This year’s Australian Open, where Japan’s Naomi Osaka won her second Grand Slam title, set records in both attendance and prize money.
For that, organizers can thank big Chinese sponsors whose cash is driving the tournament’s growth.
Osaka is the first Asian tennis player, male or female, to climb to the top of the world rankings, thanks to her victory against Petra Kvitova in the riveting women’s final on Jan. 26.
On the Open’s last day, Novak Djokovic, who won a record seventh Australian Open title, thanked Tennis Australia, which runs the grand slam tournament each year. “There’s probably no other tournament in the world that strives to improve its facilities and service to the players and fans and media,” the Serbian superstar said.
Rafael Nadal, who lost to Djokovic in the men’s final, lauded the event and thanked his South Korean sponsor. “Thank you very much,” the Spaniard said. “Specifically, my personal sponsor since the beginning of my career, Kia, for supporting me and supporting tennis.”
Last year, Kia Motors, the Open’s largest sponsor, extended its partnership with the event to 2023 in a five-year deal rumored to be worth over 85 million Australian dollars ($61.7 million), up sharply from its previous sponsorship fee of A$10 million per year.
The Kia logo was a constant sight on electronic advertising boards in Melbourne Park during the tournament.
In addition to Kia, which has been a sponsor since 2002, the figure 1573 was ubiquitous. The numerals flashed on the same boards, behind two Chinese characters. Translation: National Cellar 1573. Groups of spectators wearing T-shirts with this logo could be spotted in the stands. Melbourne Park’s Court 2 was renamed the “1573 Arena.”
National Cellar 1573 is the name of a liquor product offered by Chinese Baijiu distillery Luzhou Laojiao, an associate sponsor of the tournament. Its contract was described by Tennis Australia as “the largest Chinese sponsorship deal in the history of the tournament,” though no one mentioned the exact value of the sponsorship.
“We’ve made no secret that China and the region are a major priority for the Australian Open,” said Richard Heaselgrave, Tennis Australia’s chief revenue officer. “And that we take our role as the Grand Slam of Asia-Pacific seriously.”
Other Chinese companies, including mineral water provider Ganten have also become Australian Open partners.
Deals with Chinese TV broadcasters could further drive the Open’s business expansion.
In an unmistakable sign of China’s growing influence over the only Asia-Pacific Grand Slam, Chinese tennis legend Li Na, who in 2014 became the first Asian to win the tournament, handed the trophy to Osaka.
The event’s Asia-focused marketing strategy is working. Tennis tourism from China has grown sharply in recent years. In 2018, the event attracted 50% more Chinese than in the previous year, according to local media. The total hours of TV broadcasting of the event in mainland China will double in the next several years.
Chinese companies see the tournament as a great advertising opportunity that helps their global efforts to promote their products and brands.
Tennis Australia’s revenue for the year through June 2018 hit A$337, a nearly threefold jump from a decade earlier. Players are also benefiting from the Asian cash flow. This year’s prize money was a record A$62 million. The singles champions won A$4.1 million, up 55% from five years ago. The contestants who lost their first matches collected A$75,000.
“I think a lot of the attention and the focus is on the top players,” Djokovic said. “How much are the winners of Grand Slams earning? A very significant sum of money, absolutely, but I think it’s important to try to focus more on the earlier rounds, kind of expand that field.”
The Australian Open used to be regarded as a lower caliber event than other Grand Slam tournaments. But it has grown to be an equal of the French Open and Wimbledon, at least businesswise.
Local media have reported that the tournament’s total prize money could reach A$100 million in the near future. If it does, the event could end up paying out more than the U.S. Open, which in 2018 had a kitty of about A$73 million, up more than 5% from 2017 and 57% from 2013, according to usopen.org.