Gary Horvath is a USPTA master pro, founder and past president of the USA Professional Platform Tennis Association prior to its merger with USPTA, a certified coach with USA Volleyball and a long-standing member of the Wilson Advisory Staff. His experience as a pro has covered the spectrum from

FEBRUARY 2020

grassroots to college tennis. In addition, Horvath has conducted extensive business and economic research that has supported Colorado's economic development efforts.

grassroots to college tennis. In addition, Horvath has conducted extensive business and economic research that has supported Colorado's economic development efforts.

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FEBRUARY 2020 FEATURE

Can the Tennis Industry Bounce Back from Its Downturn?

Tennis Industry Underperforms in Solid Economy

by Gary Horvath

Between 2010 and 2018, the United States economy enjoyed annualized real GDP growth of 2.0%, an increase of 18.7 million wage and salary employees, and an increase in the population of 18.4 million people. This steady growth is part of the country’s longest-running economic expansion.

In this economic environment, total tennis participation and unique registrations in the USTA League trended downward at an annualized rate of -0.7%. In addition, TIA’s tennis equipment index fell to 98. This is the first time since 2003 this measure of the wholesale value of racquets, balls, and strings has dipped below 100. To make matters worse, the index is not adjusted for inflation.

The Tennis Downturn and the Fertility Rate

The downward trend in participation was driven by a series of self-inflicted wounds by the industry and a change in the fertility rate (Chart I). Many factors, including financial uncertainty caused by the Great Recession, have caused some women to have smaller families or postpone having children.

 

Unless there is a drastic uptick in immigration, the lower fertility rate will cause the U.S. population to increase at a slower rate. As a result, the pool of potential tennis players will increase at a slower rate than in previous years.

The Dwindling Pipeline

Chart II summarizes changes in the annual U.S. population by age group for the years 2010 to 2018. In 2018 there were 997,381 fewer Americans under the age of 25 compared to 2010. In other words, the pipeline of potential new tennis players decreased during this period.

At the other end of the spectrum, in 2018 there were 19,441,896 more Americans over the age of 25 than in 2010. This reflects people aging and moving to an older age group. The largest increase was in the 65+ age category, a group of people who have not been a primary target for the tennis industry.

Population by Generation - 2010

 

Researchers frequently measure differences in people’s attitudes, preferences, and demographics by categorizing them into “generations” based on similar birth dates. The size and unique characteristics of each generation have an impact on their level of tennis participation and spending.

 

Chart III looks at the 2010 population by five defined generations. Special attention is given to the age groups 25 to 54 because it is the primary adult tennis market. A review of TIA data shows that about 70% of adult tennis players are in that age range. The remainder of the adult population is in the 18 to 24 or the 55+ age category.

The percent of the population in the primary tennis market (25 to 54 years) follows:

  • 25 to 34 years was 51% millennials and 49% gen X.

  • 35 to 44 was 100% gen X.

  • 45 to 54 was 10% gen X and 90% baby boomers.

 

For 2010, the mix of the population for the primary tennis market was:

  • 21,101,849 millennials, or 17%.

  • 65,541,573 gen Xers, or 51%.

  • 40,497,848 baby boomers, or 32%.

There were 127,141,270 people in the 25 to 54 age group for 2010.

 

Chart III shows that the larger group of baby boomers has been replaced by people from the smaller groups of gen X and millennial generations. It also shows that the number of baby boomers began to taper off at the age of 52.

 

Population by Generation – 2018

 

A similar analysis was conducted for the 2018 population. The percent of the population in the primary market is provided below.

  • 25 to 34 was 100% millennials.

  • 35 to 44 was 32% millennials and 68% gen X.

  • 45 to 54 was 89% gen X and 11% baby boomers.

 

For 2018, the mix of population in the 25 to 54 age group was:

  • 67,261,361 millennials, or 52%

  • 56,940,433 gen Xers, or 44%

  • 4,405,567 baby boomers, or 4%.

The baby boomers will be completely out of the primary tennis market in 2019. Also, the millennials have increased in size and the Gen Xers have stayed about the same size. There were 128,607,361 people in the 25 to 54 age group for 2018. This is an increase of 1,466,091 people over 2010.

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Observations and Questions from the Analysis of Generations

 

The mix of generations during the primary adult tennis years, 25 to 54, was more diverse in 2010 than in 2018. Assuming the characteristics of tennis players were similar to the general population, did the mix of these generations have an impact on the level of tennis participation? Did the teaching profession have a similar mix and if not, did the professionals adjust their programs and instruction to attract and meet the needs of the different generations? Was the sport marketed in a way to attract the ever-changing mix of generations?

 

Chart III shows the baby boomer population began decreasing at the age of 52 and at that point the decline was rapid. The data in charts III and IV shows the baby boomers declined from 77.0 million in 2010 to 72.5 million in 2018. In addition, the silent generation lost 9.5 million people in the aging process. Most likely, there was a similar pattern of changes in the tennis population.

 

The range in birth years for the baby boomers spanned 19 years, beginning in 1946 and ending in 1964. There was also a baby boom during this period, which is evident by a higher fertility rate at that time (Chart I). By comparison, the span in birth years for Gen X, millennials, and Gen Z generations was 15 years. The combination of a significant baby boom and the greater span between birth years allowed the baby boomers to have a greater presence than the silent generation that preceded them and the Gen Xers that followed them.

 

The oldest baby boomers entered the primary tennis market in 1971 and exited in 2000. The youngest boomers entered it in 1989 and made their final appearance in 2018. That is a span of 38 years (1971 to 2018) compared to 30 years for the other generations.

 

The presence of the baby boomers is shown in Chart V. For the period 1971 to 2018, there are 30 age slots ranging from 25 years to 54 years. A slot can be filled by only one generation, but the baby boomers can fill up to 19 slots and the other generations could only fill 15 slots. For example, in 1971 the first boomers entered the primary market at the age of 25 and they filled 1 slot. In 1972 they filled two slots, one in 1971 and 1972.

 

The strong presence and impact of the boomers were evident between 1989 and 2000. In each of these years, the boomers filled 19 of the 30 age slots. There were two periods, 1980 to 1988 and 2001 to 2009, where the baby boomers filled between 10 and 18 age slots.

It is reasonable to think the presence of the baby boomers was strong enough to build a foundation that supported the increase in tennis participation during the 2000s. Likewise, it seems evident the decline in participation during the “Lost Decade of the 2010s” was partially a result of baby boomers aging and exiting the primary tennis market.

 

Concluding Thoughts

 

Looking back, there are three takeaways from this analysis.

 

First, the U.S. population has been growing at a slower rate because of lower birth rates. This is happening across different races and within most countries around the world. This trend is presenting a challenge for the K-12 education system, higher education, and many organizations in the United States. It is a trend that will continue to impact the tennis industry in the future.

 

Second, a case can be made that the baby boomers helped lay the foundation for growth in the tennis industry during the 2000s. The “Lost Decade of the 2010s” was a function of the decreasing presence of baby boomers in the primary tennis market, the complacency of industry, and their focus on non-mission- critical activities.

 

Finally, the market for potential players will increase at a slower rate and there will be stiffer competition from other activities over the next decade. If the industry wants to reverse the downward trends of the “Lost Decade” its leaders must learn from the growth of the 2000s and the decline of the 2010s. They must be more focused and intentional in making business decisions that positively affect all areas of their operations. In short, industry leaders must keep their eyes on the ball.

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