Just thought it might be worth posting this from a couple of months ago.

The fallacy of equal prize money:

Women's tennis pays £25m every year to keep prize money equal with men
Pay gap between men's and women's tennis is widening, and the women's tour wants "the marketplace to step up"
By Simon Briggs, TENNIS CORRESPONDENT
23 May 2023 7:02am

Tennis has long trumpeted the fact that its biggest events pay equal prize money to male and female performers. Yet this impression of equality is being maintained only via a secret subsidy of almost £25million from the Womens Tennis Association.

The hidden investment is propping up female prize money at the four biggest combined events below the slams: namely Indian Wells, Miami, Madrid and Beijing. The Association of Tennis Professionals, which runs the mens tour, makes no equivalent direct contribution towards event prize money.

The hidden subsidy is not the creation of WTA chief Steve Simon, but dates back well before his appointment in 2015. Each successive head of the WTA must have hoped that the societal march towards gender equality would eliminate the pay gap, by levelling up the market value of the women.

In the event, the opposite has happened. The ATP has been able to grow revenues off the back of the golden generation of Roger Federer, Rafael Nadal and Novak Djokovic. Yet these combined events have not lifted the pay offer commensurately for the women. In a classic example of tenniss dysfunctional governance, the ATP is setting the level for prize money at combined events, but the gap with the WTA is only growing larger.

This places the WTA in a potentially unsustainable position over the long term. The sums are most significant at the four Premier Mandatory tournaments. The owners of these events who include Oracle billionaire Larry Ellison for Indian Wells, and super-agency IMG for Miami and Madrid are paying only 38 per cent of prize money.

The WTA is stumping up the other 62 per cent, which comes to almost £4.4million per tournament. Six other significant events Doha, Dubai, Wuhan, Rome, Cincinnati and Toronto/Montreal are also being subsidised in a similar way. Here is the background for a scathing editorial published last week by John Millman, formerly a member of the ATP Player Council, on the news.com.au website.

Equal prize money between men and women in tennis can be put to bed, wrote Millman. It wont be happening. Principles and tennis equality have been thrown out the window thanks to some poor decision-making by the WTA. Millman did not mention the hidden subsidy, but he did list the relative incomes of the tours from 2021, which found the ATP on £142million and the WTA on £71million.

For purposes of comparison, the ATPs golfing cousin at the PGA generated £1.28billion in revenues in 2021, but then it runs events itself, whereas the tennis model involves leasing franchises to third parties. The WTAs ongoing commitment to equal prize money at the big events has placed a huge strain on its finances.

On signing a four-year, £64million deal with new sponsor Hologic last year, it front-loaded its income, receiving £40million at once to help with cash flow. It then sold off 20 per cent of its commercial operation to private equity firm CVC in March, in return for another £120million of ready funds.

The subsidy was particularly useful for the recent Mutua Madrid Open, which stood accused of discriminating against female players on scheduling and other issues. The criticism would surely have grown far louder had it been generally known that the tournament was supplying less than £3million of the £7million prize money received by champion Aryna Sabalenka and her rivals.

When tournaments are challenged on prize money differentials, they usually point to market forces. Recent figures suggest that combined events such as Madrid have been receiving almost 10 times as much from ATP Media as they do from the WTAs equivalent TV deal with Perform.

The four grand slams are anomalies in genuinely paying out equal prize money, but it could be argued that they are so rich, they can afford to be governed by principle as opposed to strict commercial logic. The WTAs commitment to equal prize money exists only at the largest tour events outside the slams.

Lower down the pyramid, the sums have long been known to be unequal. A study undertaken by the Financial Times last year determined that the total prize money awarded on the mens tour so far this year is 75 per cent higher than on the womens, the widest the gap has been since 2001.

The picture is further complicated by the ATPs bonus pool and profit-sharing systems, which offer £16million to the top 30 players among other benefits. There is no equivalent on the WTA Tour. Telegraph Sport asked the WTA for comment on these issues and received the following reply:

The WTA has always and will continue to push towards the equality our athletes deserve and to ultimately achieve equal levels of compensation at all levels of our Tour. The Millman article and thoughts you raised about Madrid are both flawed and accurate at the same time.

The issue of equal prize money is not about strategy as both Tours have similar strategies. It is about the realities associated with the value the marketplace pays for the rights of a womens sport property vs. that of a male sports property. As pointed out by Mr Millman, there is a significant difference in the rights fees and sponsorship fees paid by the market for what is a similar set of rights.

This is unfortunately true across all womens sport properties and is the direct result in the differentiation in compensation levels we see. It is time for the marketplace to step up and support womens sport properties at the levels they deserve. Events such as Indian Wells, Miami, Madrid and Beijing that pay equal prize money deserve the acknowledgment and appreciation for their commitment in this space.

Despite the difference in distribution levels that are provided to these events by the ATP and WTA, each of these events have committed to making the incremental investment from those ticket and event- related sales to make sure that all athletes are compensated equally as deserved. They should be celebrated, and with Romes recent announcement that it will be paying equal prize money by 2025, progress, while never fast enough, is being made.