ADELAIDE, AUSTRALIA - JANUARY 18: A ball kid holds tennis balls during the men's singles grand final between Lloyd Harris of South Africa and Andrey Rublev of Russia on day seven of the 2020 Adelaide International at Memorial Drive on January 18, 2020 in Adelaide, Australia. (Photo by Paul Kane/Getty Images)
Tennis | LTA announces financial measures after a 40% drop in income for 2020
LONDON, UK – The LTA have not been immune to the financial impact of the coronavirus as an impacted season contributes to an income drop of almost £30m.
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The Lawn Tennis Association (LTA) announced that its income for 2020 was down by 40% – approximately £30m as the impacts of COVID-19 continue to make an impact on the sport.
As we approach the first full week of Lockdown 2.0. grassroots tennis has again been hit hard as courts were told to close for the duration, as well as tournaments continuing to be held around the world with limited or no spectators.
Even during the more optimistic news of a potential vaccine, there is still a lot of uncertainty surrounding the start of next season.
In a financial briefing by the LTA, the key points were:
The LTA’s 2020 income is down by 40% – a drop of approximately £30m
To make up this shortfall, in addition to cancelling events and using the furlough scheme, the LTA has so far cut over £10m of spending in other areas
To manage cashflow the LTA is taking out a £15m overdraft facility secured against its reserves
The LTA is planning prudently for a challenging financial outlook in 2021
The financial implications of the operational scenarios for The Championships 2021 and the LTA’s major grass court events vary in impact, but could be severe
Discussions with the Government about what support they can offer continues alongside other sports
The LTA is working hard to ensure that tennis is in as strong a position as possible for the future
The financial situation in 2020
The LTA had to face several financial challenges, which included uncertainty over the level of income this year, and the loss of ticket, hospitality and sponsorship revenue.
To offset the 40% reduction in revenue, the LTA cancelled their own events as soon as possible, accounting for approximately 2/3 of the loss of revenue), and where they could, accessed the Government’s furlough scheme in order to cut £10m of spending across the organisation.
The AELTC is continuing to make good progress in concluding their insurance claim for the cancellation of The Championships this year, from which the LTA will receive the 2020 surplus. In order to manage cashflow effectively for the next few months and into the first part of next year, as well as preparing for the resumption of events in time for summer 2021, the LTA is putting in place a £15m overdraft facility, secured against their reserves.
The LTA’s financial outlook for 20201 is heavily dependent on the operational outcome of the LTA’s major events and the Championships in 2021. The AELTC is actively planning for The Championships 2021 along three scenarios – full capacity, reduced capacity or behind closed doors – and it is important to note that the AELTC’s pandemic insurance will not exist for 2021.
The LTA uses the income it receives from all sources, which includes the Wimbledon surplus, to support tennis from the grass-roots to the elite levels of the game.
Scott Lloyd, CEO of the LTA said: “We have already taken important steps to mitigate the environment we have faced this year and we have a plan to manage the challenges ahead. We are all working hard to ensure that tennis is in as strong a position as possible for the future.”
“I’m pleased that the prudent approach we have taken to our financial management in 2020 has meant that we’ve been able to limit our own losses whilst still delivering financial support to venues and individuals across tennis who have been affected by the pandemic.”
Lloyd continued: “The AELTC are actively planning to stage The Championships 2021 based on three scenarios and we will do all we can to support them in delivering this.
“We are also doing all we can to deliver our own event calendar under very challenging circumstances, and to deliver events in a COVID-secure manner, all of which makes planning very difficult.
“Given the significant range in financial implications within these scenarios, with the behind closed doors scenario as the most severe, it is our responsibility to plan very carefully and continue to take a prudent approach.
“We also have to bear in mind that whatever form the events go ahead in, it is likely the economic outlook will remain difficult and the market for sponsorship and hospitality will remain depressed for a number of years.
Whilst all sports are suffering, as a national governing body we have a significantly smaller turnover and expenditure than football, cricket and rugby union and so have to be mindful of taking a cautious approach to our budgeting for 2021.”
The professional season is drawing to a close with the ATP Tour Finals concluding a fragmented season behind closed doors at the O2 for its final year, between 15-22 November.
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