French Open expecting dip in sponsorship revenue

Roland-Garros French Open is expecting a decline in sponsorship revenues due to restrictions on the number of fans attending the Grand Slam tournament. The French government has decided to limit spectators in arenas due to the spread of coronavirus.

Initially, the French Tennis Federation introduced a model that would allow spectators to fill in 50-60% of the space in the venues or a maximum of 20,000 individuals per day. However, the rise in infection cases in France again this month saw the number of spectators to be capped at 1000 per day, comprising 750 fans, 200 sponsors, and 50 for players and staff.

The new guidelines of French government have been a big blow for the tournament. The gate revenues are important for the tournament as they constitute a major chunk of revenue. Along with fans, sponsors are also set to face the brunt of the new guidelines.

There could be negotiations with sponsors to alter the terms of deals. Rights that are linked to the in-stadia capacity, in relation to hospitality and/or sales opportunities, fees could now be reduced to reflect the reduced in-stadium capacity.

Sponsorship rights linked to broadcast are unlikely to suffer since broadcasters have a contractual obligation to air a minimum number of hours. Similarly, digital rights will also be delivered with no reduction in value.

Although there is a decline in revenue for 2020, the officials are confident of bouncing back strongly next year by making good profits in terms of commercial business. This is mainly due to the long-term nature of many deals and the potential for making-good arrangements well in advance.

Leading up to Roland-Garros 2021, the FFT will look to work with specialist agencies in China, India, and the US to help sell in those markets where it has a limited network

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