Perform makes last-ditch attempt to outbid IMG for ATP Tour betting, data rights

LONDON, ENGLAND - JUNE 23: Rajeev Ram of The United States and partner Joe Salisbury of Great Britain return the ball during the mens doubles final against Andy Murray of Great Britain and Feliciano Lopez of Spain during day seven of the Fever-Tree Championships at Queens Club on June 23, 2019 in London, United Kingdom. (Photo by Clive Brunskill/Getty Images)

  • IMG close to 10-year deal with ATP Media worth $1bn
  • Perform Content complains to ATP over lack of tender, claims it would pay more
  • Betting streaming and data rights market continues rapid growth

Digital and data specialists Perform Content wrote to tennis’s ATP Tour this week to say the company is prepared to make a larger offer than that currently on the table from IMG for the betting and data rights to ATP World Tour events, SportBusiness Media understands.

Perform is also understood to have complained bitterly about the lack of a competitive process for the rights. The commercial rights to the tour are handled by ATP Media.

It is thought that Perform argued in its letter that IMG, whose parent company Endeavor is preparing to float on the New York Stock Exchange, has a conflict of interest. IMG owns tournaments, distributes media rights, represents players and has a representative on the board of the ATP.

Sportradar, the other major player in the betting streaming and sports data market, is also understood to be extremely unhappy at not being given an opportunity to bid for the rights.

The deal with IMG, which is said to be in the final stages of negotiation, is for 10 years, from 2021 to 2030. The total value is thought to be about $1bn (€884m), or $100m per year. This includes IMG’s production costs and other implementation costs. The net amount the ATP is set to receive is about $75m to $80m per year, which is thought to include a minimum guarantee and an expected share of upside revenues.

The deal would be a substantial increase on current values, but a like-for-like comparison is not possible. Both the nature of the rights and the match inventory are considerably richer in the new deal.

At present, IMG holds the betting streaming rights to the ATP World Tour Masters 1000 and World Tour 500 series in a four-year deal with ATP Media agreed in May 2016. The deal runs from 2017 to 2020 and is worth $15m per year.

Separately, the agency holds the official data rights to ATP events through its acquisition in 2012 of sports data company Enetpulse.

One data rights expert said that the official data rights could be worth $30m to $35m per year. That would put the current value of streaming plus data for the 1000 and 500 events at about $45m to $50m per year.

The new deal covers both streaming rights and data rights and has been expanded to include many of the events on the ATP 250 series. For 2019, IMG holds the global media and betting streaming rights, outside the host market, to 17 of the 39 events. It is negotiating with multiple local organisers and is expected to have increased this to at least 25 by 2021.

ATP win?

The new deal will enhance the ATP’s financial position in the next decade. Commercial revenues for the tour have already doubled between 2008 and 2018, from $61.3m to $144.4m, with prize money doubling in the same period from $64m to $139m.

But while the IMG deal represents a big uplift for the ATP, Perform’s dramatic late intervention in the process is likely to lead stakeholders in the sport – especially the players – to ask whether it could have been even bigger.

The situation will put pressure on the ATP Tour’s outgoing chief executive and president, Chris Kermode, and the chief executive of ATP Media, Mark Webster, who led the negotiation with IMG.

The implication from the Perform complaint – that the ATP is leaving millions of dollars on the table by not holding a proper process – comes at a time when the governance of the sport is in disarray. Kermode was told in March this year by the ATP board that his three-year contract was not going to be renewed. In May, Justin Gimelstob, the player representative thought to have led the calls for Kermode to be replaced, also resigned. On Saturday, four members of the ATP Players Council resigned in a long-running internal turf war in the sport over which players should serve on the ATP board.

Long deals, heated market  

IMG’s impending deal with ATP Media – if approved – confirms two recent industry trends. First, sports marketing companies are agreeing increasingly long-term deals with governing bodies. Second, the value of betting and data rights in sport continues to skyrocket. In tennis, it has now overtaken the value of traditional television rights for many properties, especially those below the very top level. The value in betting rights is more heavily indexed to volume and frequency than to quality of play and star names.

The ATP agreement follows a 10-year deal agreed in 2014 between the Women’s Tennis Association and Perform for the media rights and betting streaming rights of the WTA Tour. Under the deal, which runs from 2017 to 2026, Perform and the WTA created a joint venture, WTA Media.

In 2015, Sportradar agreed a five-year extension, from 2017 to 2021, to its deal with the International Tennis Federation for sports and betting-related data. The deal was reportedly worth $14m per season.

The same year the Sportradar deal was signed, IMG chairman Michel Masquelier told SportBusiness Media that IMG intended to be number one in the sports betting and data sector. The company’s increased investment and determination to lock the property down through to 2030 reflects the increasingly competitive nature of the market, which has heated up further following two mergers which have created powerful rivals to IMG.

In 2016, Sportradar acquired rival Sportsman Media Holding in a €50m deal. Sportradar chief executive Carsten Koerl told SportBusiness Media at the time that the company would bid more aggressively for top-tier betting rights after the takeover.

And in April this year, Perform Content was merged with US data and technology company Stats.

Disney-owned US sports broadcaster ESPN is also considering betting streaming rights acquisitions following the legalisation of sports betting in the US in May 2018, SportBusiness Media understands.

The ATP, IMG, Perform and Sportradar all declined to comment for this article.

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