Wimbledon still serving up profits

By James Melik and Martin Webber
Business reporters, BBC World Service, Wimbledon

There is no advertising but sponsors manage to get their message across

Professional sport, like every other business operating during the biggest global recession since the 1930s, has to balance its public appeal with commercial reality.

It's a particularly delicate balancing act when, as with Wimbledon, you only have one opportunity in the entire year to make an operational profit.

For two weeks at the end of June, the leafy suburb in south west London plays host to what is now, the only remaining tennis Grand Slam played on grass.

Unlike the other three Grand Slams, held in New York, Paris and Melbourne, Wimbledon does not allow advertising around the court.

Instead, the All England Tennis and Croquet Club has agreements with a range of brands and the income from these 'official suppliers' is an important part of the championship's revenue.

Expense justified

The most important source of revenue is the television and radio rights from the 180 countries which broadcast the event annually.

OFFICIAL SUPPLIERS 2009 Blossom Hill, wine Evian, bottled water Garnier Ambre Solaire, suncare G4S, security Haagen-Dazs, ice cream Hertz, transport IBM, IT HSBC, banking Lanson, champagne Nescafe, Coffee Polo Ralph Lauren, outfitter Robinsons, soft drinks Rolex, timekeeper Slazenger, tennis balls

One of the talking points at Wimbledon 2009 is the new retractable roof on centre court.

Some critics question whether an outlay of an estimated $100m (£60m) was justified when it does not rain all the time but Ian Ritchie, chief executive of the All England Club, points out that they have rebuilt a 1920s stadium which was in need of refurbishment anyway.

"Fifteen thousand people come here and it's their lifetime ambition to get a seat on centre court and I always feel very sorry for them if it rains and they miss it," he says.

"And in broadcasting terms, there is now a guarantee of live play."

He maintains that the innovation enhances the tournament as a whole and shows that the club is progressive.

"In a tournament of this stature the facilities here are expected to be world class," he asserts.

Additional revenue

Despite the modernised facilities there is a concern that the cycle of ever-increasing revenue from global TV rights is coming to an end.

Strawberries and cream and a glass of Pimms are all part of the experience

"You always have to be commercially realistic," Mr Ritchie says.

"From the medium to long term, with the fragmentation of TV audiences, broadcasting rights are going to be under pressure."

He maintains however, that premium events will always command a premium sum and that will continue for some time to come.

"We are not complacent but most of our contracts are for five years and they have all been renewed on enhanced terms," he says.

Matthew Thompson of the catering group Compass, which looks after corporate hospitality and catering at Wimbledon, including the royal box on centre court, is more pessimistic.

Overall, corporate hospitality has fallen and he is employing 20% fewer staff this year.

There are fewer clients and they are less lavish in their entertaining.

"It's a tough market and we start selling a year in advance," he says.

"Overall the market is down but we are no different to any other sector in the economy."

It's a party, people come here for ten hours Ian Ritchie, chief executive All England Club

The All England Club's Mr Ritchie says commercial hospitality represents only a very small proportion of the tournament's revenue and sees the decline as a softening rather than a disaster.

Delicate balance

Mr Ritchie says there will be more changes, but it has to be at the right pace and the right innovations have to be selected.

He believes the club has been able to modernise without losing the charm of a local tennis club.

"We introduced Hawk-Eye, changed the scoreboards, and have a significant digital output for viewers and listeners around the world," he says.

"You do not stay at the forefront of a world event unless you change. If you say, 'It worked well in 1922, let's keep it like that,' it is doomed to failure," he insists.

"Like any product, we choose what are the core assets of the brand," he says.

And it's a brand which has encouraged Wimbledon to open stores in China and Japan, while hundreds of thousands of visitors from all over the world to attend the tournament every year.

Hawks are employed to scare the pigeons away from the courts

"It is a party," he enthuses.

"Of course you hope the tennis will be fantastic but equally, people come here for a day - not like a football match where you come for 90 minutes - people come here for 10 hours."

That party spirit is likely to continue to draw people to what is quintessentially a very British event in an increasingly corporate-driven world.

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