BCG on the baseline of proposed international tennis upheaval
The sport of tennis is facing a major international upheaval at the top level due to apparent viewer stagnation and Saudi disruption, with Australia at the centre and Boston Consulting Group (BCG) lurking in the back-court.
As the key stakeholders in international tennis prepare for what could be the sport’s biggest overhaul in more than a generation, it has been revealed that global strategy giant Boston Consulting Group has been busy serving in the background in the bid to reshape its future – and may have been playing both sides of the net.
However, it appears the strategy consulting firm could in fact be playing umpire in what has previously been framed as a multi-billion-dollar battle for control of the tour.
The story is a familiar one: following its ongoing disruption of golf and soccer among a host of other sports, the oil-rich Kingdom of Saudi Arabia now wants a slice of the international tennis action, and is naturally bringing billions of dollars worth of bargaining chips to the table. Meanwhile, the upper echelons of these global sports – many which are perceived to have become stagnant or oversaturated and so then ripe disruption – want a bigger cut for their contribution.
As to tennis, the Saudi proposal – or “takeover bid” – according to reporting in the Telegraph, involves merging the ATP and WTA men’s and women’s tours under the country’s sovereign wealth fund Public Investment Fund (PIF), with the promise of equal prize-money backed by a $2 billion investment offer and a “take it or leave it” 90-day deadline for the sport’s various administrators to respond.
Key though, would be the Kingdom playing host to a top-level Masters event to commence the season.
Yet, the start of the season just so happens to coincide with the Australian leg of the tour, including the Australian Open, one of the sport’s four grand slams which are overseen by world governing body the ITF. The heads of those four majors, including Australia’s Craig Tiley and his US counterpart Lew Sherr, have now come out with their own vision for a ‘Premier Tour’, which would concentrate on the top 100 or so players competing in a streamlined schedule.
In publicly pitching their proposal, the pair cited survey data from BCG, which was engaged by all seven major international tennis authorities including the individual Grand Slams on a combined research assignment and reportedly quizzed 5,000 tennis fans around the world. The take-home: people like tennis, but there are too many meaningless tournaments, with just ten of the 140 or so of those on the annual calendar accounting for 80% of global revenues.
“The work we did with BCG around this clearly identified the most value generated from changes in the product and the calendar,” Sherr told the Sports Business Journal. “If we can get that right, that is what will drive more viewership, more interest – and then off that, the economics that trail along with: more viewership, greater sponsorship value, higher broadcast rights, et cetera. Additionally, commercial aggregation, improved marketing, all of those things will be helpful.”
Consulting’s tennis link
While it wasn’t reported, it seems rather unlikely based on history that the consultancy’s involvement stopped at picking up the phone to a few punters for their opinions and tallying up the tour receipts. BCG, led by the firm’s Australia co-founder Colin Carter, had a major hand in shaping Australian rules football into a national competition, and was recently revealed as the architect behind cricket’s World Test Championship and T20 private investment proposals.
Where it gets interesting as to the major rejig of tennis, is that the firm was recently dragged over the coals in the US senate alongside McKinsey and others for not disclosing the details of their involvement in Saudi Arabia’s sports ambitions. And now, in an interview with the Age, Tiley has dismissed the notion of the Premier Tour proposal as being a confrontation with Saudi Arabia over control, and noted that the two parties had already engaged in discussions.
Combined, the two proposals together bear all the hallmarks of a classic BCG or McKinsey pitch; focus on the core value-generating product, strip out the fat, bring in high-level private investment. The fingerprints of the third of the so-called ‘MBB’ trio of US management consulting giants – Bain & Company – can also be seen on the blueprints for upheaval, with Tennis Australia chair Jayne Hrdlicka having led the initial presentation to ATP and WTA representatives alongside Sherr.
Indeed, in addition to Hrdlicka – a former Bain senior partner – the TA board and executive is stacked with consultants, including recently appointed director and three-decade Bain veteran Chris Harrop, who sits alongside one-time McKinsey partner Graham Bradley and Grant Thornton director Diane Grady, also a former McKinsey partner. Meanwhile, TA’s chief commercial and strategy & performance officers Cedric Cornelis and Tim Jolley are also Bain alum.
Speaking on the potential for Saudi funding into the proposed Premier Tour, Sherr said: “As of today, we’ve had no conversations with any external entities about funding the initiative. We’re not there yet. Saudi Arabia’s interest in the sport is indicative of the popularity of our game. Our focus is going to be on, ‘What’s the best long-term solution and model for sports?’ So we’re not excluding anything, we’re not including anything as predetermined.”
