Lawn Tennis Association reveals the cost of the Covid-19 crisis and the cancellation of Wimbledon
Britain’s Lawn Tennis Association has revealed the financial implications of a Covid-affected 2020 for British tennis, with the organisation’s incoming dropping by 40% in a year that saw the cancellation of Wimbledon for the first time since the World War II.
The LTA’s finances were severely hit by the cancellation of the entire summer of tennis, with the lucrative ATP Tour event at Queen’s Club among the casualties of a summer that saw all grass-court tournaments in England cancelled.
The full cost of that fall-hit has now been revealed, with the key points outlined here:
- The LTA’s 2020 income is down by 40% – a drop of approximately £30m
- To make-up this shortfall, in addition to cancelling events and using the furlough scheme, the LTA has so far cut over £10m of spending in other areas
- In order to manage cash flow, the LTA is taking out a £15m overdraft facility secured against its reserves
- The LTA is planning prudently for a challenging financial outlook in 2021
- The financial implications of the operational scenarios for The Championships 2021 and the LTA’s major grass-court events vary in impact but could be severe
- Discussions with the Government about what support they can offer continues alongside other sports
- The LTA is working hard to ensure that tennis is in as strong a position as possible for the future
The LTA’s financial outlook for 2021 is almost entirely dependent on the operational outcome of the LTA’s major events and The Championships in 2021 and therefore the LTA needs to continue to take a prudent approach.
BREAKING: This summer's Wimbledon has been cancelled due to coronavirus, the All England Club has confirmed.
— SkyNews (@SkyNews) April 1, 2020
With The All England Club actively planning for The Championships 2021 based on three broad scenarios – a full capacity, a reduced capacity, and no capacity – with the financial implications of these scenarios varying in impact, given that The AELTC has no pandemic insurance for 2021.
The LTA uses the income it receives from all sources, including The Championships’ surplus, to support British tennis from the grassroots to the professional game. This includes events, participation programmes, performance pathway, and support for professional players, coaches and venues.
“We have already taken important steps to mitigate the environment we have faced this year and we have a plan to manage the challenges ahead,” stated LTA CEO Scott Lloyd (below). “We are all working hard to ensure that tennis is in as strong a position as possible for the future.”
“The AELTC are actively planning to stage The Championships 2021 based on three scenarios and we will do all we can to support them in delivering this.
“We are also doing all we can to deliver our own event calendar under very challenging circumstances, and to deliver events in a COVID-secure manner, all of which makes planning very difficult.
“Given the significant range in financial implications within these scenarios, with the behind closed doors scenario as the most severe, it is our responsibility to plan very carefully and continue to take a prudent approach.
“We also have to bear in mind that whatever form the events go ahead in, it is likely the economic outlook will remain difficult and the market for sponsorship and hospitality will remain depressed for a number of years.
“Whilst all sports are suffering, as a national governing body we have a significantly smaller turnover and expenditure than football, cricket and rugby union and so have to be mindful of taking a cautious approach to our budgeting for 2021.”
The caution is necessitated because the LTA’s reserves will be acting as collateral against the organisation’s overdraft, whilst discussions with the Government about what support they can offer continues alongside other sports.
Separate to this the reserves held by the LTA Trust are used by the charitable entity for long term facility investment rather than operational expenditure.
Wimbledon took out an insurance policy for 2020 in case they were forced to cancel The Championships, with negotiations over the final pay-out on that policy still ongoing.
In the meantime, in order to manage cashflow effectively through the next few months and into the first part of 2021, as well as prepare for summer 2021, the LTA is putting in place a £15m overdraft facility, secured against its reserves.
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