- Player board representatives voted not to renew Kermode’s contract
- Outgoing executive chairman & president defends record pointing to prize money increases and travel grants in lower tiers
- Players council voted to launch ATP Cup instead of partnering with ITF to create team event
Judged by the standards of most sporting organisations, the ATP Tour appears to be a model of democracy. Its board of directors, made up of three player representatives and three tournament organisers, overseen by executive chairman & president Chris Kermode, is designed to carefully balance the welfare and needs of the tour’s athletic talent with the commercial demands of those who provide them with a platform to play.
Look a bit closer, however, and you see that like many a system established with the best of egalitarian intentions, this governance structure isn’t immune to the bizarre caprices of its voters. A prime example was the surprising decision the ATP Board took at the Indian Wells tournament in March not to renew Kermode’s three-year contract.
With just sixth months of his current tenure to go, the decision puts Kermode in a strange state of limbo. The resignation in May of Justin Gimelstob, the player representative who was thought to have led the calls for his departure, looked like it might clear the way for the board to reverse its decision. If Kermode is holding out hope for a further three-year extension, he makes it clear he is in no mood to beg.
“People have asked, if I would put myself back into the mix and my answer is that the board know where I am,” he tells SportBusiness. “There was a decision taken by the board in March in Indian Wells not to renew, and I respect that decision and the process. I’m really fully focused on continuing to the end of the year.”
Kermode’s detractors, who are thought to include world number one Novak Djokovic, argue that he put the needs of tournament organisers ahead of the players during his time with the organisation and that he offered little financial support to those battling it out in the lower tiers of professional tennis.
“I never really understood that,” he says. “The tour is financially stronger than it’s ever been. The commercial revenues have increased more than 100 per cent since 2008 [from $61.3m (€64.3m) in to $144.4m in 2018] and prize money will almost be $139m in 2019 [versus $64m in 2008], which again is over a 100-per-cent increase since 2008.”
Narrow the figures down to Kermode’s 5-year tenure and prize money on the ATP Tour has increased by 62 per cent. To the argument that not enough of this money is reaching the lower rungs of the game, he points to a 45-per-cent increase in the pot at the lower level ATP Challenger Tour in the last five years and the mandating of free accommodation at these events to reduce the costs faced by players. Under his leadership, the Tour has also started to offer travel grants to players ranked between 151-300 in singles, and between 75 and 150 in doubles, to help them work their way up the professional ladder.
“There’s no question that the income distribution in professional tennis is heavily weighted from top to bottom and it’s something that we are in the process of looking at and addressing,” he says. “The prize money increases which have been directed towards the first rounds, and qualifying rounds, not only at Grand Slams in recent years, but also at the ATP Masters 1000s and ATP 500s are a reflection of that. For instance, this year, the qualifying rounds at Masters 1000s and 500s have gone up by approximately 80 per cent compared to last year.”
Should the board not decide to reverse its decision, Kermode will leave during one of the most transformative phases in the ATP Tour’s recent history. After 12 extremely successful years at London’s O2 Arena, the tour’s headline event, The Nitto World Tour Finals, will move to Turin from 2021 until 2025. January next year also sees the launch of the ATP Cup in Perth, Australia, a new national team event that poses a direct threat to the International Tennis Federation (ITF’s) Kosmos-funded Davis Cup revamp.
He maintains that the decisions regarding both events were also taken with the player’s interests in mind. In the case of the ATP Cup, he says the organisation had parallel discussions with the players at Wimbledon last year in which the tour advanced the idea of the new event alongside the alternative of a joint team event with the ITF. It is claimed the player council voted for the ATP Cup, because, by the very nature of the ATP constitution, they will own 50 per cent of the new event. Kermode argues that this makes it more likely that the leading players will decide to play in the ATP event rather than the Davis Cup because the proximity of the two tournaments in the calendar will make it difficult to play both.
“I’m very confident that a huge majority of players are going to play the ATP Cup because they said they wanted it, they’re a part of it, they are a 50 per cent owner of it,” he says.
“The big thing for us was if we’re doing new events, what we didn’t want to do is create additive events because the calendar is quite full. We start in January and finish in November at the [Nitto ATP Finals] at the O2 [Arena]. If you start putting in big events throughout the calendar, players can only play so much and will then choose to not play something else.”
To understand how likely it is that the players will have signed up for the ATP event by the September 13 deadline for entries, it’s important to understand the stake they have in its success and the way revenues are distributed throughout the ATP Tour. Any commercial surplus at the organisation is divided up between its tournaments and players – in the latter case in the form of prize money and an equal pension contribution to the top 125 singles players and the top 40 in doubles.
“We’ve reduced the number of minimum years of credit required to qualify for the pension from five years to three, meaning that many more players will be able to reap the rewards of the pension than previously,” says Kermode. “The player pension contributions in 2018 reached a record $64,000 per player – a growth of more than 300 per cent in the last 10 years.”
If the players’ motives prove to be less altruistic, they will also have to weigh the $20m prize pot being offered by the Davis Cup against the $15m to be won at the ATP Cup. The ATP Tour is also able to promise 750 ranking points to the winner of its event where the ITF is not.
Although Kermode says the ATP “will continue to work closely with the ITF across a number of different areas in the sport”, the chances of any compromise between the two organisations looks remote, now that the ATP has aligned itself so closely with Tennis Australia. The national federation will lead sponsorship sales for the new event – which will take place in Perth as a lead-in event to the Australian Open – once the ATP Tour’s existing partners have been offered the rights. Under the agreement, the federation is paying a “sanction fee” to the ATP and will take on responsibility for delivering the event and paying the $15m prize money. Kermode says it will be entitled to all of the revenues up to the point where it crosses a certain threshold. After this, revenues are shared with the ATP. “It also allows us to partner strategically with a Grand Slam,” says Kermode. “Tennis Australia have got a good history; they’re tried and tested.”
The tour’s host broadcaster and media agency ATP Media will lead global sales of the media rights to the tournament.
“In terms of broadcast deals, we’ve secured agreements which provide huge exposure across all of North and South America, Africa, the Middle East, Asia, the majority of Europe,” says Kermode. “We’ve got free-to-air coverage in quite a few areas, including Japan, China, the Middle East, and the levels of media rights that we’re in discussion with many broadcasters about, I think, reflect how important this event is going to be.”
But for the time being, the ATP Tour’s golden goose will continue to be the season-ending ATP Finals. For this reason, the decision to move the event to Turin was a difficult one.
“There was a broad conversation – almost a philosophical conversation – about moving or remaining in London,” he says. “There were two schools of thought. One was that the event has historically moved around the world, the first one being in Tokyo, and it then did a long stint at Madison Square Gardens in New York. From then on it moved around to numerous locations. There’s another school of thought that said for an event to be successful it needs to build roots in certain places.
“It was not a decision we took lightly by any stretch of the imagination, because with our partners AEG at the O2 it has been the most successful indoor tennis event in the world ever.”
Kermode says he knew to expect “offers from various regions in the world” that would be more lucrative than the one from London, but that he was surprised to find two European bids at an equal level. Given that the ATP’s shortlist consisted of Singapore, Tokyo and Manchester alongside Turin and London, it’s not difficult to ascertain which cities he is talking about. As reported by SportBusiness at the time, Turin won because it was able to provide stronger financial guarantees than the London bid, which was subject to fluctuations in the sponsorship market.
The winning package, put together by the Italian Tennis Federation and Sport e Salute SpA in partnership with the Italian Government, is reported to be worth £65m (€75m/$84.7m) over the five-year contract. This will allow the prize purse for the event to increase from the £9m (£6.95m/€8m) paid by London last year to a record $14.5m (£11.2m/€12.93m) for the first event in Italy.
Aside from these prize money increases, Kermode says he would like to be remembered for promoting the next generation of players through the 21-and-under Next Gen ATP Finals which launched in 2017. He says the series, which was developed to prepare the protect the sport against the inevitable drop in interest when players like Federer and Nadal retire, has succeeded in bringing these players through.
“Where I’m just so confident tennis will still retain that level of interest is that the Next Gen players that are coming through are really exciting, different personalities,” he says. “They all play different styles of tennis and they’re also from a geographically diverse spread across the world, you’ve got players coming from Australia again, and the States – we’ve always had Europe – and you’ve got South Americans, you’ve got Asians.”
Kermode would also like to be recognised for eliciting one of the first media partnerships with Amazon and points out that the tech giant’s involvement with the Tour began with the first Next Gen Finals in 2017.
“I’m proud that the ATP has been at the forefront of innovation in the sport. We’ve since built a much wider partnership with Amazon for the ATP Tour rights, and they’ve subsequently added the US Open as well as the WTA rights to that. In more general terms, I believe that one of our advantages is the level of content the ATP Tour is able to offer for 11 months of the year and I believe that was a compelling proposition for them.”
Perhaps the next crop of talent that he so readily promoted will have more of an appreciation for these achievements than the current one. As Kermode says, the ATP Board knows where he is.