Five for Friday: What to make of Australian Open prize-money boost

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Novak Djokovic

Novak Djokovic earned A$2,300,000 (about $2,359,340 USD) for winning the 2012 Australian Open. (AP)

The Australian Open made waves earlier this week by announcing a record-breaking increase in prize money, adding $4.15 million to reach a total purse of $31.1 million. The move comes after increased pressure from the ATP, with players going so far as to threaten a boycott of the year’s first Grand Slam if their demands weren’t met.

Some thoughts on the announcement and what it means for both tours going forward.

1. Was a boycott really in the cards?: There’s some sadistic part of me that actually hoped the Slams would call the players’ bluff. Would the players really boycott the Australian Open, as they were threatening to do, in favor of possibly holding a tournament in the Middle East? Would Roger Federer, Rafael Nadal, Novak Djokovic and Andy Murray really be willing to tarnish their legacies by skipping the prestigious Slams in order to support their peers and play for more money? I don’t know, maybe I just love unnecessary drama (I do), but I would have loved to see that standoff play out.

2. Let the arms race begin: It’s a basic, if not flawed, working theory: If you want to be the best, you have to pay the best. In my former job as an attorney, that was definitely true. It was widely accepted that the best companies are the ones that offer the best salaries, and that’s the spot in which the Slams now find themselves. The Australian Open, the first major of the year, has raised the ante and I have no doubt the rest of the Slams will follow suit.

It’s hard to feel much compassion for the Slams knowing they make money hand over fist on the backs of players and volunteers. But I can’t help but wonder when the tipping point will come, where the players will begin to come off as whiny millionaires. Right now, their requests are justified. What they seek is a market correction, one that makes tennis a more viable sport not for the Federers and Nadals, but for the Lukas Rosols and Michael Russells of the world, lower-ranked players for whom making the main draw of a Slam can mean big bucks even if they don’t win a match.

But the fight over prize money isn’t over, and the ATP has gone out of its way to make that clear this week. “[It is] great news for every player that plays this sport, [but] it’s not over yet,” Djokovic told reporters in Beijing this week. “Obviously, there are other Grand Slams that need to react. We are still in negotiations and we are still doing it behind closed doors.”

3. So who gets the cash?: The larger pot creates the big question of how it will be distributed. Craig Tiley, tournament director for the Australian Open, said no decisions had been made yet because he wanted input from the players first. That meeting will take place next week in Shanghai. Of course, the interests driving this move for increased prize money have not been those of the top players but of the lower-ranked men. They want to see prize money increased in the first few rounds to help the players who have done well enough to make the main draw but may not make it much further to see the big money.

If it sounds a little bit like tennis’ version of a welfare state, it is. While Federer, Nadal, Djokovic and Murray are the names that sell tickets, they’ve done well to put their self-interest aside to support the lower-ranked guys for the good of the tour. But as the players prepare to talk to Tiley about how prize money should be distributed, ESPN’s Darren Cahill, a former player and coach to Andre Agassi, took to Twitter this week to voice his opinion that players should be paid to win, not just show up.

If I were an Australian Open organizer, I would print out these tweets and take them with me to Shanghai. While many have pointed out that just making the main draw is a huge accomplishment — and they’re absolutely right — there’s something that just doesn’t sit well about the idea that the Slams would cut big checks simply for attendance. If the players are serious about spreading the wealth, give the bumps to second- and third-round winners in qualifying rounds and reward the players who get to the second and third rounds in the main draw. Put simply, incentivize winning. That’s what’s healthy for the tour.

4. Equal prize money remains intact: While the men have been adamant all year about their desire for the Slams to increase prize money, some players’ consistent attacks on the concept of equal prize money have seized headlines. Janko Tipsarevic, Gilles Simon and Sergiy Stakhovsky have been the most vocal critics, arguing that the women should have to play best-of-five to justify their equal paycheck. Simon went further, arguing at Wimbledon that the men’s game was simply more entertaining from a revenue basis, with ticket prices to the men’s finals at Slams outpacing women’s.

But Steve Wood, head of Tennis Australia, reiterated that the Australian Open would continue to offer equal prize money to the women. The Australian Open’s stance simply underlines why this whole discussion over equal prize money is a complete waste of time and does nothing more than provide certain players a platform to bash the women’s game. The debate is a red herring when it comes to the call for increased prize money. Regardless of the arguments, whether market- or commodity-based, the fact is equal prize money at the Slams is here to stay. The fight ended years ago when the women, led by the likes of Venus Williams, lobbied for it and the Slams capitulated for reasons that were unrelated to which tour drove more revenue or brought in more fans. It was the right thing to do, the Slams were in a financial position to do it, and now that equal prize money is in place it’s not going to be taken away no matter how much the men cry foul.

5. Where are the women in this?: Compared to the ATP, the women of the WTA have been silent through most of the year regarding prize money. One reason is because they’ve been left out of the discussion by the ATP. When the men were talking about boycotts, the women had to read about it in the paper. When the dust settled, the women don’t have much to complain about. They’re getting the same upgrade as the guys and they didn’t have to grab every microphone to make their concerns known. But shutting the women out of the conversation simply highlights the divide between the two tours, one that the Slams and tournaments can continue to take advantage of. That division isn’t healthy in the long run. Then again, tennis has never been a sport that’s great at unifying the two tours and mobilizing them towards a common good. It’s a shame.

  • Published On Oct 05, 2012

    The Australian Open’s 15 % increase in prize money may be “a record-breaking increase in prize money” -- but it is far from adequate. And the growing Australian Open can afford the AUD $4 million increase in total prize money, given its revenue has doubled from about $80 million since 2005.


    This AUD$30 million (USD$31.1) in 2013 prize money makes up only about 18% of the estimated $165 million revenue that the 2013 Australian Open will probably make. Imagine a business with a golden goose that lays the golden eggs. Without this goose, there is no revenue. By golden goose, I mean the players who actually create an attractive product through their performances (sorry, but the value-added of volunteers is marginal). Is it fair that the business pays just 18% to the goose while keeping 82%?


    Furthermore, the men make only 9% ($15 million) of the total revenue, given the men’s share of prize money is exactly half of the 18%. Yet the men probably contribute 60% to 70% to the total tournament revenue.


    The other – higher revenue – grand slams such as US Open and Wimbledon are worse than the Australian Open. For example, the 2012 US Open’s total men’s/women’s prize money of $24 million is only about 11% of the 2012 US Open’s estimated revenue of about $220,000. This means the men got only 5.5% of revenue. [In 2012, the US Open raised prize money by 11%, Wimbledon 10% and the French just 7%.]


    Each grand slam tournament is essentially a lucrative money-making business that has been exploiting the revenue-generating male players. These grand slam businesses give only 5.5% to 9% of their total revenue to the men (despite their 60% to 70% contribution to revenue).


    Male tennis players deserve a larger slice of the pie, just as in every other major sport that is not shacked by equal prize money and combined tournaments. In the NFL, NBA, MLB, NHL, the players get roughly 55% of total revenue, according to Andrew Zimbalist, a sports economics professor at Smith College.


    This means pro football (NFL) paid its players about $4.9 billion annual income from $9 billion revenue. Pro baseball (MLB) paid its players about $3.8 billion income from $7 billion revenue. Pro basketball (NBA) paid its players about $2 billion income from $3.8 billion revenue. Pro hockey (NHL) paid its players about $1.6 billion income from $2.9 billion revenue. The top 250 players in men's tennis make about a quarter of the amount of money in tennis as they do in men's golf.


    The opposite is true for women's tennis, who make much more prize money than women's golf. So far this year, the top women’s tennis player has made almost $6.9 million while the top female golfer has made only $1.7 million after 18 events. No wonder female tennis players make up seven of the ten richest female athletes on the planet.


    On another issue, tennis history already holds powerful precedent for ‘boycotting’ the Grand Slams due to prize money: before the open era began in 1968, the greatest amateur players courageously “tarnished their legacies” when they ‘boycotted’ the Grand Slams and other prestigious amateur tournaments that refused to pay them above board. Rod Laver, Ken Rosewall, Jack Kramer, Pancho Gonzales, Din Budge, Lew Hoad, Bill Tilden, Ellsworth Vines, Fred Perry, Pancho Segura, Tony Trabert, Frank Sedgman, Bobby Riggs, and many other greats took the big step to turn professional in order to play legally for prize money. Those past generations were pioneers in fighting for prize money at the grand slams. This generation of men’s players need to pioneer the fight for prize money that values their contributions.


    In 1973 Wimbledon, 81 of the top players boycotted the tournament (including reigning champion Stan Smith) to protest the suspension of one player. A noble but lesser cause.


    Given the cachet of Federer, Nadal, Djokovic, Murray and other stars, the men could easily find sponsors in Qatar, UAE, China, Singapore, Japan, Korea, Brunei, etc to fund and host a replacement tournament to any grand slam. The men would finally get paid what they deserve – without the limitations and exploitation of the ‘equal pay’ principle. Fans of men’s tennis would be able to watch entire men’s matches without being disrupted by inferior-quality women’s matches, women’s interviews and special segments highlighting women stars. As long as men’s tennis is coupled combined with women’s tennis in the grand slams, the men’s tennis product will continue to be diluted and confused by women’s tennis.


    Finally, it’s a false argument that the female players have been “been left out of the discussion by the ATP… shutting the women out of the conversation.” The question we should be asking is: why have the women been silent through all this? The women knew – for over a year – that the men had been asking for and/or negotiating with the grand slams for increased prize money. Don’t the women have any initiative? Why didn’t the women directly ask the grand slams for 25% to 30% more prize money for the women’s events?  Why did the WTA wait for the men to get the prize money increases? Because they knew they could continue to freeload off the men’s efforts, as they would automatically get matching pay increases due to the “equal prize money” principle. That’s life in a welfare state.


    Not only is there no good reason for the ATP to include the women in negotiating with the grand slams, it would be a strategic mistake. The goal of the men should be to seek to end the equal pay principle, terminate the combined events, and split the two tours – not to validate these arrangements. There is no “common good” to be had after 44 years of the men’s tour being increasingly disadvantaged by this arrangement.


    - First, the women have no clout with the slams to demand such high prize money increases. After all, women contribute less to revenue and are already the wealthiest women’s sport. Without the ‘equal prize money’ mechanism to exploit the men, the women players would be making substantially less prize money on their own. It is men’s players – particularly though Federer’s reputation and relationships with the slams – that have made such huge grand slam prize money increases possible for the first time in the open era.


    - Second, adding the WTA will only complicate matters and slow down the process. The men are already dealing with seven different stakeholders (four different grand slams, male players, ATP and ITF). The WTA has different motivations and agenda (the rich top women players want higher prize money for themselves and are less interested in sharing with the early round losers). If Billie Jean King’s recent weaseling (where she tried to use Federer’s children, wife and mother to influence his leadership of the men’s players) is any indication, working with the women might be a political minefield.  


    - Third, if men combine forces with women, the men would be implicitly accepting the equal prize money mechanism and other arrangements that exploit the men.


    I wish there was a correlation between greater prize money and better tennis. I don't begrudge the players for their winnings, but I'm not sure that there is. 


    I can understand the concerns regarding players 'tanking' and getting the money but that is the law of unintended consequences, which happens in any situation.  Is anyone going to try to make a case that in a match like Isner vs. Mahut, played over multiple days-- can anyone in good conscience really argue that Mahut did not deserve his earnings because he lost in the first round???

    As for the equal prize money issue, I may not find all the Women's matches entertaining but watching the likes of the Williams Sisters is more entertaining than a lot of matches (men's and women's) and there are plenty of boring Men's matches (I've seen a great deal over the years).  Sure the pendulum has swung in the Men's direction in terms of interest generated but for many years (particularly at the beginning of the 00s, the Women were the bigger draw.  Too bad, the issue wasn't settled then as there would probably have been less griping.  One never knows when that pendulum will swing back in the other direction and put some on the wrong side of history.


    The Big Lie about equal prize money is exposed by unequal ticket prices for the Australian Open.


    These ticket prices will become even more unequal next year. This proves that men’s tennis not just attracts more revenue than women’s tennis, but also that men’s tennis is subsidizing prize money for women’s tennis (which is unable to pull its own weight in generating revenue). This is significant because ticket sales make up the largest component of the Australian Open’s revenue (about 40%), ahead of sponsorship (28%), TV rights (26%) and merchandising (3%).


    Here are the 2013 Australian Open adult ticket increases (2012 prices in brackets), according to the largest newspaper in Melbourne (where Australian Open is held). Prices are in Australian dollars (AUD$1 = USD$1.02)


    - Men's final: $394.90  ($369.90)


    - Women's final: $294.90  ($289.90)


    The 2013 men’s ticket prices are 7% higher than 2012 mens ticket prices, but 2013 women’s ticket prices are only 2% higher than 2012 women’s ticket prices This clearly indicates that the Australian Open is using mens revenue to subsidize prize money increases for women. That’s because it cannot increase womens ticket prices too much or risk more empty seats.


    Here is proof that mens tennis is more attractive to the market than women’s tennis. If women’s tennis was so entertaining and appealing to the market, ticket prices would be equal. But it is not:


    - The 2013 men’s final ticket costs 34% more than the women’s final. In 2012, men’s final ticket costs 28% more than the women’s final ticket.


    - Even worse, the 2013 each men’s semifinal costs over 2.5 times each women’s semifinal! The Thursday day ticket price for two (both) womens semifinals plus one men’s doubles during the day costs only $179.90. The Thursday night ticket price for only one men’s semifinal costs $219.90! In other words, each womens semifinal costs less than $90 (I did not remove the value of the mens doubles) while one men’s semifinal costs about $220!


    This equal prize money to women has a consequence for men: it puts a limit on how much the men can earn (since the total pie the grand slams are willing to offer must be shared in half). Regardless of whatever prize money amount requested by the men, the grand slam executives counter with the argument that the grand slams have to double the men’s amount in order to pay equal prize money to women. Apparently the men asked for a 20% increase in prize money, but because of the equal prize money, the Australian Open limited the increase to 15% for the men (and automatically gave the exact same 15% prize money increase to the women). Without this artificial constraint of having to give equal pay to a separate group, the men would be able to negotiate amounts and terms based on their actual contribution to revenue, just like players in other men’s pro sports such as golf, NFL, NBA, NHL and MLB.


    This is significant because, even with the increases, the total mens and womens prize money (AUD$30 million) for the 2013 Australian Open amounts to just 18% of the estimated revenue of the 2013 tournament. Given that mens tennis probably contributes 60% to 70% of tournament revenue, I estimate the men’s prize money is only about 13% to 15% of the revenue generated by the men for the tournament.  In the major pro sports, players get about 50% to 55% of total revenue -- so male tennis players are being ripped off because tenns is the only major sport with combined tournaments and equal prize money.


    Women would deserve equal prize money ONLY IF they were willing to compete against men in the same singles and doubles tournaments. Let’s see Serena, Sharapova, Azarenka, Li Na, Wozniacki, Radwanska compete in the first round against low-ranked male players (in 1998 Serena and Venus Williams – after  boasting they could beat any man ranked 200 or worse – were crushed by No. 203-ranked male player Karsten Braasch). If women are not willing to compete directly against men, then they are competing in a different event than the men – and therefore are not entitled to equal prize money (just like the difference in prize money between singles and doubles events). A job performer is entitled to the same pay only if he/she has the same qualifications and is performing the exact same work, otherwise there is no basis for equal pay.


    For many years the women have quietly benefitted from the men's efforts to increase prize money. Even the women tennis players admit that they are piggy-backing and freeloading off the popularity of men's tennis that attracts more ticket-buying fans, more TV rights and viewers, more sponsorships, more merchandise sales and more prize money. “Jankovic and several other female players acknowledged that they were riding the shirttails of the men’s popularity, their matches attended by fans who originally came to see Federer, Rafael Nadal and Novak Djokovic.”


    What women’s advocates conveniently omit to tell you is that women do with this equal prize money. Women distribute their prize money more unequally than the men do. The top women are benefitting the most -- the top women are getting richer -- because the women allocate relatively more prize money to the latter round winners. On the other hand, the men allocate relatively more prize money to the early rounds in order to help the lower-ranked players. This inequality occurs at the combined events that are below grand slams (e.g., masters level events and ATP 500 events).  For example, at the 2012 Sony Open (Miami Masters) the men's champion Novak Djokovic won only $659,775 for beating Andy Murray while the women's champion Agnieszka Radwanska won $712,000 for beating Sharapova! You can see this disparity in the information below. Women and men get $4,828,050 each, but not only do the men opt to put more money into 'fees, bonus, pool' they opt for a more equitable prize structure than does women's tennis. It's the same disparity in womens doubles and mens doubles.


    This equal prize money and the marketing benefits from being associated with men's tennis has resulted in top women tennis players becoming the richest female athletes in the world. Without combined events, female tennis players will probably be earning much less than today (just like female golfers because the LPGA tour and PGA tour do not have combined events).


    These are just a few reasons why equal money must be ended. If the Australian Open or any grand slam reiterates its intention to continue discriminating against men – charging higher ticket prices for mens tennis but underpaying men on the greater revenue generated by mens tennis – then the men should boycott that grand slam.


    Mens tennis needs to be like mens golf – separated from the womens side of the sport. It is time for the men to end combined tournaments at grand slams, masters, etc. The men should start their own replacement Grand Slam in the Middle East, China, Singapore, Japan or elsewhere where they can earn much more money. Men should keep their tournaments separate from the women – this will clarify exactly how much revenue is earned by mens tennis so that the men can negotiate prize money based on the revenue that men generate.


    There probably is an argument for unequal prize money, but it's weak when you are (mostly) selling a combined ticket to an event which is scheduled on an 'as-you-'go' basis.  There certainly is no reasonable argument for slightly unequal prize money, which is what we had in the recent past.

    Of course the argument for unequal prize money would probably mean top women get paid less than top men, but much more than lower ranked men.  (Any fair argument would primary reward drawing power like any other form of entertainment.).


    You make it sound as if the players who lose in the first round are undeserving losers and lucky moochers living off the sweat of the stars.  Nothing can be further from the truth. How many matches in the Futures and the Challengers do they need to win just to make the qualies of a major? How many years of practice, years of travel and coaching expenses just to get to the first round? Tennis is a financially losing proposition for those ranked over a hundred. Those between fifty and a hundred will earn a profit, but at the end of  their careers will generally have little to show for all their years of toil. If the goal of the USTA, the ATP is to increase the competitive level of the game, to attract the best athletes, to create more entertaining matches in the lower rounds, you need to support the creation of viable farm system. Right now the choice is pretty clear for most athletes: be a baseball, basketball, football or soccer player. Even be a golfer where you can make hundreds of thousands competing on the lower tour. Why destroy your body and your youth for a sport that only offers a viable professional career for but a few? If anything will help American tennis, this will. More money, more better players.


    I fully agree that women should get equal prize money as men. But it seems a little unfair that the WTA players should get the same pay rise as the ATP players who actually took the time and energy to haggle for it! Of course if it turns out that ATP players have been intentionally keeping women out of the negotiation process, then I will take back my words. 

    Also, the meeting to decide about the distribution is taking place in Shanghai! Isn't that a ATP only event? Don't women get a say on how the money should be distributed?

    Think about how much more leverage the players would've had if Serena, Venus, Sharapova, Li Na and Sam Stosur were sitting on the same side as the Big Four while negotiating with Craig Tiley!!


    I'm sure the USTA will up the prize money soon when they construct there replacing Armstrong's democratic stadium with their latest House of Lords stadia with multi-tier luxury boxes pushing the old ground pass fans to the higher seats like The Ashe Stadium.


    As much as I don't care for the "equal prize money" debate, at least someone on the ATP is making noise.   I purely guessed that both Williams sisters are on the players council as they are the only two who seem to be aware (beyond the grunting issue) but had no clue Schiavone and Wozniacki were as well.


    CreativeInventive1:   Judging from the consistent success of men’s golf by keeping the men’s tour separate from the women’s tour – men’s tennis has nothing to fear from supposed “pendulum swings”, when women supposedly will become the bigger draw. The majority of tennis fans are men’s tennis fans.


    The GOATs Steffi Graf and Pete Sampras existed in roughly the same era. During that era, Graf played longer, won more titles and played more matches than Sampras – yet Graf made only half of Sampras’s $43 million because the market was not willing to pay as much to see women’s tennis.


    Do you have any hard data to prove that "at the beginning of the 00s, the Women were the bigger draw"? Total attendance, ticket prices of mens and women's tickets, prize money won , etc.  And for how were women supposedly the bigger draw? Were women attracting spectators because their tickets were cheaper?


    Some of these perceptions can be misleading. For example, most tennis writers like Courtney make it sound as if the equal pay principle is widely accepted and fixed in stone. Yet when a British poll asked a simple question: "should women's tennis players be paid the same as men?"... 77% said NO.