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Speaker 1: This is Bloomberg Law with June Brussel from Bloomberg Radio.

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Speaker 1: Nineteen shots in the longest rally of the match so far,

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Speaker 1: Djokovic instantaneous decision to let that ball go, and it

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Speaker 1: was the right one. As the number one tennis player

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Speaker 1: in the world, Novak Djokovic has certainly made a lot

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Speaker 1: of wise decisions on the court, but now he's making

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Speaker 1: a decision off the court that many questions. Tennis has

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Speaker 1: a global fan base numbering more than a billion people,

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Speaker 1: and its superstars are among the best paid athletes anywhere.

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Speaker 1: As a business, though, tennis is an underachiever, bringing in

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Speaker 1: less media money than cricket and leaving many elite athletes

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Speaker 1: with lower rankings struggling to earn a living, like Tara Moore,

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Speaker 1: who has been ranked as high as number one in

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Speaker 1: the world. Being the rank thing that I am, now

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Speaker 1: you definitely not earning money of spending your own money.

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Speaker 1: We have to coach a lot of the times outside

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Speaker 1: of a tight tournaments, so not only we be training

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Speaker 1: every single day for five, six, seven hours, but we're

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Speaker 1: also coaching on talk about just to be able to

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Speaker 1: travel to these tournaments. Frustrated with the slow pace of

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Speaker 1: change in elite tennis. Djokovic has formed a breakaway group

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Speaker 1: of male tennis players that looks a lot like a

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Speaker 1: union to change things. Joining me is Bloomberg Legal reporter

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Speaker 1: David Yaffee Bellany. So, David tell us what happened one

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Speaker 1: afternoon in late August at the US Open. So on

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Speaker 1: that way, August afternoon, and two of the top players

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Speaker 1: in men's tennis, no Vak Djokovic, h's the number one

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Speaker 1: player on the planet, and a kind of lesser no

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Speaker 1: Canadian player, Mathi Pospisal, deaned a meeting in the mostly

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Speaker 1: empty Grandstand Stadium at the US Open for about eighty

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Speaker 1: of their colleagues. That we're talking about eighty of the

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Speaker 1: best men's tennis players in the world who were gathered

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Speaker 1: there for the US Open which was about to start,

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Speaker 1: And the purpose of the meeting was to gauge in

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Speaker 1: trees in forming essentially a union, though it's not technically

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Speaker 1: a union, a group of players that could go to

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Speaker 1: kind of the governing bodies of tennis, go to the

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Speaker 1: people who run individual tournaments and negotiate with them for

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Speaker 1: greater prize money, you know, first spacing tournaments out on

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Speaker 1: the calendar in different ways for kind of negotiating on

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Speaker 1: all sorts of the issues that tennis players care about.

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Speaker 1: So the idea was to kind of formed this players

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Speaker 1: association that would have more more leverage in approaching tournaments

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Speaker 1: with certain demands. Did the group get any blowback from

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Speaker 1: the Association of Tennis Professionals that runs the Men's Tour

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Speaker 1: they did. I mean, at that meeting itself, while they

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Speaker 1: were sitting in Grandstand Stadium discussing the prospect of a

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Speaker 1: player association, virtually everyone there received the same text message

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Speaker 1: from the e t P that was essentially a warning

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Speaker 1: not to do this. You know, it's that this player

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Speaker 1: association won't have any real power. You never know what

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Speaker 1: it's long term impact could be on the tennis ecosystem.

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Speaker 1: You know, don't do this. Don't a breakaway association. And

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Speaker 1: it's worth understanding that the way the a t P

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Speaker 1: is structured, it's a partnership between players and tournaments. So

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Speaker 1: there's a board that runs the circuit of events, the

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Speaker 1: a TP Board, and as three player representatives and three

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Speaker 1: tournament representatives and a chairman who can kind of break

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Speaker 1: the tie if they are disputes. So the sport has

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Speaker 1: run through this partnership between labor and management, and essentially

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Speaker 1: what the players were proposing is let's start our own group,

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Speaker 1: representing labor on its own, and that will give us

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Speaker 1: more leverage, you know, we can insist some certain things

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Speaker 1: and threatened to boycott if we don't get locked. So, yes,

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Speaker 1: the backlash from the e TP was immediate. There's also

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Speaker 1: backlash from other players on the tour who disagreed with

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Speaker 1: the strategy. So Djokovic was spearheading the breakaway group, but

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Speaker 1: his two main rivals, Roger Federer, Rasa and the doll

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Speaker 1: immediately distanced themselves that they wanted nothing to do with

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Speaker 1: this new group and that the pandemic was the wrong

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Speaker 1: time to seek this kind of structural overhaul. Let's step

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Speaker 1: back for a minute. Tell us where tennis fits in

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Speaker 1: the world of sport. It's as far as money and

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Speaker 1: media attention. So one of the things that's striking about

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Speaker 1: tennis is that it's one of the most popular sports

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Speaker 1: on the planet. I mean, you can look at different metrics,

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Speaker 1: but it's often listed as the fourth most popular sport

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Speaker 1: by number of fans. You know, it has more than

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Speaker 1: a billion people described themselves in some folds of tennis fans,

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Speaker 1: but in terms of the amount of money it generates,

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Speaker 1: in terms of the share of the TV rights pie

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Speaker 1: that it controls, it underperformed. The value of the TV

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Speaker 1: rights to tennis tournaments is lower than the value of

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Speaker 1: rights for sports with your fans, like golf, hockey, cricket

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Speaker 1: even and so you end up in a situation where

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Speaker 1: there's this kind of disconnect between how popular the sport

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Speaker 1: is and how successful it is. We hear about the

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Speaker 1: huge amounts of prize money and endorsements that tennis players get.

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Speaker 1: The highest paid female athletes last year was a tennis player,

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Speaker 1: But you write that player is good enough to win

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Speaker 1: matches at Grand Slams struggle to support themselves on their

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Speaker 1: tennis earnings. So if you're a top tennis player and

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Speaker 1: you're a huge commercial superstar, you know you can land

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Speaker 1: a sponsorship deals with role a search lets and appear

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Speaker 1: in TV commercials and get paid tens of millions of

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Speaker 1: dollars every year. But that's only true of a very

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Speaker 1: small handful of tennis players. Once you go outside the

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Speaker 1: top fifty in the world, and even more so, once

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Speaker 1: you go outside the top hundred, you've got tennis players

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Speaker 1: who are taking postmates shifts to make extra money, who

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Speaker 1: are getting part time sales jobs to generate income because

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Speaker 1: they can't survive on their tennis earnings. And there are

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Speaker 1: a few reasons for that. One is that the overall

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Speaker 1: size of the prize money pie that goes to players

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Speaker 1: didn't as big as it could be. Tournaments could devote

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Speaker 1: a greater share of their revenue to prize money, and

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Speaker 1: the sport as a whole could do better monetizing itself

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Speaker 1: so that the source for that prize money is larger.

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Speaker 1: That's sort of a big problem for players, especially lower

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Speaker 1: in the rankings, who are relying almost entirely on the

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Speaker 1: money they earned from some winning matches to survive. Are

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Speaker 1: of players in this new group concerned about how much,

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Speaker 1: or rather how little the lower ranked players are making. Yeah,

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Speaker 1: so in that group, you had a mixture of players

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Speaker 1: who are from the lower ranks of tennis and they

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Speaker 1: struggled financially throughout their careers. And it's worth remembering these

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Speaker 1: aren't random amateurs. This is like, you know, the hundred

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Speaker 1: and tenth best tennis player on the entire planet. I mean,

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Speaker 1: compare that to you know, a major American sport like basketball.

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Speaker 1: The hundred and tenth best player in the NBA, and

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Speaker 1: it's not a perfect comparison, but the hundred and tenth

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Speaker 1: best player in the NBA is making a huge salary

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Speaker 1: and appearing on ESPN all the time and potentially getting

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Speaker 1: endorsement deals and that sort of thing. But you know,

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Speaker 1: if you're at a similar level in tennis, you really

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Speaker 1: don't get the sorts of opportunity. So yes, in that

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Speaker 1: group at the US Open, you had some players from

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Speaker 1: the lower ranks who are concerned about their ability to survive.

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Speaker 1: You had top level players, some of whom are sort

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Speaker 1: of empathetic to those lower ranked players, either because they

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Speaker 1: are friends with people in that group or they came

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Speaker 1: up through the ranks themselves and who also care about

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Speaker 1: these sorts of issues. And they're also top players who

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Speaker 1: kind of have their own sets of concerns that overlap

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Speaker 1: with the concerns low ranked players. You might be ranked

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Speaker 1: twenty five in the world and you know, make a

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Speaker 1: ton of money, but feel like if the sport were

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Speaker 1: better run, you could make even more money. You know,

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Speaker 1: you've got a short career. You want to make sure

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Speaker 1: that you monetize your playing years to the greatest extent

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Speaker 1: possible and capitalize on that opportunity. And so there are

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Speaker 1: top players who have back concerned. There other top players

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Speaker 1: who just feel like the players should generally have more

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Speaker 1: of a voice than how the sport has run. They

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Speaker 1: should have better input into the scheduling of tournaments. There

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Speaker 1: should they think there should be better communications between the

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Speaker 1: executives who run centers and the players who appear at

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Speaker 1: those tournaments. All those sorts of concerns came to a

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Speaker 1: head during the pandemic as tournaments were canceled and there

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Speaker 1: was kind of a breakdown and communication between the top

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Speaker 1: grass and the players. Describe the fractured governance of professional tennis, Yeah,

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Speaker 1: so it's kind of an alphabet soup of three letter

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Speaker 1: acronym that it's difficult to keep straight. Even if you're

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Speaker 1: a fan of the sport. You've got the four Grand

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Speaker 1: Slam tournaments, the US Open, the Australian Opens, and the

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Speaker 1: Friends Open, which are what most people who follow tennis

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Speaker 1: casually are aware of. Their the biggest money making events,

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Speaker 1: the kind of star and making machinery of the sports,

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Speaker 1: and they get the best TV coverage. But most of

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Speaker 1: the year, the men are playing a circuit of tournaments

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Speaker 1: called the e t P, the Association of Tennis Professional

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Speaker 1: The women are playing in the w t A, the

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Speaker 1: Women's Tennis Association. And then there's a third governing body

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Speaker 1: called the i t S, the International Tennis Federation, which

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Speaker 1: supervises its own stead of tournaments. So all of these

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Speaker 1: different governing bodies have their kind of own little piece

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Speaker 1: of the tennis ecosystem that they control. They're often competing

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Speaker 1: with each other for premisee, they're working across purposes. Historically,

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Speaker 1: they've but it heads with each other on all kinds

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Speaker 1: of issues, and this is one of the reasons that

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Speaker 1: the TV value of tennis is so much lower than

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Speaker 1: it than it could be, because all of these different

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Speaker 1: entities are telling TV rights separately in small packages, rather

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Speaker 1: than consolidating it together into one extremely attractive package that

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Speaker 1: you could market the way that the NFL market self.

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Speaker 1: But every time there's been a proposal to try to

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Speaker 1: unify tennis, it's gone nowhere. There's always a problem. There's

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Speaker 1: always a problem. I mean, the back room politics of

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Speaker 1: tennis are incredibly nasty. I think that's something that people

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Speaker 1: who fall the sport casually don't realize. You know, I

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Speaker 1: quote someone in the story saying everyone distrusts everyone else.

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Speaker 1: All of these different factions have their own priorities, and

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Speaker 1: they're constantly working at cross purposes. We had one of

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Speaker 1: the leaders that Breakaway Player Association's Assets Apostasal sort of

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Speaker 1: break down during a match in the first round in

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Speaker 1: Miami and start cursing out the chairman of the a

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Speaker 1: t P on the court on TV over a meeting

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Speaker 1: that the a t P chairman had had with the

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Speaker 1: players the previous day and which they disagreed about all

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Speaker 1: sorts of things, and people were yelling at each other

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Speaker 1: and calling each other name. That's a kind of sort

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Speaker 1: of backroom squabbling that's been so pervas of inn tennis

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Speaker 1: basically for some entire history since the sport went professional

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Speaker 1: in the early seventies, and you know, it continues to

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Speaker 1: this day and it constantly prevents change. Even the male

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Speaker 1: players and the female players are at uh. There have

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Speaker 1: been other times where they proposed mergers of the male

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Speaker 1: group in the female group and the men don't want

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Speaker 1: to equalize the prize money. Yes, so there are a

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Speaker 1: lot of issues here. Um. I think as most casual

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Speaker 1: tennis fans. Grand Slams are joint events. You've got uh,

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Speaker 1: the men and the women playing on the same court,

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Speaker 1: you know, over the same two week period, four times

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Speaker 1: a year, and it's kind of hugely attractive to fans

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Speaker 1: because you can go see Serena Williams play one day

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Speaker 1: and the Roger Federer play the next day. UM. That's

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Speaker 1: how the Grand Slams operates. The A t P and

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Speaker 1: the w t A. There are some tournaments that kind

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Speaker 1: of feature both sets of players, but they're basically where

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Speaker 1: they basically operated as separate entities, UM, which means that

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Speaker 1: they're selling their TV rights separately, UM, making all sorts

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Speaker 1: of organizational decisions sperately, and that causes some of some

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Speaker 1: of some of the chaos that's held the sport BacT

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Speaker 1: economically so for a long time, actually since the seventies, uh,

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Speaker 1: you know, various players and historically it's been what women's

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Speaker 1: players who who have driven this conversation UM have suggested

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Speaker 1: merging the tours, creating a unified governing body that runs

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Speaker 1: both the men's events and the women's events for most

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Speaker 1: of the year UM as a way to kind of

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Speaker 1: make more money ensure that women are treated the same

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Speaker 1: way men are treated and kind of boost the sports

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Speaker 1: profile overall. Um, But historically the men have opposed that proposal.

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Speaker 1: They felt that it would help them women more than

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Speaker 1: it would help them. Some men's players are kind of

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Speaker 1: reluctant to give up their spot at the top of

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Speaker 1: the hierarchy. Um. You know, I Andy Murray, the British

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Speaker 1: Wimbledon champion, went on c at M last year and said, yeah,

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Speaker 1: I've talked to some guys who you know, even if

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Speaker 1: surprize money went up from eight thousands to ten thousands

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Speaker 1: for the men and from I fell into ten thousand

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Speaker 1: for the women, they would oppose that because the prize

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Speaker 1: money was equaled even though they were getting an increase.

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Speaker 1: That's the kind of mindset that exists amongst some men's players,

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Speaker 1: and it's what's prevented the sport from doing that kind

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Speaker 1: of murder. Now. They're also all sorts of logistical details

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Speaker 1: that would have to be worked out for a murder

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Speaker 1: to happen, So you know, there are a lot of

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Speaker 1: stumbling blocks. That's certainly a kind of locker room machismo

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Speaker 1: has been one of them. Charlie Passarel, you spoke to

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Speaker 1: when He compared it to watching a soap opera because

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Speaker 1: you can tune in a year after not watching and

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Speaker 1: it's all the same thing. Yes, His point was that

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Speaker 1: the sorts of political debates that are paralyzing tennis now

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Speaker 1: are not new. They've happened in kind of endless cycles

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Speaker 1: for the whole history of the sports, and you know,

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Speaker 1: you can kind of drop in, you know, in the

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Speaker 1: mid two thousands and see what's going on, and come

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Speaker 1: back ten years later and and it's no, it's no different.

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Speaker 1: And you know, I think there's there's a lot of

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Speaker 1: truths to that, um. But also, you know, this particular

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Speaker 1: moment is different, partly because of the pandemic. There's a

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Speaker 1: kind of new push for reforms taking hold among the

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Speaker 1: players and even among senior executives in tennis, and a

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Speaker 1: feeling that the way tennis has been battered by this

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Speaker 1: crisis shows that the sport needs to change in fundamental ways.

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Speaker 1: So there's new momentum to do that. But at the

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Speaker 1: same time, these political divisions don't just disappear overnight, um.

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Speaker 1: And so we're at a kind of moment where it's

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Speaker 1: not clear whether tennis will be able to kind of

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Speaker 1: to unify and globalize behind these sorts of changes, or

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Speaker 1: whether the politics will continue to hold it back. Tell

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Speaker 1: us about the new chairman of the a t P,

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Speaker 1: Andrea Dednzy, and whether he's making some hopeful moves. So

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Speaker 1: Gudnzi took over the a t T at what in

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Speaker 1: retrospect seems like the worst possible time January. He was

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Speaker 1: on the job for only a couple of months before

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Speaker 1: the coronavirus up ended everything. And he came into that

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Speaker 1: job a really ambitious plan. Uh. He wanted to create

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Speaker 1: more unity among the kind of governing bodies, to merge

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Speaker 1: TV rights with the w t A and with the

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Speaker 1: Grand slams. Uh, sports be better monetized. He had a

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Speaker 1: proposal for a kind of prize money formula where the

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Speaker 1: amount of prize money going to players would increase, his

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Speaker 1: tournament revenue increases, which would help potentially eliminate the kind

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Speaker 1: of cycles of the divisive debates that that that the

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Speaker 1: sport often has about how much prize money should go

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Speaker 1: to players. UM. So he had this really ambitious agenda

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Speaker 1: and then the coronavirus hits and disrupt everything. Um and

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Speaker 1: you know, in some ways it's been it's been really

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Speaker 1: bad for gud Nsy because he hasn't been able to

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Speaker 1: do what he's wanted to do, and instead he's had

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Speaker 1: to basically put out fires for the last few months.

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Speaker 1: But the crisis has also kind of hammered home his

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Speaker 1: core point UH, which is that tennis is too divided

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Speaker 1: to be run effectively, that the divisions are hurting players

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Speaker 1: and holding back the sports economic growth um and to

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Speaker 1: certainly his hope would be that as the sport emerges

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Speaker 1: from the pandemic and the world hopefully emerges from the

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Speaker 1: pandemic to the next couple of months, will be a

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Speaker 1: kind of new appreciation for the sorts of changes that

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Speaker 1: he was actually talking about before any of this happened,

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Speaker 1: and that that will give him the type of political

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Speaker 1: momentum he needs to get it done. But you know,

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Speaker 1: it's it's not clear whether that optimistic UH projection will

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Speaker 1: will actually you know, turn out to be reality. It

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Speaker 1: seems like an uphill battle to get all these people

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Speaker 1: on the same page. Yeah, it's certainly going to be

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Speaker 1: a struggle. You know, there are some intennants who think

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Speaker 1: that this breakaway players association is actually exacerbating the problem.

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Speaker 1: The acronym for the players group is the P T

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Speaker 1: P A, So it's just like another combination of letters

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Speaker 1: to kind of juggle with all the others that we

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Speaker 1: already have. But you know, there are some who think

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Speaker 1: players kind of taking a stand raising the prospect of

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Speaker 1: a boycott, which is really what this group is doing

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Speaker 1: and why it's freaking out the tennants establishment because when

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Speaker 1: players get together, the fear is that they could boycott,

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Speaker 1: and that's something that no be in the sport wants

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Speaker 1: to happen. But you know, there there are some who

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Speaker 1: think that that threat is enough to kind of jerk

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Speaker 1: the A T P into action and get it to

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Speaker 1: make the types of changes that will prevent a boycott

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Speaker 1: from happening. And how many players are in the breakaway group,

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Speaker 1: it's not totally clear. You know, Djokovic and Pospisil have

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Speaker 1: talked about getting hundreds of signatures on petitions pledging support

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Speaker 1: for the group, but the group doesn't get really exists

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Speaker 1: as kind of a structured entity. Possible told me that

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Speaker 1: he and Djokovic and a law firm that they're working

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Speaker 1: with they're still putting together as the bio laws for

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Speaker 1: the group. They're currently thinking about hiring executives from outside

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Speaker 1: of Tennis to kind of run the group to day

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Speaker 1: to day, and are planning a kind of more formal

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Speaker 1: unveiling in the next few months that will kind of

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Speaker 1: establish the group with like an actual entity, and at

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Speaker 1: that point they will also continue recruiting players. It's obviously

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Speaker 1: a concern that steraing a Doll, the two most famous

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Speaker 1: men's players, are distancing themselves. I mean, it's something that

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Speaker 1: could hurt the group's ability to actually turn into something

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Speaker 1: real that can really make change in tense. Thanks David.

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Speaker 1: That's Bloomberg Legal reporter David Yaffy Beleny and that's it

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Speaker 1: for the edition of the Bloomberg Law Show. I'm June Grasso,

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Speaker 1: and you're listening to Bloomberg