Industry news

Who should pay for growing the tennis market?

There have been a few turf wars between suppliers to the SA Tennis Association the past three years. Call it the battle of the balls, if you wish, or the ferocious arm wrestling about alleged "monopolistic practices."

Apart from this "fight" around ball sponsorship, there has also been a lively debate ranging within South African tennis circles about the question: should the suppliers of balls pay for the growth of tennis, or should suppliers of other products, like racquets or shoes, also make a financial contribution to SATA?

Suppliers of equipment for most sporting codes know that the honour of being selected as the "official equipment supplier" to the federation come at a hefty cost — in exchange for which the federation protects your status as their official sponsor and you are assured of good sales because your product is used exclusively in official tournaments.

Three years ago, SATA awarded a contract to Dunslaz Distributorship to be the exclusive SATA-approved ball supplier.

That decision was, however, overturned when Wilson lodged a complaint with the Competition Board that the wording in the contract excluded Wilson from competing on equal footing with Dunslaz in the official ball supplier-market.

"There was never a ruling by the Competition Board, but rather a settlement," says Johann Koorts, president of SATA. "The Board felt that the word ‘exclusive’ was not fair, and that SATA should rather have used the phrase ‘preferred ball’. That specific wording would have allowed Wilson entrance into the process."

"This year, we had a reverse situation: when SATA only signed an agreement with Wilson, Dunslaz Distributors approached the Competition Board about being excluded from the process. We had to reformulate our contract and we now have an agreement where a number of ball brands pay the same sanction fee and every one of those suppliers can exclusively supply the balls for an equal number of official SATA-sanctioned tournaments," says Koorts.

Initially, suppliers paid SATA 50c for every tennis ball sold, but currently, every tennis ball brand that have an agreement with SATA pay a set sanction or affiliation fee.

Steve Gallienne, director of Dunslaz Distributors, says that the brands Dunlop, Slazenger and Wilson each have 34 %, 33% and 33% access as sponsors and ball suppliers to SATA-sanctioned tournaments.

In essence it means that no balls of other suppliers should be used in SATA-sanctioned tournaments or club events — because if the ball of another company (even the event sponsor) is used in an official tournament, the points amassed at the tournament would be declared null and void.

"Say we currently have 45 tournaments and three suppliers are involved, we would divide that by three to use the balls of every supplier in 15 tournaments," says Koorts. He says that other suppliers who want to become sponsors of the tournament structure at the end of the next term in 2008 would be welcomed.

Gallienne explains that there are two options for affiliated ball suppliers. The first, or A-option, classify the ball brand as a "conforming ball". The ball can be used for play in league matches, but not in SATA tournaments.

The second, or B-option, costs more than double the A-option, and it affords a brand "conforming ball" status so that it can be used in leagues, but also in a certain number of allocated tournaments as per agreement with SATA.

"This decision to ask the ball suppliers to pay a sanction or affiliation fee, has resulted in an injection of cash into the coffers of SATA. But recently we have also invited the suppliers to negotiate with the provinces and to offer their sponsorships at regional level. It has added much to provincial tennis," says Koorts.

The stronger the federation and regional structures, the more resources are available to attract new participants and grow the sport.

But, since all suppliers and sellers of equipment for a sport benefit when that sport grows, Gallienne asks if it is fair that only one kind of equipment supplier — tennis balls — contributes to the coffers.

"What about the number of tennis shoes and other products that are sold? If the ball suppliers do not contribute to the growth of the sport, the sport will decline and shoe sales will also drop," he says.

Another supplier, who wishes not to be named, says they have actively supported the development of tennis in SA, and have sponsored some SA tennis athletes overseas. "Why then should we be paying twice for development of tennis?" he asks.

Brett Burnill of Leisure Holdings, SA distributor of Prince, says they opted not to pay the affiliation fee or levy for the simple reason that they did not derive any benefit from supplying balls for the tournaments. "We are not a significant enough player in the tennis ball market. In return we opted not to pay an increased ball affiliation fee."

Brad Summers of Wilson distributor The Golf Racket, however says that the levy was a good system implemented not only to assist SATA, but also to help grow the game of tennis. "It has always been our position that we will support any ball policy that helps better the game and is not detrimental to the Wilson brand. We firmly believe that it is in everyone’s interest to keep the sport strong," says Summers.

"Better organization, more leagues and tournaments lead to retailers and wholesalers selling more product. Wilson took SATA to the Competition Board for unfairly enforcing a sponsorship monopoly, not because we were not prepared to pay a levy. We feel that under Ian Smith’s leadership SATA has not only grown strong again, but tennis seems to be thriving," he adds.

But, says Gallienne: "We feel that we should support and respect the intentions of any governing body: the initial levy on the sale of tennis balls was instituted to help SATA to get back on their feet and functioning at a level where provinces etc. would regard them as a legitimate and strong association … something which they had been lacking for years due to weak structures.

"That credibility and legitimacy has now been restored — with the help of the funds raised through the ball levy. But there was no way that the levy was going to continue forever and unconditionally.

"Again, why should one product — tennis balls — be targeted when other suppliers to the same sport are profitting from the growth in the tennis industry, yet contribute nothing financially towards the game?" he asks.

SA tennis was plagued by political in-fighting and persistent rumors of an incompetent administration for a part of the 1990’s and the early part of the new millennium. Koorts, Smith (CEO of SATA) and the new executive board — introduced in 2002 — brought a new level of professionalism to the sport.

Under the guidance of Koorts and Smith, the sport has introduced a solid administration and a more unified executive board. It has established an excellent working relationship with the major ball suppliers as well as with the SA Lotto Board, interested sponsors and with the leading guiding body of men’s tennis, the Association of Tennis Professionals (ATP).

Koorts says SATA is communicating on an almost weekly basis with the ATP. The ATP might decide to move the current date of the South African Open tournament from the second week of the Australian Open to late in February, if it so wishes.

The governing body is also restructuring the whole calendar and might decide to give the SA Open the status of one of the three compulsory 250-point category tournaments that the top-players in the world have to compete in come 2009.

If the ATP supports SATA by giving the SA Open this exalted status, SA tennis might revive the glory years of the 1970’s.