Strategy

Tennis: Courting favour

Stacey Allaster has women’s professional tennis lined up to battle any recession.

The professional sports world is not all fun and games, especially as the economy wreaks havoc with sponsorship levels, its financial lifeline. Corporate partners are falling like well-placed drop shots, leaving organizations from football and cricket to golf and car racing to scramble for new backers. Even high-profile sports relationships, such as General Motors’ sponsorship of mega-star Tiger Woods, are being severed as companies focus on business operations rather than promotion. In the United Kingdom, the very notion of corporate sports sponsorship is now being questioned.

None of that doom and gloom seems to faze Stacey Allaster. The president of the Women’s Tennis Association is confident her sport is on strong financial footing after locking up long-term sponsorship, television and year-end championship agreements. Under Allaster’s leadership during the past three years, women’s professional tennis has undergone a transformation, from a “quiet, please” atmosphere, to one where improving the fan experience has led to fundamental changes in the way the game is played. In retrospect, these recent changes could be viewed as a pre-emptive strike against an economic downturn and just one more reason to pay attention to the strategies of Windsor, Ont.–born Allaster.

Taking an opportunity and running with it is something Allaster has been practising since she was a little girl. Whether chasing a tennis ball, a player or a multimillion-dollar corporate deal, Allaster delivers ace after ace. Since taking over the WTA, which promotes women’s professional tennis around the world, she has produced double-digit

revenue growth, secured equal prize money for female players and unlocked new markets for the game in the Middle East and China. During her short tenure, Allaster has also engineered some of the most dramatic changes the sport has ever witnessed. All of this from a woman whose first business experience was operating three paper routes as a 12-year-old growing up in Welland, Ont. It’s almost impossible not to shout: “You’ve come a long way, baby!”

The determined 45-year-old is certainly no secret to those in the sporting arena. Shortly after she left Canada for her new Florida home and the WTA president’s post in January 2006, the five-foot, one-inch dynamo was named sports executive of the year by Sports Media Canada for her success at Tennis Canada. She was also twice named to the Top 25 Leaders in Canadian Sport by The Globe and Mail, based on the tenacity she displayed in transforming Canadian tennis tournaments from mid-tier to world-class events. But what’s recently become apparent is that Allaster was just getting her feet wet here and she’s not afraid to ruffle a few feathers around the world.

A player once complained to Allaster — who focuses on marketing, business development and tournament and player relations while her boss, WTA chairman and CEO Larry Scott oversees the organization — that she was trying to give the fans what they wanted. Allaster laughs, her green eyes glistening, as she recounts the story at the tony Toronto Lawn Tennis Club, where she is a member. “Of course I was,” she says. “If we collectively take care of the fans, that means better opportunities. It’s all about creating a premium product.” That product has just kicked off a new season in earnest with the playing of the Grand Slam Australian Open tennis tournament, which started Jan. 19.

When Allaster joined the WTA, demand for women’s tennis had plateaued. It wasn’t attracting new fans, and it was competing for dollars in an increasingly crowded arts-and-entertainment marketplace. She recognized that the sport would gain fans in times of compelling rivalries or a tennis phenom who could transcend the sport, but her job was to build revenues when legends weren’t creating history. To do that, she wanted to create a fan-friendly prestige product that broke with tradition. “‘Quiet, please’ is not relevant to today’s consumer,” she says, “particularly, the younger fans who we want to court.”

Those fans want the best players to consistently show up to as many tournaments as possible, something that wasn’t happening at some events, notably the Canadian Open. To rectify that, Allaster, Scott and their team in September unveiled a strategy for 2009 that shortened the playing calendar so players have a longer off-season and ample time to recover from injuries. A penalty is also being introduced for skipping events, which won’t just affect players’ pocketbooks, but also their rankings. And the game is being played differently to generate more interest. Electronic line calling (started in 2006) and on-court coaching introduced this year mark the first substantial changes made to tennis since the tie-breaker was introduced in 1970. If the WTA tournaments get a fatter wallet as a result, the top players get a cut. “I have learned nothing is sacred, and you have to innovate for the sake of the fans,” Allaster says.

Some of her innovations — such as the aforementioned computerized line-calling and on-court coaching — have left traditionalists balking, but the numbers back her up. In Allaster’s first year as WTA president, operating revenue increased 22%, cash reserves increased 36%, marketing increased 219% and international sales increased 136%. Today, the tour takes in about US$50 million in revenue. Need further proof of the tour’s success? Sony Ericsson extended its historic US$88-million title sponsorship of the WTA in March 2007, one year early, for another two years — meanwhile, the men’s tour remains without a title sponsor. The WTA certainly likes what it sees, renewing Allaster’s contract for three more years with a mutual option to extend it until 2014. Despite the tough economic times, Allaster projects gross revenue to increase 10% this year, a year when corporate sponsors are pulling out of other sports. Such heady days are a far cry from earlier this decade when Allaster, who sat on the WTA board, was worried the tour was close to bankruptcy.

Yet the economic downturn will undoubtedly bring new challenges. Corporations such as General Motors, Johnson & Johnson and Suzuki have all cut sponsorship. But Allaster’s confident the WTA is on strong financial footing. That’s because WTA’s sponsorship and television agreements are “long-term and diversified in several markets, thus providing a natural hedge.” Nevertheless, in Allaster’s 20 years in the tennis business she has found that revenue from corporate clients and individuals can fall during recessions as corporations scale back on expenses and individuals opt for cheaper tickets. Corporate sponsors who aren’t locked in for a fixed amount tighten their wallets while new sponsors become scarce. That experience has taught Allaster that cash is king, and to build up reserves in good times.

When times are tough, Allaster says tournaments, just like any other business, must focus on cost management, adapt pricing models, come up with creative promotions and offer investment partners non-traditional options, such as back-end payments where sponsors pay just fixed costs or don’t pay anything in the first year of a four-year contract. There is, of course, some risk related to this model, but during her time at Tennis Canada Allaster found it was eliminated if she could negotiate with sponsors to pay the fixed costs, such as signage and suites.

But aside from the economic success of the tour, one of Allaster’s most impressive accomplishments was securing pay equity at the two Grand Slam tournaments that were paying female players less than the men: the French Open and Wimbledon. “I can finally tell women on the tour that they are living the dream,” says tennis great Billie Jean King, who in 1973 beat Bobby Riggs in the infamous Battle of the Sexes. King launched the WTA in a hotel room in England in 1973 to unite all female tennis players with the goal of being treated as well as the male players. King, who was the first female athlete to earn more than US$100,000, secured equal prize money at the U.S. Open in 1973 and at the Australian Open in 2000. But Wimbledon and the French Open didn’t capitulate until 2007. King credits Allaster for helping achieve that goal.

It’s not as if there was a big gap in terms of men and women’s prize money, says Allaster, but the gap had to be closed. “For the societal impact, for women in general, it had to be equal. We want to use our sport for societal change.” Allaster shot down some of the reasons the Wimbledon organizers, the All England Lawn Tennis Club, gave for the pay inequity. For example, Wimbledon said it charged more for fans to attend the men’s final so the men deserved more; Allaster told them to charge the same to attend the men and women’s event. She hired a polling agency to determine whom the fans admired most, which found women players were equally admired as men. She sent Venus Williams, who represented the WTA players, to present a current tennis player’s case on why men and women deserved the same treatment. Allaster also asked Virgin’s Richard Branson to pick up the cause in his role as a member of the WTA’s advisory council. All the work paid off. Last year, the Women’s Sports Foundation named equal prize money at the four Grand Slams as the Greatest Sporting Moment of 2007.

To those who know Allaster, such a feat shouldn’t have been unexpected. Allaster’s ability to take on tough challenges has been her trademark since childhood. At age 12, she didn’t have one paper route, she had three. “And it wasn’t your normal paper route, it was a route that had 500 houses,” she says. “[I was] a stubborn kid. Irrespective of my size, I believed I could do anything.”

Allaster’s parents separated when she was a baby and weren’t able to offer Allaster the silver-spoon lifestyle of many a tennis brat. Her father worked as a sales manager, and even though he was still active in her life, her mother endured the heavy lifting of parenthood. When Allaster’s mother was injured while working as a nurse, the family home was converted into a residence for college students to make ends meet. “My mother influenced me a great deal,” says Allaster, who now earns more than US$400,000 per year. “Seeing her physically struggle to provide for us. Not a day went by that she wasn’t supportive of anything I wanted to do. Playing junior tennis, lessons, tournaments, etc., was not inexpensive. She encouraged us to participate in sport, to work hard and to believe that anything was possible despite the limited resources and/or abilities.”

But even with her mother’s encouragement, Allaster called it quits after her first tennis lesson as a six-year-old. Although she wasn’t bad at tennis — indeed, she remembers hitting the ball over the net while her opponent didn’t — the youngster found it boring. Her second stab at tennis had a completely different result. In eighth grade, Allaster won a scholarship for a free membership to the Welland Tennis Club, free lessons during the summer and a free racquet. Thus began a lifelong love affair with the sport. As a teenager, Allaster earned extra money by sweeping the club’s clay courts and later teaching tennis to children. By the time she attended the University of Western Ontario in London to get a degree in economics and physical education, Allaster was the local club pro and was provincially ranked in singles and doubles. After university, she worked at the Ontario Tennis Association, promoting tennis at the grass roots level. In 1991, Allaster joined Tennis Canada, eventually becoming vice-president and tournament director.

Noted for her success at pushing forward projects — such as finding $40 million in financing for a new stadium, the Rexall Centre in Toronto — Allaster has earned a reputation as being a bit of a bulldog in the corporate world. Allaster shrugs it off. “To compete and succeed on the world stage in a male-dominated sports industry, I have had no choice but to be tough,” she says.

Being tough was essential in the mid- and late 1990s as traditional tennis sponsors evaporated and Allaster needed to find new ones for Canada’s two international tournaments. In the late 1990s, new laws were put in place that would end long-term tobacco company sponsorship. Even so, Allaster was able to double sponsorship between 1995 and 2005 at Tennis Canada. Greg Wood, Tennis Canada’s vice-president of corporate partnerships, credits Allaster with building from scratch the sponsorship structure that Tennis Canada still uses today for its Montreal and Toronto tournaments. Sponsors get different levels of exposure correlated to the amount of money spent. She encouraged repeat business by following up with sponsors after each tournament to summarize the exposure each received during the event relative to their investment.

Allaster started to gain international attention when she sold worldwide sponsorship rights to the Canadian Open in 2000. Wood, who was hired by Allaster and worked with her for 11 years, recalls she filled four-inch binders in anticipation of the data her potential clients might demand, something he says is standard practice today, but was rare a decade ago. These early lessons at Tennis Canada have developed into more sophisticated strategies at the WTA. At the turn of the century, Allaster repeatedly spoke up about the need for top players to come to Canada to create successful tournaments, and the need to diversify revenue. It’s small wonder then that WTA’s 2009 Roadmap has made player attendance mandatory at top tournaments and created numerous sponsorship opportunities.

But of all the lessons Allaster’s picked up in her 20-year career, the most important one is a bit surprising. “Politics is a mighty force that needs to be managed from an external and internal perspective — there is no way to avoid them, and you need to play the game to win.” Take a late-summer Manhattan gala celebrating the 35th Anniversary of the Women’s Tennis Association. Allaster, freshly coiffed and resplendent in a black-and-white skirt suit, could have been mistaken for just another social butterfly, but the ever-buzzing cellphone in her hand served as a hint that Allaster wasn’t there for fun, but for business. Discreetly, she made her way around the posh crowd of corporate kingpins and tennis legends, eagerly uniting guests with the celebrity they came to see, Billie Jean King. Longtime tournament sponsors were escorted for a photo with King, and Allaster did her best to make it a positive experience. She discreetly briefed King on who she was about to meet, and then Allaster held her guest’s cocktail or designer purse while photos were snapped. And then Allaster was off again, looking to unite others with King.

Karen Elliott House has seen Allaster managing people and politics beyond a swish event. “Stacey is a natural leader who really does appreciate her team,” says House, the former publisher at The Wall Street Journal and a member of the WTA’s advisory board. “When she thanks her team, she means it. She’s not condescending about it as so many others are.” But Allaster’s not afraid to push things through on her own. For example, House points to how Allaster was able to get a US$15-million advertising campaign off the ground in June despite disagreement. While proposing the campaign, the largest ever for the WTA, Allaster recognized consensus wasn’t possible. But rather than let the project stall, Allaster ensured the top decision-makers were onboard, then launched the project anyway, which is now running on airwaves and billboards, featuring the tag line “Looking for a Hero?” and stars such as Venus Williams transforming from regular people to tennis superheroes.

At home, Allaster is just one of those regular people, trying to balance time with her young family and learning how to say no to business-related social engagements. When she travels, she takes the overnight flights to maximize time with her family, and she packs her agenda to make the most of her time away. Still, Allaster admits travelling for one-third of the year and raising two young adopted children, who are four- and six-years-old, is a tough balancing act. “I’ve got what you’d call a mixed doubles partnership with my husband,” she says. Husband John Milkovich, an educator, is currently staying home with the kids in their Florida residence. “I’m fortunate he can stay at home. I couldn’t do this job without his support and without his help managing the kids.”

One thing Allaster doesn’t have time for is playing the game she tirelessly promotes. She hasn’t picked up a tennis racquet for eight months, except for the purpose of a Canadian Business photo shoot and an occasional hit with her kids, because she no longer finds it a release from work. Still an athlete by nature, she has turned to the green pastures of golf. That’s not to suggest tennis bores her. Allaster’s enthusiasm is still very apparent whenever she presents a new strategy to the board, says House.

Allaster admits to occasionally reflecting on her position and the people she has met — including childhood idol, tennis champ Chris Evert — and being proud of her accomplishments. The little girl from southern Ontario never expected to be the top female in women’s tennis, but whether Allaster’s next challenge is facing a volley from players, fans, advertisers or sponsors, she’s likely to hit a winning return.