments. In 2013 CNN named her one of the year's top ten celebrity female entrepreneurs. Thanks to her brand and a string of endorsement deals, she has been the world's richest female athlete for ten years running.

The players running and hitting so hard on court are, in fact, each a well-run small company. And tennis itself is a network radiating outward from the players at its center: a rich and complex commercial system.

The Big Companies Behind the Players

Before looking at these "small companies," let's see what role the big companies play in tennis.

Watch closely, and an intense tennis match turns out to be full of commerce. Big companies are actively involved in the contest between the two players; they have become participants in the game.

The most obvious sign is the brand logos on the players' clothing and accessories (headbands, for instance) during play. Those are the sponsors' marks. Beyond sportswear brands, tennis players also endorse brands in many other categories, including cars and watches.

Tennis is one of the most popular sports in the world, and its season is among the longest in professional sport. Counted from the Australian Open to the year-end finals, a season spans 11 months. Over that time players travel the world and compete as individuals, each one the undisputed center of attention in a match, which brings high exposure. Tennis fans are also relatively affluent, with more disposable income to spend on clothing, cars, rackets and watches. So sponsors compete for top players and value the major, globally broadcast events above all.

For the players, tennis is a highly commercialized, professional business. They are essentially financially independent and bear their own profits and losses. When they plan their income (which pays for their competing), they strike deals with sponsors. At this year's French Open, Nadal played wearing a Richard Mille watch worth $775,000.

Nadal playing while wearing a Richard Mille watch

Take clothing sponsors. Of the active stars with the highest commercial value (Federer, Nadal, Djokovic, Serena Williams and Sharapova), all but Djokovic are sponsored by Nike. By an incomplete count, Nike has "reached the final" 44 times at Grand Slam events over the past five years.

Equipment is a player's right hand in a match, and the piece with the most direct effect on performance is the racket. That brings in the equipment makers. A player just starting to compete has plenty of rackets to choose from. But judged by what the top players use, the most common brands are Wilson, Babolat, Head, Prince, Yonex and Dunlop.

Sponsoring Federer gives Nike and Wilson rackets high exposure

Among the 40 players in the ATP and WTA top 20, the most common racket is Wilson's, used by 15 of them. Founded in Chicago, Wilson is a world-famous equipment maker whose core sports products are rackets for tennis, squash and badminton. Its strong brand standing also owes much to its long record of supplying rackets to legends such as Sampras, Federer and the Williams sisters.

The ones who connect players with sponsors, find them suitable endorsements and equip them with suitable gear are their sports agencies. In fact, an agency does far more than this. Besides representing and advising athletes, the large sports agencies also manage events (running tournaments and competitions), produce and distribute TV programs (brokering broadcast rights), consult on sports sponsorship and more.

For their athlete clients, agencies open up (revenue-generating) opportunities on and off the court, build their brand image and explore their potential for ventures outside sport, all to maximize their returns.

The main agencies in tennis are IMG, Octagon, Lagardère and CAA, and the undisputed leader is IMG. Part of WME, one of the world's four major entertainment agencies, it represents many tennis players, including Djokovic, Sharapova, Kei Nishikori and Li Na, as well as the rising star Eugenie Bouchard.

It is worth noting, however, that in recent years Federer and Nadal have both left IMG. Each joined with his agent to set up his own agency, Team 8 and Goramendi Siglo XXI respectively. These firms not only package and develop their founders' commercial value but also sign other players and promote tennis to the public.

Beyond these companies, there are also technology firms that collect, compile and analyze match data. A tennis match generates a great deal of data: besides the obvious figures such as the score and the number of aces, there are serve speed, first-serve percentage, return success rate, points won and more. Players and coaches use the data to assess their own performance and to study an opponent's technique, tactics and body language. It also helps fans understand a player better.

The best known and most often mentioned is IBM. From the radar speed gun first used at tournaments in 1993 to the Slam Tracker now used at the Grand Slams, IBM has supplied tournaments with a great deal of technology and data. With Slam Tracker, users can follow every key statistic for both players in a match, as professional coaches and analysts do. Slam Tracker can also point players to the key factors for winning a match, helping them plan how to win.

High Prize Money and Eager Sponsors Make Top Players Rich

The world's top tennis players earn handsomely, and the gap is especially clear when women's tennis is compared with other women's sports. A player's income comes mainly from prize money and from advertising and sponsorship fees.

Prize money is the foundation, and results certainly matter. According to Forbes's 2014 figures, the ten highest-earning tennis players are broadly also the ten who win the most prize money; together they take home $61 million in prize money a year.

Prize money rises with a tournament's level, and only players ranked high enough qualify for the top events. Players fight for every point at the four Grand Slams. Besides the Slams' competitive prestige, one reason that cannot be ignored is the money.

At this year's Wimbledon, which has just begun, total prize money has set another record. The singles champions will receive £1.88 million each, up 7% from last year; even a player knocked out in the first round gets £29,000. Over the past four years Wimbledon's total prize money has risen from £14.6 million to £26.75 million (about $42.3 million).

The prize money at the other three Grand Slams, ranked by their most recent editions, is $40 million for the US Open, $36.3 million for the Australian Open and $35 million for the French Open.

Generous as the prize money is, players earn more from sponsorship and advertising fees, appearance fees, exhibition matches and the like, which bring in about $200 million. In 2014 alone, sponsors spent about $739 million on tennis players.

What kind of athlete do sponsors like? First, one who wins. The reason is obvious: the more rounds a player survives, the more TV exposure they get. Federer, for example, has long been tennis's top earner, and he got there on results. He holds the records for most Grand Slam singles titles (17) and for career prize money ($84 million).

By 2014 figures, Federer's total income reached $56.2 million, of which $52 million came from his large roster of sponsors, including Nike, Rolex, Credit Suisse, Mercedes-Benz and Gillette. Nishikori, ninth on the earnings list, has drawn more sponsor money precisely because his results at top tournaments have kept climbing over the past two years.

Looks also help a player earn from endorsements. The classic example is Sharapova: striking, fond of fashion events and always well turned out. In the second half of 2013 she was plagued by injuries and played only one match in six months, yet her sponsors did not lose faith. Her endorsement income from June 2013 to June 2014 came to $24.4 million.

Every Player Is a Small Company

A professional tennis player can be seen as a small company, a brand built and run by a whole team. The team is highly professional and well trained, and each member has a defined job, so that the player is well supported both in competition and psychologically. Besides the player's family, it includes the coaching staff, the agent, physiotherapists, nutritionists and others.

The company's costs are high, because such a team does not come cheap. The higher a player's ranking and income, the more money they have to expand and improve their team. Li Na once said in an interview that her team's basic costs ran to 10,000-15,000 yuan a day, and its total spending to about 4 million yuan a year. The money went on travel, accommodation, court rental, staff salaries and the like for Li Na and her team.

On this team, the coach is directly responsible for improving the player's performance. Coaches guide players in matches and daily training, plan suitable schedules and match tactics, and solve the technical problems that arise on court. A coach can also be a family member: Nadal's uncle has long been his coach, and Li Na's husband, Jiang Shan, once coached her too.

The medical staff and nutritionist keep the player healthy, that is, free of injury and in good physical shape. Physiotherapy and recovery after hard matches and training, and a sensible everyday diet, are all vital to staying competitive.

Sponsors, put simply, are the investors who supply this company's money. Its steady operation depends largely on the funds they provide.

The team also has someone in charge of business, usually the player's agent. In running a person, the agent plays the central role. The agent trades information with the other members of the team, ties the parts together and single-handedly handles the company's business development.

The first task is to turn the player's brand value into money. Starting from the player's core job, competing, the agent assembles the coaching staff, medical team and nutritionist best suited to the player, equips them with the right match gear and draws up a plan to improve their performance. The agent also arranges press conferences and fan events, and helps the player deal with current and potential sponsors and negotiate sponsorship agreements.

The second task is to work out how to extend a single brand into more fields. Last year the Canadian rising star Bouchard signed with IMG. Because she has both good looks and strong results, IMG signed her to two contracts at once, one for sport and one for fashion (modeling). IMG is also well connected in modeling and fashion, where it is the strongest agency, and the two contracts were meant to pave the way for Bouchard's later moves beyond tennis.

How the Small Company Keeps Going Around Its Athlete

A company has to think about how to keep going, so that it stays healthy over the long term. An athlete, during their career, has to stay competitive and influential both on and off the court; after retiring, they have to work out how to shift their core "business model" from earning money and attention through competition to something else.

Here the Chinese tennis star Li Na (also regarded as the most commercially valuable brand in Chinese sport) may be the best example.

Thanks to outstanding results and efficient commercial management, Li Na ranked 41st on the 2014 Forbes Celebrity 100 with $23.6 million, one of only three female athletes in the world to make the list. After retiring, she made Forbes's 2015 list of top-earning retired athletes with more than $13 million, the only woman on it. Her "competitors" on that list were legends and superstars such as Michael Jordan and David Beckham.

Li Na's core team

In 2009 Li Na went independent of the national tennis management center, soon signed with IMG and began working with the agent Max Eisenbud. She was already 27 and ranked 25th in the world. Her agency contract with IMG provides that IMG supplies her with overall marketing and other international services, plus a salary contract with a guaranteed minimum income. In return, IMG has the right to share in her advertising, endorsement and other income. Li Na wanted IMG to help her reach the world top ten before June 2010. That year, they did.

A year later, Li Na's tennis took off, and her commercial fortunes turned. She reached the 2011 Australian Open final and then won the French Open. Within weeks of that title, Eisenbud had negotiated contracts for her worth a total of $48 million. That year her sponsors, once only Nike, grew to include international brands such as Rolex, Häagen-Dazs and Mercedes-Benz.

In choosing sponsors for Li Na, IMG set thresholds to keep her income stable. Before her 2014 Australian Open win, for example, each company had to commit to a sponsorship term of at least three years and no less than 8 million yuan.

In 2012 Li Na turned 30, a veteran by any measure. After she lost at Wimbledon that year, she told Eisenbud she wanted a new coach, and he brought in the Argentine Carlos Rodriguez, who had coached the Belgian star Justine Henin. Li Na's championship team was now in place, its core members Eisenbud himself, her husband Jiang Shan, coach Carlos and fitness trainer Alex Stober.

Under Carlos, Li Na, by then late in her career, changed her serve and overhauled her whole game, attacking more and coming to the net more often. Alex's job was to keep her free of injury through a dense schedule of training and matches. Her game kept improving, she won the 2014 Australian Open, and Carlos, Alex and Eisenbud were all thanked in her victory speech.

Li Na and Carlos on the practice court before the 2014 Australian Open final

In Li Na's prime, the team gave her a systematic plan (the most suitable training, medical and nutrition programs, a sensible schedule and target results) that drove her competitive improvement. At the same time it lined up sponsors and commercial activities for her, to maximize both her tangible and intangible value.

Once she left the court, IMG mapped out her business path in retirement. After she retired, Eisenbud revealed a plan by IMG and Li Na to create a tennis school. The school will come with dining and leisure clubs, a rehabilitation center and a fitness center, and will sell licensed merchandise designed around Li Na's image. It is pitched as a "Li Na Park" in the mold of Disneyland: a complete sports and entertainment business.

In March this year Li Na launched her personal brand, "LI NA," and announced its first partnership, with the restaurant chain New Element, which introduced a "Na-style Vitality" menu. Last month a biopic about her was officially announced, to be directed by Peter Chan.

IMG now has a new direction for the "Li Na" brand. Its ultimate aim is to turn this strong-willed player into "China's number one businesswoman." She has retired, but a player's influence from the sport can live on, and her commercial career is far from over.

At the Four Grand Slams, Which Companies Win?

The Australian Open, French Open, Wimbledon and US Open are to tennis what the World Cup is to football. By history, scale, ranking points or prize money, they are the most important and influential events in the sport. Fans and players are not the only ones who take them seriously; many companies are actively involved too.

As noted earlier, the most visible sponsor marks in tennis are the logos on players' clothing and accessories during play. Players also endorse all kinds of brands off court (Li Na, for one, endorsed sports, car, restaurant, luxury and travel brands), but what appears on camera most often, and reaches viewers directly through TV broadcasts, is still the logo on their match clothing.

So in counting which companies come out ahead at the four Grand Slams, we chose players' sportswear sponsors. A "winning brand" here means one whose sponsored player reached a singles final.

Over the past five years, the Grand Slam singles events produced 40 finals and 80 champions and runners-up. Nike is the clear winner: its swoosh appeared in 32 of those finals, and finalists wore Nike 44 times. Nike's roster of tennis players is very broad, from absolute superstars such as Nadal, Serena Williams, Li Na and Sharapova, to strong players such as Azarenka and Kvitova, to popular young players such as Bouchard.

Next, by number of appearances in finals, comes Uniqlo. Its players have reached Grand Slam finals nine times, Djokovic alone eight of them. His switch from Sergio Tacchini to Uniqlo in 2012 was big news at the time. And with the rise over the past two years of the Japanese player Nishikori, whom it also sponsors, Uniqlo no longer depends on Djokovic alone for exposure at the Grand Slams. Notably, fast-fashion clothing brands have been moving into tennis in recent years: H&M, another fast-fashion brand, has signed Tomáš Berdych, sixth in the ATP singles rankings, though he is still pushing toward a first Grand Slam final.

Uniqlo has reached nine finals, eight of them thanks to Djokovic

Then comes Adidas, with seven Grand Slam finalists in its colors, though last year it lost its star, Andy Murray, who moved to Under Armour when his contract expired. Sergio Tacchini resembles Uniqlo: the Italian brand appeared in six Grand Slam finals entirely because it had signed Djokovic.

Cover image from the Wimbledon official website