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The Blue Chip StandardThe tennis club no longer has to be at risk

Tim Bainton

©Tim Bainton 2016

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Agenda • Tennis as an industry – Intro/Overview• Economic highlights/lowlights• Demographic base• Key challenges• Club tennis• SWOT analysis• What can clubs do differently• USTA actions

©Tim Bainton 2016

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Introduction

• The industry of Tennis has a significant base

• Tennis is being challenged to maintain its market share

• The issues Tennis needs to address in order to have a successful future

©Tim Bainton 2016

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Tennis - Overview• Industry valued at over $5 billion per annum

• Attracts over 17 million people

• 9.91 million core players (deceptive figure)

• 12 million play on a “intermittent” basis

• 14 million would consider taking up the game

• Out of the 72% active in sports13.5% are in racquet sports

©Tim Bainton 2016

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EconomicHighlights/ Lowlights

• 2014 tennis economy estimated at $5.7billion, increase of 3.2% from 2013

• The wholesale tennis equipment market is flat for 2013/2014, but from 2003 has seen a decrease in real terms of 10%

• Sponsorship revenue for professional tour events is down 3%

• Tournament attendance is up 1% and spectator spending is up 4%

©Tim Bainton 2016

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Demographic Base – Middle Class Affluent

•Middle class income has a direct impact on tennis growth, participation, and investment

• Household median income $100,000, individual $60,000. Heavily weighted on white middle class

• Sport needs to avoid Diversity as a barrier to entry (USTA Key Target)

©Tim Bainton 2016

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Key Challenges• Physical Activity Council (PAC) annual review shows

participation in racquet sports is flat at circa 13.5%

• 10% of public clubs in the Mid-Atlantic region closed or closing since 2013

• Nearly 60% of core players over age of 35

• Child/youth participation levels up 4% and 9% respectively

• 18 to 24 age group declining by 3%

• Senior level at 55+ age group growth at 1%

©Tim Bainton 2016

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Key Challenges (Pro Level)

USA success at professional level in decline

©Tim Bainton 2016

1985 1990 1995 2000 2005 2010 20150

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Number of Participants (Top 25 Ranking) every 5 years

WomenMen

Source: ATP/WTA

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Club Tennis – Financial Trend Case Study 2007-2015

•Membership fees increase only 0.9% per annum

•Tennis ancillary revenue reflects annual growth of 13%, Other revenue 4% growth per annum

Revenue ratio for membership/other moves from 77:23 in 2007 to 60:40 in 2015

©Tim Bainton 2016

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SWOT AnalysisStrengths

• Critical mass of players• Affluent Middle Class

demographic• Strong Grand Slam media

profile• Lifetime sport

Opportunities• Upside potential of those

wanting to play• USTA funding $100m +• Strong base at school/further

education level

Weaknesses• Limited availability of tennis

facilities• Declining USA performance in

professional ranking• Pressure on Tennis club

economics

Threats• Ranked 8th (Boys)/(7th (Girls)

against other sports• Aging demographic• Diversity and inclusion issues

©Tim Bainton 2016

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What can Clubs do Differently?

• Tiered membership

•Marketing needs to be modernized. Utilize social media outlets to reach potential audience.

• Referral programs (seems obvious, seldom exist)

©Tim Bainton 2016

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What can Clubs do Differently?

•Maximization of ancillary revenue

• Integration of operations

• Become data orientated

• External partnerships

©Tim Bainton 2016

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USTA Actions to Improve Participation

•Make tennis attractive again

• Compete with team based sports

• Improve standard of teaching professionals

• USTA invest:

• Community programs

• Player development

©Tim Bainton 2016

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USTA Actions to Improve Participation

• “Leveraging diversity and creating an inclusive environment is essential to achieving the USTA mission to promote and develop the growth of tennis”

Diversity Managers hired in all 17 Regional Sections

• Seek investment in public tennis centers (UK model)

©Tim Bainton 2016

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Do you want to be growing?

©Tim Bainton 2016