David Owen

We are entering an interesting period for the politics of tennis, with International Tennis Federation (ITF) President David Haggerty facing three challengers to his bid for a second term.

The trio – all male – are Anil Khanna from India, who lost out by just eight votes when Haggerty was elected four years ago, Ivo Kaderka from the Czech Republic and Ireland's Dave Miley. The decisive vote is scheduled for September 27 at the ITF Annual General Assembly in Lisbon.

With just over three months to go, I thought it would be a good time to take a look at the ITF's financial performance under Haggerty.

Unlike other more backward Summer Olympic International Federations, the ITF publishes its financial accounts, making such an exercise possible.

Broadly speaking, between 2015 and 2018, the ITF lifted income by a bit more than $20 million (£16 million/€18 million), or around 40 per cent, to $72.8 million (£58 million/€65 million) – a reasonable, if hardly earth-shattering, rate of progress.

Expenses climbed by more than $20 million too, from $54.1 million (£43 million/€48.3 million) to $76.7 million (£61 million/€68.5 million).

This meant that a pre-tax deficit which had amounted to $2.7 million (£2.15 million/€2.4 million) in 2015 reached $5.4 million (£4.3 million/€4.8 million) in 2018, although surpluses were recorded in both intervening years.

On the income side, a big chunk of the advance was down to two new contracts.

Income from data sales broadly doubled to $12.5 million (£10 million/€11.2 million) in 2017 and $12.7 million (£10.1 million/€11.3 million) in 2018. According to a business review in the 2017 accounts of a subsidiary, ITF Licensing (UK) Limited, this arose from "the first year of a new five year contract with Sportradar".

As the review goes on to explain, "80 per cent of the net income, after deduction of integrity costs, is paid to member nations in support of pro-circuit tournaments and the mission of developing and promoting tennis around the world".

David Haggerty faces three challengers for the International Tennis Federation Presidency ©Getty Images
David Haggerty faces three challengers for the International Tennis Federation Presidency ©Getty Images

Media rights and licensing income also rose sharply from $8.9 million (£7.1 million/€8 million) in 2016 to $13.5 million (£10.7 million/€12 million) in 2017 and $14.4 million (£11.5 million/€12.9 million) in 2018.

The previously-mentioned business review ascribes the 2017 increase to "the first year of a media rights partnership agreement with beIN Sports".

This, the review notes, "is in place until 2021". It adds, however, that "$3 million (£2.4 million/€2.7 million) of this increase reflects the reclassification of payments made directly to national associations previously netted off against income".

Expense hikes have come across a wide range of areas, although it is worth noting that the federation boosted staff numbers by a third from 95 in 2015 to 127 in 2018 while seeing staff costs rise only from $10.2 million (£8.1 million/€9.1 million) to $10.9 million (£8.7 million/€9.7 million) – an increase of seven per cent.

Having fallen from $9.2 million (£7.3 million/€8.2 million) in 2015 to $6.3 million (£5 million/€5.6 million) in 2016 – a reduction explained by a cut in "other tennis development costs", including iCoach and salary costs – tennis development expenses climbed to $11.7 million (£9.2 million/€10.4 million) in 2018. That was equivalent to some 16 per cent of the ITF's overall 2018 income.

Within this, the contribution of the Grand Slam Development Fund edged up from $2.2 million (£1.75 million/€2 million) in 2015 to $2.6 million (£2.1 million/€2.3 million) in 2018.

Funds allocated to the ITF Development Programme, meanwhile, advanced by nearly $4 million from $2.6 million (£2.1 million/€2.3 million) in 2015 to $6.5 million (£5.2 million/€5.8 million) in 2018.

Expenditure on the Wheelchair Tennis Development Fund actually edged down from $100,000 (£79,600/€89,300) in 2015 to $96,000 (£76,400/€85,700) in 2018.

Of course, the ITF's finances are set to receive a substantial boost as a consequence of the reforms to the Davis Cup that were approved by federation members last year.

Under these, the venerable old competition is being transformed into a season-ending 18-team event. A 25-year licensing deal has been agreed between the federation and the investment group Kosmos, which was founded by Barcelona footballer Gerard Pique.

One suspects that Haggerty's re-election prospects will hinge more than anything on the electorate's attitude towards this revamp.

The revamp to the Davis Cup will impact the accounts as well as being a key issue for the electorate ©Getty Images
The revamp to the Davis Cup will impact the accounts as well as being a key issue for the electorate ©Getty Images

In terms of the direct impact on ITF accounts, I would expect the federation's "receipts from events" to surge from $6.8 million (£5.4 million/€6.1 million) in 2018, owing to its new $44 million (£35 million/€39.3 million) Davis Cup licence fee. There will though be a drop in commercial revenues for the rights now licensed to Kosmos.

While I am given to understand that Kosmos will take on responsibility for paying out Davis Cup prize money – $18 million (£14.3 million/€16 million) – to the players, the ITF will continue to pay prize money compensation – now set at $9 million (£7.2 million/€8 million) – to national associations. 

Finally, while the ITF confirmed to me that Kosmos is taking on the whole commercial risk of the venture, there is a profit share arrangement that means the federation should share in the benefits if the revamp prospers.

A reshaping of the Fed Cup is also in the offing, while the rise to prominence of Japan's Naomi Osaka augurs well for next year's Olympic tennis competition in Tokyo.

Net proceeds for the ITF from Rio 2016 after deducting event-related expenses totalled $23.1 million (£18.4 million/€20.6 million). This is being recognised as income in four equal tranches from 2016 to 2019.

Whoever ends up leading it, the next four years will, you feel, be a vital and fast-moving period in the federation's 106-year history since it was founded as the International Lawn Tennis Federation on March 1, 1913.