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Home / Opinion / Views /  Mint Explainer: Federer exit is bad—and good—for the business of tennis

Roger Federer has signed off, and injury-prone Rafael Nadal, too, seems to be riding into the sunset. With the two legends, unarguably the two biggest crowd-pullers in tennis, on their way out, it may be a crisis for men’s tennis in the near term, with sliding television ratings, thinning crowds at tournaments, and dwindling sponsor interest in the sport. But, as the world’s unrelenting focus on Federer and Nadal shifts, it’s also an opportunity to reform the men’s professional tour, helping new stars emerge at the grassroots and making it more rewarding for the lesser-known players.

How Federer and Nadal earn from tennis

Roger Federer lived life king-size as a tennis professional. The lion’s share of his fortune came from endorsements and prize money, with mega deals with Uniqlo, Credit Suisse, Rolex and Mercedes Benz, et al. A 10-year contract with Japanese apparel brand Uniqlo in 2018 is alone worth a hefty $300 million. Indeed, Federer is one of the world’s wealthiest athletes, sharing the podium with the likes of Michael Jordan, Lionel Messi and Lewis Hamilton. Federer has earned an additional $115 million from playing tennis, and his net worth is estimated at about $550 million.

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'King of Clay' Nadal is also a top draw with sponsors, and his net worth is estimated at about $220 million. He has big brands like Kia and Nike in his kitty. And he has also earned about $131 million, the most after Novak Djokovic, as a professional tennis athlete.

The business of tennis is all about just a few top players.
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The business of tennis is all about just a few top players.

The Pied Pipers of tennis

Federer and Nadal have been the Pied Pipers of tennis, with a massive fan following across the world. They are the top draws at tournaments, and organizers at tier 2 and tier 3 events are often willing to fork out big amounts to persuade them to put in an appearance.

The Fab 3–Federer, Nadal and Djokovic–earn fat appearance fees from tournament organizers over and above endorsements and prize money. Federer and Nadal can command an appearance fee of up to $2 million. Celebrity players very often don’t have compelling reasons to show up at the second-tier ATP 250 and ATP 500 events. Their performance at the top-flight events, including the Grand Slams and Masters, fetch them enough ranking points to stay at the top.

Business of tennis revolved around the Fab 3

For smaller tournaments, an appearance by Federer or Nadal means higher TV ratings and larger crowds, helping them make bigger profits.

Even at the Grand Slams, Federer, Nadal and Djokovic get top billing, with primetime slots on the court, which has often been resented by other players. In 2018, for instance. France’s Julien Benneteau sparked off a big row at the Australian Open by alleging that the tournament gives preferential treatment to Federer while scheduling matches. Tournament director Craig Tiley riposted that Federer remains one of the biggest “box-office athletes", and his matches just have to be aired on prime time. “The fans demand his appearance in the big stadiums, and our broadcasters naturally want his matches to be aired in prime time. I don’t think there’s a tournament director in the world who’s not going to take those factors into account when setting the schedule," Tiley said.

In fact, tournaments have very often been all about Federer or Nadal. Some experts even believe court surfaces at tournaments have often been standardized to help these dominant players. Here’s what Gabriel Jaramillo, former coach of Maria Sharapova and Monica Seles, had to say: “If the surface had been too fast, there was a risk of Rafael Nadal’s premature exit… if the ground had been too slow, Roger Federer might have been in trouble. The idea was that they could face each other frequently. It was the only way to keep people glued to the television."

A crisis as well as an opportunity

Federer’s retirement, and the inevitable retirement of Nadal, could prove to be a setback for the men’s tour in the near term, but the end of the era of the Fab 3 and the world’s obsession with them is an opportunity as well. It’s an opportunity for the sports governing bodies–the ITF and ATP–to strengthen the game at the grassroots and make it more representative.

In recent years, many professionals have found it unsustainable to keep competing in professional tennis and were forced to retire early. Remember, unlike team sports like basketball and soccer, tennis players are not guaranteed contractual salaries but live off their prize money earnings. For the lower-ranked players, it’s very often a pittance.

The ATP distributes more than $150 million in prize money in a year, but most of it flows to top players. ATP chairman Andrea Gaudenzi believes there should be more money on offer for players who lose early in competitions so that more professionals can sustain a living from tennis. It will help the tour become more popular and representative, with more stars emerging at the grassroots level. More sponsorship money can also perhaps be funnelled into the Challenger tournaments. As Federer and Nadal sign off, it’s an opportunity to reform tennis, making it more rewarding for more players.

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