USTA CEO Sherr outlines vision for Premier Tour

USTA CEO Lew Sherr (l) presented the Grand Slams’ vision for a reformatted tennis calendar to the owners of the sport’s Masters 1000 events and chairs of the ATP and WTAgetty images

USTA CEO Lew Sherr has assumed leadership of the Grand Slams’ push for a streamlined Premier Tour, presenting their vision for a reformatted tennis calendar to the owners of the sport’s Masters 1000 events and chairs of the ATP (Andrea Gaudenzi) and WTA (Steve Simon) during the BNP Paribas Open at Indian Wells.

In an interview with SBJ, Sherr outlined the broad strokes of the new tennis ecosystem the Slams are proposing: a 16-event Premier Tour, consisting of the four Grand Slams, 10 combined 96-player-draw/10-day-long events, one international competition and a combined year-end finals; a Contender Tour consisting of lower-level tournaments, where players would compete for Premier Tour placement the following year including a promotion/relegation playoff; and a set offseason ranging from eight-to-12 weeks, depending on one’s participation in the finals (with eight-to-10 weeks of additional rest built in throughout the year).

“As we look at the calendar, there are two factors,” Sherr said. “One, we’re trying to balance player health. And two, we want to present the sport in the best possible way to fans.”

The concept has been in the making since 2021, when tennis’ seven governing bodies – the four Grand Slams, ATP, WTA and ITF – enlisted Boston Consulting Group to investigate the best ways to commercially maximize the sport. The primary takeaways from that work, Sherr said, were:

• While broadly popular, 70% of tennis fans only engage with the sport’s Grand Slams, and “the tour product is viewed as lacking consequence and being confusing.”
• Players desired a less arduous workload, more recovery time and more compensation.
• Ten tournaments drove 97% of the profit for the sport.
• The majority of prize money, sponsorship dollars and fan interest concentrated on the top five or so players in the world.

Sherr could not yet commit to the exact events that would be folded into the Premier Tour, but noted he felt it important to garner feedback from the Masters 1000s because “many of those events would be the backbone” of the schedule. He believes this overhaul could unlock $1 billion worth of new annual revenue for the sport.

“The work we did with BCG around this clearly identified the most value generated from changes in the product and the calendar. If we can get that right, that is what will drive more viewership, more interest – and then off that, the economics that trail along with: more viewership, greater sponsorship value, higher broadcast rights, et cetera,” Sherr said. “Additionally, commercial aggregation, improved marketing, all of those things will be helpful.”

There are roadblocks, however, as the aftermath of Indian Wells made evident. The Slams will need to build out the details of their still-high-level proposal and address the concerns of a fragmented set of stakeholders. And a further wrench was thrown by Gaudenzi reportedly presenting a separate, 10-figure proposal from the Saudi Arabian Public Investment Fund to the Masters that would, among other things, create a Masters 1000 event in the kingdom. A PIF source characterized those negotiations, which are being carried out by PIF-owned SRJ Sports Investments, as indicative of a desire “to work with the existing governing bodies within the sport."

Sherr said he is not abreast of all the details in the PIF proposal, but added he does not necessarily see it as mutually exclusive to adopting the Premier Tour model.

“Some have portrayed it as competing tours. I don’t think that’s the case,” Sherr said. “We’re trying to reform the existing tour from within. [The PIF proposal] is the creation of another event and some commercial aggregation. Again, likely to make it harder, more stakeholders, right? More entrenched events. From that standpoint, we’d love to know more.”

Another consideration is the status of the 500- and 250-level tournaments, which would lose prestige and access to top talent through delegation to the Contender Tour. Sherr said “one of the principles in the vision that we have brought forward is that this Premier Tour will absolutely redistribute proceeds to support those events in that second tranche.”

“They become different events, and they’re subsidized off the Premier Tour. Players in that bracket [ranked] 100 to 300-ish will be earning significantly better lifestyles or incomes than they currently do today,” Sherr said. “There are some 250s and 500s that are successful, but again, the commercial success of our sport is so concentrated with a small number of events. We’re not looking for those events [500s and 250s] to go away. We’re looking to reimagine the way the sport is delivered, and to ensure that we are subsidizing those pathways for players and the smaller tournaments, to allow them to be more sustainable, more viable and improve the whole ecosystem.”

The plan Sherr laid out would also include “play-down windows” for lower-ranked Premier Tour players to participate in Contender Tour events, and open slots in Premier Tour events for Contender Tour players to fill (he didn’t commit to an exact number for either). “While a certain number of these players will have their [Premier Tour] cards, effectively for the year, there will always be spots for Contender Tour players to go up,” he said. “We think that fluidity of elevation is important as up-and-coming players are cracking into, to make sure we’re not stifling that progression, or waiting until [the next] year.”

And then there is the question of funding the new venture.

“There are a number of ways that we could go,” Sherr said. “We [the Grand Slams] could fund it from within. There may be sanction sales that could help with the funding. Or there could be outside third-party investment… We’ll look at all of those as we go – but again, we want to do that in partnership. We’ve got event owners that have invested hundreds of millions of dollars in their properties and certainly will have a point of view on how we want to structure this going forward. But I don’t expect that to be the barrier for us.”

Would Saudi Arabian investment in the Premier Tour be a non-starter for the Slams?

“What I would say is, as of today, we’ve had no conversations with any external entities about funding the initiative,” Sherr said. “We’re not there yet. We suspect that there will be many that will be interested. But what we also want to do is uphold our principles, which is the product that we’ve shared with you. [Saudi Arabia’s] interest in the sport is indicative of the popularity of our game. But we know there are many others that are also interested in investing in sports and the like, and our focus, again, is going to be on, ‘What’s the best long-term solution and model for sports?’ So we’re not excluding anything, we’re not including anything as predetermined.”

Eventually, Sherr envisions an independent entity – not run by the Slams – overseeing a completely aggregated sport and handling the sale of media and commercial rights, although it remains to be seen how those rights would be pooled.

“In an ideal world, if that entity is delivering world class service and capability, certainly the opportunity for the Grand Slams to pool some of their rights into that unit would make a lot of sense,” Sherr said. “But that unit has to be created. The Grand Slam business today is much larger than the Tour business is, so that thing would need to be created. But the goal would be to create a world-class organization that would administer the sport in a gender-neutral and balanced way.”

The Slams will continue to regularly meet with stakeholders and build out the financial structure of the Premier Tour. However, no formal presentations are yet on the books for the forthcoming Miami Open or Mutua Madrid Open, Sherr said.