Tennis Australia: The grand slam game
Why does tennis fascinate? What lies behind its soaring popularity? Clearly it has a lot to do with the game's gladiatorial nature; the spectacle of individual athletes contending for the big prizes and kudos of the top tournaments. At that level you could hardly call it a team sport, but as we have slowly begun to realise, star players only arise if there's the right infrastructure - if children can get involved early on, and young people access good facilities and coaching.
Craig Tiley doesn't seem to mind that he never made the big time as a player, having been a bit long in the tooth when he started playing in his native South Africa – at just 12! “I had coaches that were very passionate about coaching and teaching and I learned as much about the passion as the technique,” he admits. “I was not a good enough tennis player to make a career of it but I didn't mind that because I learned so many other things.” Well, you don't get to captain the national Davis Cup team if you aren't a mean player: that and the 'other things' he picked up about tennis are part of what makes him perhaps the highest profile leader in the sport today.
The Australian Open, with its 112-year history, starts the tennis year with a bang in January. Tiley has been running this event as Tournament Director since 2007 and since 2013 has combined this with the role of CEO of Tennis Australia (TA), the national governing body for the sport comparable to the Lawn Tennis Association in the UK. His path has not involved filling in too many application forms, something he puts down to three principles he has embraced: “First, remember you are going to meet the same people at different points in your career and theirs, so treat them as you have them treat you. Second, the easiest way to get something done is to work extremely hard at it. Third, be persistent.” His habit is to form a mental picture of his goals – as coach of the University of Illinois University tennis team he pictured holding up the National Collegiate Athletic Association (NCAA) trophy and being called to the White House, both of which came to pass. Later on he was to receive the US National Coach of the Year award also.
The picture that grew in his mind after he joined TA as Director of Tennis was visionary. “I saw an Australian Open that looked like one of the world's best entertainment events as well as a major sporting event.” The kind of event that Disney might envisage, he thought. It's not a textbook approach to management, but a logical one that has served him well, and that vision is what he has worked towards. Remember, he is persistent. “This job is one where you cannot work in the shadows. It is very open and transparent. People read and hear about the decisions you are making.” The stresses and the pressures of the job are accentuated because of its public nature.
It helps that Australia is mad about tennis. Tennis is the number one participation sport there. The Open draws around 550 players with about 450 full-time staff and 9,000 part-time staff employed by TA during the Open. Globally, it is followed by more than a billion fans. A lot of bucks stop at the CEO’s desk. “I am proud that the Australian Open is considered the most successful and biggest sporting event in Australia, and is right up there globally.” It is increasingly considered the benchmark for other events, an achievement he puts down to extraordinary teamwork. “My job as a leader is putting a good multinational team together. I am truly proud of these people.”
Transforming the Open
Let's look at the facts. In Tiley's four years at the helm, TA's revenues have more than doubled, from AU$150mn to more than $350mn. This accelerated growth was achieved partly, he admits, by unlocking much value that had been created in previous years, but most of it has been down to a bolder style. “We have taken some big risks because we knew there could be big rewards,” he says.
The biggest risk was to reinvent the organisation. The first step was to buy back the broadcasting rights for the Australian Open from domestic media rights partner Channel 7. Now TA is the only one of the four Slam organisers to bring its broadcasting in-house. “We started to control end to end production of our content, so we could make decisions on how it was going to be distributed globally. That unlocked the potential of all our national and global media rights partners, because now we could customise that content very specifically to those markets, whether language, who is playing, or time of play.” This at once allowed TA to optimise its financial return.
The cost of the rights buyout was recouped inside of two years. International broadcasters were happy to pay TA handsomely to receive fully-customised content which they don't have the luxury of getting anywhere else. With many businesses moving to outsource non-core activities, it's a different model, but bringing expertise in-house allows TA to control and monetise media rights, sponsorship, supply rights and add value and innovation via entertainment. It goes further than insourcing – for example, an R&D centre has been set up to coordinate with all Australian universities on innovations that can boost the bottom line. Tiley, a 'citizen of the world' himself, has gone international to hire the best commercial, media rights and entertainment people. “I have specifically designed the leadership teams around a very international model. We have looked out rather than in.”
The transformation of TA from being a tennis federation into a mid-size ASX-listed business, which is not only a tennis business but also an entertainment business, is in full progress. With production and broadcasting brought under control, the way is open to bring in wider entertainment events focused on music, kids, and food. The last of these is a no brainer in Melbourne, which has a strong culinary culture. “We brought in some of the best chefs and the best restaurants and put them right on site,” Tiley says. “We know that if you add music you are going to draw a big market so we have become a music promoter, with 80-plus bands and acts.” Of course all that can't be done in-house, so music promoters are brought in. Delaware North has been delivering catering services since 2013, and companies like Nickelodeon and, yes, Disney, ensure that the entertainment is a fit for the younger fans. “We know that if we don't introduce kids before the age of 15 to tennis they may never engage with it,” adds Tiley.
The principal asset
Rapid growth in revenues has allowed Tiley to increase headcount without breaching his vow never to increase the employment cost by more than 14% of total revenue. He's seen too many top-heavy sports federations. With a diverse and multicultural workforce of around 450, he has a refreshing approach to maximising productivity and job satisfaction.
Inclusion, diversity and equal opportunities are more than buzzwords: Tiley is a global advocate for opportunities for women and ensuring inequity in pay and gender is brought to an end. “We are one of the few organisations outside the UN that has adopted the Women's Economic Empowerment principles. The UN devised a test to monitor gender equity around pay, performance and opportunity. Tennis Australia was the pilot organisation in Australia and Southeast Asia, and we helped to get six or seven other organisations to join us in pilots.”
Working conditions at TA are illuminating. In place of maternity leave both men and women may take time off and return to the same job. There are rewards for taking annual leave, as Tiley adds: “In Australia everyone gets four weeks' leave. I want our people to take their leave and get a break, so if they take their four weeks within 12 months they get an extra week.” One day a year the workplace stops and the time is devoted to health and wellbeing with dentists, skin and eye doctors coming on site and lectures and workshops on things like depression and stress. On top of that, there are generous bonuses for performance – needless to say a high proportion of staff qualify.
Clock-watching is a thing of the past. Working from home is allowed in many circumstances - the organisation will pay set up and maintenance costs to equip the employee's home with all the devices and connectivity to intranets and website business portals they need.
A key aspect of this transformation is the growth of the popularity of the Australian Open overseas, particularly in China. Tiley explains: “To ensure that we fully embrace the opportunities of global growth we have opened up several international offices including in Europe and Hong Kong which will allow us to focus on engaging local markets and forming strong strategic and commercial partnerships.”
Growing the game
This year there were no Australians left after the first week of Wimbledon, but Craig Tiley is not despondent. The tradition speaks for itself and that evening he was at the annual TA barbecue celebrating 30 years since Pat Cash took the title and 50 since John Newcombe's success. “The challenge today is there are many more nations playing the sport and tennis is competing with many other activities for good talent. We have to do well in these events and provide the kids with aspiration to choose tennis as their sport. It is great non-contact exercise, highly social, attracts girls and boys alike. These are great values but we haven't been very good at taking away the barriers. One of these is access to facilities and their cost. Second, the governance of tennis worldwide is very complicated. Third, I don't think we are doing enough innovation. Those are three things we absolutely have to resolve or we'll become a sport of low participation and dwindling relevance.”
Tennis is well behind when it comes to data capture and analysis. It needs to take lessons from retail and use technology to find out about its consumers and what they want, just as they do in the shopping sector. “If we can do that we can adjust our programmes and products to suit them. We need to match today's technology and behaviours so you can use your mobile phone to book a court, communicate with your partner, pay direct, show up and have the gate open for you.” In fact, both TA and the UK's Lawn Tennis Association (LTA) have accessed technology that can do that through a company called SportLabs. 400 clubs in Australia trialled it last year, he says, and recorded an average 30% increase in revenues as a result
The right equipment helps access too. “We have to look at balls and strings and racquets, and formats too. We can now have equipment to even it out so we can enjoy it better.” Rather like a golf handicap, he agrees, but achieved through modified equipment. A modified tennis format branded as Hot Shots is now played in 75% of Australian schools as part of their PE programme. It can be set up on any surface, and uses three types of ball and a choice of net and racquets geared to the player's level. Around 3,000 Australian children are playing this variant of tennis, Tiley says, of whom many will progress to the competition game as they get older – though Hot Shots is very popular among adults too.
Tiley is impatient to see less convoluted, more collaborative global governance in tennis, and does all he can to promote it. For now though, TA is developing as a benchmark for the rest. The Australian Open is different from the other Grand Slams in that its venue Melbourne Park is owned by the State of Victoria which invests in its development, with TA paying a percentage of revenues. It's a good deal for the state as during the 20-year current agreement period from 2016 to 2036, it's estimated that the economic impact will amount to more than $6bn. That makes the current investment of $1bn in redeveloping Melbourne Park very good value for the state - it has provided the site with three stadiums with retractable roofs, 50 tennis courts and a site that can manage 85,000 people a day. “We had a million people this year,” says Tiley. “We are building a new function centre, a new broadcast centre, a new player area that is under construction now and we are putting in another 5,000-seat court in the precinct.” An eight story administrative centre, Tennis HQ, has already been constructed as part of the current redevelopment that will complete in 2021.
When he took on the top job at TA, Tiley sat down with his senior executives to set down the values of the organisation - the formula he had brought with him fitted perfectly: “Excellence: every time I do anything it has to be first class. Loyalty: to your cause and to each other. Teamwork: do it together as a team. Humility: keep your ego in check.” His coaching background was doubtless as good a preparation for running a successful business as any MBA, he concludes. “In any leadership role your attitude should be that you can't know everything, so surround yourself with people who know more than you do. My job is to provide them with a pathway so they can excel.”