Is Mercedes-Benz’s $500m WTA Tour partnership value for money?
With the deal between Mercedes-Benz and the WTA Tour well underway, Matt Hardy heads to Madrid to see if its value for money.
The supermarket meal deal, the cost of an upgrade to business class, the Category A versus Category B match ticket; value for money is one of capitalism’s greatest dilemmas.
It is a decision which demands buyers weigh up the pros and cons of whatever is on the market before committing to one choice or another.
When Mercedes-Benz did that last year it concluded with an outlay Morning Wire understands amounts to $500m for a decade-long deal with the WTA Tour, the tennis circuit featuring the world’s top female tennis players. WTA Ventures’ chief business officer Teodora Ivanova Limon described the deal as one which saw values, global scale and premium positioning aligned.
The Mercedes-Benz lifeline
The German carmaker, whose inaugural Benz Patent-Motorwagen was made 140 years ago, is playing the part of one hell of a lifeline at the moment.
While the WTA this week announced a five-year deal with Accenture, the sponsorship world cannot ignore PIF, the Saudi Arabian sovereign wealth fund that is pulling out of sport at a rate of knots. It is assessing what is value for money, and has decided that it is not LIV Golf or snooker. So what about tennis?
PIF sponsors the world rankings through the tour’s commercial arm: WTA Ventures.
Its chief brand officer Sarah Swanson suggested that PIF had not indicated a desire to exit tennis – after all, the kingdom has plans for the sport in the coming years – but she says the length of the Mercedes deal is “something we can count on” in what is a “complicated” sport.
Complicated is a word, too, on the lips of the WTA. The organisation’s chief executive Portia Archer is heading for the door after fewer than two years in post, to the disillusionment of some players. “I felt like she listened to what we had to say,” said Iga Swiatek.
Mercedes-Benz bigwig Mathias Geisen, looking out of a suite at the Madrid Open onto the German car-clad nets atop the clay courts below, says that he has no concerns about Archer’s replacement. “We are absolutely convinced this is a great partnership,” he adds.
China is coming for sport
So where does Mercedes go with this deal? Perhaps China and the younger generation. Geisen is adamant it is no coincidence that it is sponsoring a tour that is so keen on exploiting the Chinese market, given the quality of players coming from the continent. “It feels good” to be branded in the Far East, he says.
“You might think they’re only focused on digital platforms like Instagram, and while that matters, they also want real-world engagement with the brand,” Geisen adds on the younger generation.
But those youngsters, and older generations too, were puzzled by the sparse attendance for an exciting final between the triumphant Marta Kostyuk of Ukraine and Russia’s Mirra Andreeva in Madrid last week. “Why are there so many empty seats?” one spectator asked. “You cannot solve misogyny in Spain overnight,” another offered.
Value for money in this partnership – only four months into a potential 120-month agreement – may require those attitudes changing in forthcoming editions of the Madrid Open. Tournament co-director and former Wimbledon winner Garbine Muguruza pointed out it is the only WTA event in Spain. Could there be another?
Is the WTA Tour value for money?
“If Mercedes is seeing value for money,” Swanson states, “then we’re seeing value for money and that we’re delivering that for our premier partner. No question. But for us, are you kidding? What a brand match.”
Sport business expert Professor Rob Wilson says both sides get what they want out of the deal: the automotive giant gaining brand exposure to a high-value demographic, and the WTA stability and credibility.
Industry expert, MSQ Sport + Entertainment’s Steve Martin, says Mercedes has overpaid in what is a “fragmented” sport.
The deal between Mercedes-Benz and the WTA Tour is a signal of where the sport sits at the moment amid a glut of competition from leagues, teams and players across the board. There’s confidence in the deal on both sides despite a changing global landscape, but it’s fair to say that the WTA needs Mercedes more than it needs the tennis body.
The “WTA Tour Driven by Mercedes-Benz” has never been a truer name for an organisation with a title partnership, because it is certainly not the other way around.