Gary Horvath is a USPTA master pro, founder and past president of the USA Professional Platform Tennis Association, charter member of PPTR, a certified coach with USA Volleyball and a long-standing member of the Wilson Advisory Staff.
His experience as a tennis pro has covered the entire spectrum from grassroots to college tennis. In addition, Gary Horvath has conducted extensive business and economic research that has largely supported the state of Colorado's economic development efforts.
HOW PRODUCTIVE IS THE U.S. TENNIS INDUSTRY?
When was the last time you heard tennis professionals discuss productivity and GDP?
Probably never, but today is a new day!
By Gary Horvath
What Exactly is Productivity?
To begin, consider productivity at the company level. Roger retired and decided to make and sell wooden tennis racquets. Inputs required to produce the racquets include wood, varnish, equipment, and labor. The racquet is the output.
In the first week, Roger produced one racquet every eight hours. His output for one day was one racquet.
After a month, Roger developed a more efficient manufacturing process, and his skills improved. He produced eight racquets in eight hours. His output improved to eight racquets in one day.
He increased his output without increasing the time he worked. That means his productivity increased. Historically, increased productivity has led to higher wages for workers and greater profits for the companies.
Gross Domestic Product, Productivity, and the Tennis Industry
Simplistically speaking, the economy is a group of companies that make stuff (goods) or do stuff (services). The GDP is the market value of all final goods and services produced and sold by these companies. The current GDP of the U.S. is about $23 trillion.
The yellow table below compares the productivity for each sector (GDP divided by the number of FTE employees). Gad Levanon, an economist from Burning Glass Institute, posted this analysis on LinkedIn. The table does not include all sectors of the economy, but it looks at some of the most and least productive industries.
Unfortunately, there is no NAICS code for the tennis industry. That is because it includes businesses in different industry sectors.
The data in the middle column is the 2021 Gross Domestic Product per Full Time Equivalent person. The highest-ranked industries, determined by NAICS Code, require extensive capital in production, such as land, equipment, or structures. In addition, these sectors typically employ very highly skilled workers. As a result, their productivity is higher.
Generally, the lowest-ranked industries are less capital-intensive, and many occupations require a lower skill set. For these reasons, their productivity is lower.
Tennis Productivity Compared to Other Industries
The tennis industry includes companies from the following sectors:
Broadcasting – A handful of companies provide extended media coverage of tennis events, such as Tennis Channel (Sinclair Broadcasting), ESPN, NBC, and CBS. Its primary contribution to the tennis industry is providing entertainment and exposure to the sport.
Spectator sports – This sector includes the playing professionals and the major spectator events such as the U.S. Open, Miami Open, Cincinnati Open, and Indian Wells.
Accommodation – A small segment of the hospitality industry is hotels/resorts that highlight tennis. Many tennis resorts are in sunbelt states.
State and Local Government – College tennis programs and facilities are included under the state government. Programs and facilities for recreation departments and public schools are in the local government sector.
Construction – Tennis court construction and repair are essential to the growth and retention of tennis facilities.
Administrative Support – Support organizations such as the USTA (excluding the U.S. Open operations), USPTA, PTR, ITA, and other allied organizations provide support services to the industry.
General Merchandise – Tennis purchases at pro shops, specialty shops, sporting goods stores, or online retailers would be in the broad general merchandise sector, such as Dick’s Sporting Goods, Game-Set-Match, or Tennis Express.
Educational Services – The educational services sector includes private tennis instructional programs. Private university programs and facilities are also part of the sector.
Recreational Industries -Private sector clubs and facilities are classified in the recreational industry.
Improving Productivity in the Tennis Industry
While most tennis professionals do not directly talk about improving productivity, they often talk about improving the efficiency of their operations or revenue generation. For example, speakers at a recent USPTA divisional conference focused on increasing revenue and profitability by optimizing the court space needed for lesson programs. Specifically, it is possible to run multiple junior sessions on one court.
Another suggestion was to increase revenue by setting up temporary pickleball courts on one tennis court. In extreme cases, pickleball courts would permanently replace tennis courts.
Over the years, tennis professionals have increased productivity in many ways: group lessons, ball machines, video instruction, and various formats for group activities. Because the instructional portion of the tennis industry requires personal interaction, there may be limitations as to how much tennis professionals can increase their productivity, while remaining profitable and providing customer satisfaction.
Takeaways from a Discussion about Productivity in the Tennis Industry
There are a handful of takeaways from this analysis.
The tennis industry includes many sectors of the economy. As a result, it is decentralized and may not always operate as an efficient and functional industry.
Many tennis-related industries have lower capital investment and equipment. In many cases, these industries require workers with lower skill sets. Occupations may include retail sales, desk clerks, maintenance staff, support services, court construction and repair, and entry-level coaches. Higher-level occupations usually require typical management skills.
The tennis industry has a minimal impact on employment and GDP in most local, state, and U.S. economies. Its primary value is health and exercise, teaching life and social skills, and entertainment. Industry leaders should emphasize these benefits in promoting the sport.
In 2023, the country’s economic conditions will challenge many of the tennis-related industries to control their input costs, increase their output, and improve their level of productivity.
Each sector of the tennis economy plays a different role in the industry's success. With the chances of a shallow recession on the horizon, each sector will play a critical role in retaining the 9 million core players and the 15 million infrequent players.
See you on the courts!
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