The Lawn Tennis Association, the national governing body for tennis in Great Britain, recorded an operating profit of £8.7m ($10.64m /€9.68m) in 2019, but has warned that the Covid-19 pandemic could impact future revenues.
LTA Group revenue stood at £77.3m for the financial year ended December 31, 2019, surpassing the £64.5m the organisation generated in revenues in 2018 when it declared a £6.3m loss.
This year’s accounts represent the first time the organisation has registered a positive income in four years, thanks mainly to the strong commercial performance of last year’s Wimbledon Championships.
More than 60 per cent of the LTA’s revenues are derived from a 40-year agreement with the Wimbledon organiser, the All England Lawn Tennis & Croquet Club (AELTC), which started in 2013 and entitles the LTA to 90 per cent of the surplus generated by the grand slam tournament.
In 2019, the AELTC shared nearly £52.1m with the LTA – a figure comprised of a gross surplus of £45.7m, a payment of £5m for the LTA’s support of the summer grass court season, and £1.4m for the management and supply of umpires and officials for the Wimbledon Championships.
The LTA said in its annual report: “The increase in the distributable surplus in 2019 was as a result of an improved financial performance at the 2019 Championships, in part linked to the completion of the roof on No.1 Court which had reduced the surplus over the past number of years.”
However, the organisation warned that the Covid-19 pandemic presented a risk to future income. This year’s Wimbledon Championships were cancelled as a consequence of the crisis, although it was subsequently revealed that event had taken out business interruption insurance including pandemic cover.
The organisation said: “The impact of the Covid-19 pandemic presents a business risk however the LTA maintains adequate cash balances and reserves to mitigate the potential short-term financial impact of this risk.”
The latest accounts reveal the LTA has boosted its reserves to £75.2m and holds £175.8m in equity. In spite of its strong cash position, it opted to avail itself of the UK government’s furlough scheme, which offers to pay 80 per cent of workers’ salaries during the Covid-19 lockdown.
The LTA’s own commercial activities produced £6.06m in revenues, a slight increase on the £5.48m generated in 2018, thanks to new sponsorship deals with Oppo and Amazon. The organisation has pre-existing sponsorship deals with Fever-Tree, BNP Paribas, Nature Valley, Weston Cider, adidas and Nyetimber.
Revenue from Major events increased from £14.3m to nearly £14.7m, in spite of having to pay refunds totalling £0.8m for rain-affected days at last year’s Fever-Tree Championships at The Queen’s Club, and the Nature Valley Open at the Nottingham Tennis Centre.
The LTA said revenues derived from other events, including two home Federation Cup ties held at Bath University and London’s Copper Box Arena, helped to offset the refunds.
The organisation received a further £2.5m of funding from Sport England, the UK public body that exists to encourage people to play sport – the second payment due to the LTA under their current four-year agreement, which began in April 2017.
Other revenue of £2m was derived from the LTA’s British Tennis Membership Programme, coaching courses, other grants, income from the LTA’s National Tennis Centre in Roehampton and programme funding.
Operating expenditure at the LTA Group was £72.9m, up from £70.8m in 2018, which the organisation attributed to increased funding to support its performance programme and increased spending on major events.
The LTA spent £13.46m overall on the performance programme in 2019, up from £10.07m in 2018, after it launched a new 10-year strategy to address the shortage of high-potential British juniors making the grade in the top 100 of the ATP and WTA Tours.
It invested a total of £27.15m organising major events, a figure that significantly outstripped the £14.7m these events generated.
Meanwhile, £17.2m was spent putting on seven tournaments across the country during the year while a further £10m was invested in the two home Federation cup ties, the Davis Cup finals in Madrid, the Nitto ATP World Tour Finals, officiating at the Wimbledon Championships and other Major Events including eleven International Pro Series events and seven disability events.
Participation expenditure on a range of initiatives including clubs, volunteers, communities, education, disability coaching and competitions accounted for £16.2m of expenditure.