Real life economics are creating woes for many companies as well as ordinary people these days, as effects of a global slowdown are being felt. Now the facts of financial life are catching up to tennis.
The first signs of trouble appeared late last year. ISL, a Swiss-based sports marketing firm had earlier in the year signed on as the sponsor of the ATP's elite events, the Tennis Masters Series (TMS) tournaments. At that time, ISL had agreed to pay the astonishing sum of $1.2 billion to bankroll the TMS, promising to find a series of high-profile sponsors to contribute that amount.
Some high-profile sponsors were lined up at the start, including Mercedes-Benz, Newsweek and Fila. But since the early months of the arrangement, few additional companies have stepped forward. Although no official numbers are known, Tom Tebbutt reported in the the Globe and Mail this week that, according to rumour, ISL has sold "less than half" of the sponsorships it expected to provide for the Masters Series. And the badly mismanaged ISL is now seeking an equity partner just to stay afloat, as its paren
t company is fighting to stave off bankruptcy proceedings.
Most observers feel that a settlement between the ATP and ISL, as well as other sponsors the ATP has hurriedly signed on, should provide enough funding to allow the TMS to continue through 2001. After this year, however, the financial future of the series is clouded.
The one TMS tournament that was not affected by the ISL collapse was the Miami event, which has a separate title sponsor. Unfortunately that sponsor is the mobile phone manufacturer Ericsson, which is having serious problems of its own.
In recent days Ericsson announced disastrous financial results, and has felt obliged to lay off over 15,000 workers. Ericsson not only sponsors the prestigious Miami tournament, but also a popular series of Challenger events in Latin America known as the Copa Ericsson. Organizers are crossing their fingers and hoping that Ericsson's difficulties will not force it to reconsider its involvement in tennis sponsorships.
Like tennis players desperately trying to fend off match point, more than one tournament director will likely be working overtime over the next few months to keep their events afloat.