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The Blue Chip Standard
The tennis club no longer has to be at risk
Tim Bainton
©Tim Bainton 2016 1
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 2
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 3
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 4
Economic
Highlights/ 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 5
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 6
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 7
Key Challenges (Pro Level)
USA success at professional level in decline
©Tim Bainton 2016 8
0
2
4
6
8
10
12
1985 1990 1995 2000 2005 2010 2015
Number of Participants (Top 25 Ranking) every 5 years
Women
Men
Source: ATP/WTA
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 9
SWOT Analysis
Strengths
• 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 10
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 11
What can Clubs do Differently?
• Maximization of ancillary revenue
• Integration of operations
• Become data orientated
• External partnerships
©Tim Bainton 2016 12
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 13
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 14
Do you want to be growing?
©Tim Bainton 2016 15

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The Blue Chip Standard

  • 1. The Blue Chip Standard The tennis club no longer has to be at risk Tim Bainton ©Tim Bainton 2016 1
  • 2. 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 2
  • 3. 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 3
  • 4. 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 4
  • 5. Economic Highlights/ 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 5
  • 6. 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 6
  • 7. 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 7
  • 8. Key Challenges (Pro Level) USA success at professional level in decline ©Tim Bainton 2016 8 0 2 4 6 8 10 12 1985 1990 1995 2000 2005 2010 2015 Number of Participants (Top 25 Ranking) every 5 years Women Men Source: ATP/WTA
  • 9. 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 9
  • 10. SWOT Analysis Strengths • 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 10
  • 11. 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 11
  • 12. What can Clubs do Differently? • Maximization of ancillary revenue • Integration of operations • Become data orientated • External partnerships ©Tim Bainton 2016 12
  • 13. 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 13
  • 14. 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 14
  • 15. Do you want to be growing? ©Tim Bainton 2016 15

Editor's Notes

  1. 10% of Public Tennis facilities have closed since 2013, with an overwhelming amount struggling to stay in the Black Do you want your club to be next. Blue Chip is one of the few nationwide companies that have managed to sustain and grow public tennis clubs despite the issues surrounding it
  2. The industry of Tennis, whether measured in economic value or in terms of participation by American citizens has a significant base within the USA, but on both counts is being challenged to maintain its market share; This Presentation evaluates the statistical evidence available, historical trends and the potential critical issues it must now address to continue to hold its place in American Sport and secure a successful future. The industry of Tennis, whether measured in economic value or in terms of participation by American citizens has a significant base within the USA, but on both counts is being challenged to maintain its market share;
  3. Only explain the 9.91 million figure because of time
  4. ,
  5. Talk about Arthur Ashe and Billie Jean King, transpired the sport for civil rights and were the first major stars that championed Diversity and Inclusion. STAR POWER, Mcenroe, Connors, Evert, Agassi, Sampras, Venus, Serena, Roddick for a short time and now nothing. Although there is hope with a slew of young talent. Tennis needs to be cool, it needs to be on the front page of the New York Times and on Sports Center top ten every night and not just during a major. We currently have the four greatest male players of all time playing in the same generation yet how many Americans can name then let alone idolize them or have posters on their bedroom walls. Instead it is Lebron, Steph, Bryce and Tom.
  6. I am fortunate to be privy to real data from multiple clubs nationwide because of my line of work. Many of these clubs if not all are suffering from the same issues that the club I chose for my Case Study. Read Slide
  7. Explain that this is an overview of the Industry with a view to invest
  8. Explain the Dinosaur nature of the sport and relate to the dinosaur nature of the clubs. Tiered membership (Target 18-24 Aged Group, links with Education Establishments to transition this group); Maximization of ancillary revenue; Utilize social media outlets to reach potential audience; Marketing of special guest fee structure (lower cost of entry to potential members); Referral programs that entice.
  9. Integration of Back-Office with Tennis team. All employees part of one team and customer focused; Improve management techniques plus quality data that identifies court utilization, daily revenue stats, membership changes etc.; Measures to improve staff quality and focus. In a service business key asset is your employee base; External Partnerships (Key tennis manufacturers, key local employers etc.).
  10. Make tennis attractive again Compete with team based sports Improve spectator experience and inclusion Improve standard of teaching professionals USTA invest: Community Programs Player Development (New Florida Facility)
  11. Ensure Diversity and Inclusion, USTA view :- “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. USTA engage with Public/Private sector to increase/improve tennis facilities.
  12. Despite all the failings of tennis and the negative trends @ Blue Chip we have gone from revenues of 120K to 6.4 million since 2007. Our systems work and they can for you also. Questions ?