Tennis pins its hopes on a Netflix renaissance

Fun fact: the US newsroom of the Financial Times sits across the street from the construction site of what is slated to be Disney’s New York headquarters, a mammoth, forest-green panelled edifice slowly but surely taking shape in Soho. Last summer, before the window fittings were installed and the skeleton of the building was still visible, someone had etched the words “Welcome to the Mouse House” into one of the west-facing steel beams.

It’s a message that’s not exactly being extended to activist investor Nelson Peltz, who kicked off his 2023 with a strident campaign against Disney. He’s pushing for a board seat, as well as material improvements on succession planning, return of the dividend, and a rethink on streaming. It’s likely to be one of the most high profile corporate sagas of the year, and one with potential consequences for the sports industry (Disney owns sports rights mega-holder ESPN, for one thing). Take a deep dive with our FT analysis here, and stay tuned for a bumpy road ahead.

Do read on — Sara Germano, US sports business correspondent

Tennis’s drive to serve-ive

It’s a new year, and tennis is back in a big, and very different way.

Perennial champions and top-ranked players Serena Williams, Ashleigh Barty and Roger Federer took their curtain call last season. Former world number one Naomi Osaka announced her pregnancy this week, shutting down her 2023 season before it even began. And with the Australian Open — the first slam of the year — set to begin on Sunday, marquee tennis will be back in the spotlight.

There have long been questions about how tennis can better optimise its operations — might the men’s and women’s tours, the ATP and WTA, join forces? Would private equity take stakes in either independently? But putting those considerations aside, tennis yesterday became the recipient of the ultimate status symbol in modern sport: a reality show-cum-documentary multipart series on Netflix.

Break Point, whose first five episodes dropped on Friday, features up-and-coming tour players including Italy’s Matteo Berrettini, Australia’s Nick Kyrigos, Ons Jabeur of Tunisia, and more over the course of the 2022 season. It is the conceptual sequel to Drive to Survive, the smash hit Formula One series which revolutionised the sport’s profile and brought throngs of new fans to motor racing, especially in the US.

Behind the documentary is a calculated effort to promote the sport of tennis, much in the same way Drive to Survive popularised F1. With Williams, Federer and a handful of other stars hogging the spotlight for so long, tennis needs the chance to showcase youngsters — like Canada’s Félix Auger-Aliassime, just 22 — to make it relevant and compelling to new viewers. Indeed, that’s the topic of FT Weekend’s big essay.

For Netflix, tennis is the next step in its evolving approach to sports, with further Drive to Survive clones in the pipeline, including Full Swing — its look at the PGA Tour — slated to debut in February.

There are other promising figures for the sport. This week, the US Tennis Association reported a nationwide increase in tennis participation by more than 33 per cent since the start of 2020, with nearly 24mn players across the country. At the same time, financial interest in the tennis-adjacent sport of pickleball has skyrocketed, with franchises in the nascent Major League Pickleball pro league selling for roughly $1mn apiece, according to a person familiar with the matter. Whether the two sports, with elite and recreational participants, grow in tandem or at the expense of one another remains to be seen.

In the meantime, the departures — temporary or otherwise — of tennis’s top stars creates the perfect timing for the debut of Break Point. If a new generation of fans come to the sport through reality programming, there’s rarely been a better time in tennis history for a breakthrough star.

Why Qatar needs the Premier League

Qatar Sports Investment has set its sights on the English Premier League. The state-backed fund, which owns Paris Saint-Germain and a slice of Portuguese title challengers SC Braga, wants to get a piece of the richest league in football, and has been eyeing up a potential investment in Tottenham Hotspur. QSI is also talking to outside investors about selling a stake in PSG itself, with a mooted valuation of over €4bn.

Which is the better bet, PSG or Spurs? According to Football Benchmark, the two clubs should garner a similar valuation — it gave the French club a roughly 10 per cent premium over the London side in its annual enterprise value estimates last year.

Spurs have a few important attributes that PSG lacks. For one, the club owns its new state of the art stadium, which is already bringing in extra revenue through other events, such as hosting some of the NFL’s international fixtures, boxing matches, and some big music acts including Lady Gaga. PSG, meanwhile, rents from the Paris government, and is threatening to leave the Parc des Princes unless it can buy the ground and expand it.

Premier League broadcast revenues are far higher than those in the French league too. Anyone looking to build long-term football investments will want exposure to that income stream. From a soft power perspective, Qatar will want to keep pace with its neighbours Abu Dhabi and Saudi Arabia, who both have teams in English football.

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Recent experience suggests that Spurs is also a pretty tightly run ship. The club’s wages to revenue ratio in 2020/21 was 57 per cent, according to Football Benchmark, putting it on a par with clubs in Germany and Portugal, and well below the levels typically seen in the Premier League.

That same year, PSG’s wages to revenue ratio was 88 per cent, one of the highest in football. Since then, the number has shot up. Last season, with the arrival of Lionel Messi and contract renewal of Kylian Mbappe, wage costs soared 45 per cent, taking the wages/revenue ratio to 109 per cent and pushing the club to a post-tax loss of €369mn.

But PSG has its own advantages too. It has a captive market in one of the world’s most desirable cities — while Spurs has to compete with a long list of London rivals. PSG’s near total dominance of the French league in recent years effectively guarantees Champions League qualification, something most English clubs battle hard to achieve every season in an increasingly competitive league.

Thanks to its long-term partnerships with retailer Fanatics and Nike’s Jordan subsidiary, PSG has also morphed into a global luxury sportswear brand rather than just a football club. How many other European teams could justify a flagship clothing store on New York’s Fifth Avenue?

It’s easy to see why Qatar would want to buy into the Premier League, perhaps the bigger question is why it has taken so long. With the World Cup now out of the way, and a number of EPL assets on the block, it looks to be only a matter of time before Qatar gets its foothold.

Book now for the FT’s Business of Football Summit: You can join La Liga President Javier Tebas, new AC Milan owner Gerry Cardinale, super agent Rafaela Pimenta and more at the Business of Football Summit on 1-2 March to discuss the new wave of investment flowing into the game. As a Scoreboard subscriber, you can register for your complimentary digital pass using the promo code PREMIUM23, or save £200 on your in-person pass to join us at The Biltmore Mayfair, on March 2. Register here.

News Roundup

• WWE appointed investment bank Raine to look at strategic alternatives for the wrestling business, just a week after founder Vince McMahon returned as executive chair. NY-listed shares in WWE have risen by almost a third in the past week, giving it a market capitalisation of more than $6.5bn.

• US billionaire Bill Foley has made his second foray into European football, buying a stake in French team FC Lorient just a month after snapping up Premier League side Bournemouth.

• Damar Hamlin, the Buffalo Bills player who suffered a cardiac arrest on the field on January 2, was discharged from hospital to continue his rehabilitation at home.

• Cristiano Ronaldo’s first game in Saudi Arabia looks set to pit him against Lionel Messi’s PSG. The French club announced it would tour the Gulf later this month, which will include a friendly in Riyadh against an All-Star XI put together with players from Ronaldo’s Al-Nassr and crosstown rival Al-Hilal.

• Can India do for women’s cricket what it did for the men’s game? Watch the latest in the Scoreboard video series to find out.

Final sting

Who knew a wasp could cause so much havoc at the snooker? 🐝🤣

At least we got to enjoy Mark Williams’ dancing 🕺#CazooMasters | @WeAreWST | @markwil147 pic.twitter.com/5B5InrCrK3

— Eurosport (@eurosport) January 10, 2023

Three-time snooker World Champion Mark Williams booked his place in the semi-final of the Masters on Thursday after a thrilling victory over Ronnie O’Sullivan. But earlier in the week “The Welsh Potting Machine” had to tackle another fearsome opponent: a wasp. Williams was in control of his first round match at London’s Alexandra Palace when he was set upon by the buzzing insect. Play was stopped briefly as Williams attempted to land a kick on his attacker, before it retreated to the rafters. The Masters has a history with wasps: in 2020 a referee was stung by a yellow-and-black assailant during a match, earning him a hug from one of the players.