Wimbledon eyes another profitable year
- 19 June 2011
- From the section Business
As the 125th Wimbledon Championships get under way, the man in charge of running the tournament is wondering what the weather holds in store for the next fortnight.
But Ian Ritchie, the chief executive of the All England Club, is not too concerned, as the retractable roof that has been in place on Centre Court since 2009, guarantees that no days will be a complete wash-out.
Even before the roof was built, though, the unpredictable British weather wasn't able to dampen spirits or profits at the tournament.
Last year's event made a £31m profit, or surplus. That is what was left over after the All England Club took out its operating expenses.
The average surplus over the last four or five years has been in the region of £25m to £30m.
All of that is passed on to the Lawn Tennis Association (LTA).
The LTA has been criticised for not doing enough to improve the state of British tennis - Andy Murray is the only British man in the world's top 100, while only two British women make the top 100. But the All England Club refuses to get involved.
"We work on the assumption that what we do is manage the Championships and work on that. What the LTA do with that [money] is up to them," says Mr Ritchie.
Wimbledon makes more than 50% of its gross income from selling the broadcasting rights to the tournament around the world, with the event now shown in 185 countries.
According to Mr Ritchie, Wimbledon made its biggest surplus of about £35m in the late 1980s and early 1990s, boosted by revenues from German TV, when players like Boris Becker and Steffi Graf were at their peak.
Li Na, who became the first Chinese player to win a Grand Slam with her victory at the French Open, is now generating a similar interest in China, and Asia generally.
"We've been in discussions with [state broadcaster] CCTV in China about coverage this year. We've been involved with them for some time," says Mr Ritchie.
But he admits that the revenues generated may not have as much of an overall boost to finances as those from German TV did in the past.
"The rights fees paid in China are not as significant [as in other countries] but you get audiences of tens of millions of people," he says.
"It is important for us to make sure Wimbledon is seen around the world."
The second biggest portion of Wimbledon's income comes from sponsorship, or what Wimbledon likes to call its official suppliers.
The All England Championships is the only one of the four Grand Slams that does not have advertising around its courts.
Instead, it enters into long-term agreements with brands to provide goods and services.
Its oldest official supplier is Slazenger, which has supplied balls to the Championships since 1902.
New additions to the official suppliers list this year are Sony, with whom the All England Club has worked to develop 3D coverage of both finals and the mens' semi-finals; Jacob's Creek, who replaces Blossom Hill in providing wine; and Lavazza, which is replacing Nescafe as the official coffee of The Championships.
For the suppliers, even if they do not get the advertising space that other tournaments offer, being associated with the Wimbledon name alone can be very attractive.
Hertz, which provides cars to transport players around during the Championships, says it is the most important corporate event it does internationally.
"It marries tradition and modernity," says Michel Taride, president of Hertz International.
The company gets about 700 tickets for its hospitality suite and high visibility for its brand in London.
It is currently in the middle of a five-year deal and although it has been cutting costs throughout the downturn, decided this was one cost they were not going to cut.
Sometimes there is a value in the tournament which is hard to quantify but is highly important in the services industry where building relationships with clients is crucial, says Mr Taride.
Wimbledon has always insisted that revenues from tickets themselves make up a relatively small amount of the overall income.
Corporate tickets are limited to about 10% of overall ticket sales for the show courts.
The majority of tickets go through the public ballot, which Mr Ritchie describes as "the most egalitarian" system.
But there has also been anger that those who can afford a debenture ticket - which for Centre Court for 2011-2015 costs £27,750 and guarantees a ticket for every day of the Championships for those five years - can also profit from them, as it is the only ticket which can be sold on.
But profits or not, there is one key element which keeps the tournament at the top of its game year after year.
The fact that the players value the tournament so much is the real key to the success of the tournament, says Mr Ritchie.
"It is all about the players at the end of the day."