Jess Pegula on the Business of Tennis

0:00Support comes from Amazon Business. Unlock smart business buying with fast, free delivery on millions of items and practical AI innovations that automate repetitive tasks so you can make smarter decisions faster. Learn more at AmazonBusiness.com. Bloomberg Audio Studios. Podcasts. Radio. News. My mom would kind of say if it's like, if it's meant to be, it's up to me. And I think that she was always very independent and she broke all of these barriers in sport. But like, it was never a thing because it didn't even like cross her mind that it was like a roadblock. You know, it was just like, you just did it.

0:37And so I feel like that definitely stemmed with me as far as people say like, oh, you're so sure of yourself and like confident. I'm like, well, because I guess I don't even see like the roadblock. I'm just kind of like, we'll just do it.

0:53Welcome back to The Deal. I'm Jason Kelly. And I'm Alex Rodriguez. On today's show, Jess Pegula. Alex, I am so interested to talk to her. She's one of the world's best tennis players right now. She's also a chief architect around the business of tennis. Well, that's what I'm really excited about. And I really want to dig in into all aspects of the business of tennis. And also, how much of the pie are the players getting? That is the question that she is working on right now. Let's also not forget, she's a member of one of the most influential families in all of sports, the Pagoulas. Of course, her parents, Kim and Terry, own the Buffalo Bills and the Buffalo Sabres.

1:27Coming up next, Jess Pagoula.

1:33Jess Pagoula, really such a pleasure to have you here with us. We love tennis. I'm going to confess on both of our behalves. We have a lot of questions and we may ask you some really dumb questions about the business of tennis. I would like to think it's because we're just a proxy for our audience, but maybe it's because I'm not as smart as I want to be about this game, even though I love it so much. We're talking to you a couple days removed from a tournament win in Charleston for you. Congratulations. Thank you. You played great. What I found so fascinating, Alex, was there's a really interesting business story behind the Charleston Open.

2:12Remind us what was going on there with the prize money and everything, because it's a really significant moment it feels like in the history of the sport. Definitely. So last year I was, you know, won the tournament back to back years now. So last year after the finals, they announced that they're going to be equal prize money, which was matching. So it's a WTA 500. So we have like 250s, 500s, 1000s grand slams. So 500 is usually very strong events, not quite as big as a tour 1000 event. But everyone kind of has this perception that like men and women, it's equal prize money. It is at the slams, but it's actually not at a lot of the other events.

2:48So there's a big discrepancy there. And so the tournament owner, Ben Navarro, announced that he was going to match basically the WTA 500 prize money along with that of the ATP 500 level tournaments. It's a big difference. And so it was an amazing announcement. And I kind of joked like, oh, man, you couldn't have done it this year. But I guess it paid off because I was able to win the tournament this year. So it was a big step and I think set a standard very high for all the other tournaments. And sometimes you need just like that one person to do something to kind of raise like that level of commitment.

3:20So hopefully we start seeing some of the other tournaments kind of, you know, make their way to that. So Jess, speaking right on that point, and congrats on the win back to back, that's pretty awesome. You know, when you talk about the big three in America sports, you talk football, NFL, MOB, and NBA basketball. Overall, she's going to say NHL is the fourth because she's an NHL owner, Alex, come on. Yeah, include the manager, the big four, the big four. You know, overall, pretty close to 50-50 revenue of what the owners take home and what the players take home. Is there a position, and I know you've been a big advocate for the players, where do you see this?

3:55Can you ever see this one day getting to 60-40? I think it's tough because, one, we don't really have, like, a players' union. We don't really have anyone that, like, represents the players. And in a way, I think tennis, we're very selfish because we're individuals. We play individually. And I think to that part, it's really hard to get all of us as individual, independent people all on the same page as far as that. And so I don't I don't really know if you'll ever see like a strike or like people agree to not play. There's always been talks of it. But like in tennis, you know, you make your money a lot by winning matches.

4:32You don't have a set. You don't get paid a salary or get paid anything for just the year. You know, so I think that always changes everyone's mind as far as like, I have to keep playing. I'm not going to take it. I'm not going to strike. I'm not going to boycott. I'm not going to do all these things. So I don't know if we'll ever truthfully like looking now, just knowing how tennis players are and how they have to be. I don't really know if it'll ever quite get there. But I've definitely been in talks with a lot of the WTN ATP players as far as joining together to just try to get a higher prize money revenue, especially from the Grand Slams.

5:04I think that's something that can be done. And quite frankly, we've never really had both the men and the women on both sides actually come together, which is super rare in any sport, because when would that really ever happen? But because it benefits both of us, it's something that's been a topic, especially this year, as far as just asking for a little bit more, you know, and I think that's something that you have to, you have to ask, you know, you don't, you don't know unless you ask. So I think that's just kind of something that we're headed towards. hopefully it gets higher, but it's definitely a work in progress.

5:34And I think it's going to take a lot of unity between a lot of the top players from the ATP and the WTA side. Well, and it's also, I mean, I'm interested in geeking out a little bit about the mechanics of this because in addition to the independent contractors, there's also not a league in the same way there is in the NBA, the NFL, the NHL or whatever. You know, the tournaments themselves have different business models, which allows a Ben Navarro to say, I'm going to do this in Charleston. But it's more of a like people have to choose to follow him. It's not a set thing, right? They don't have to.

6:10So let me ask you this. When it comes to equal pay, the perception is it's like equal pay, as you said. And that that is the case. But where are we in that evolution? Because you've worked a lot on that in terms of actual equal pay across the board for men and women in tennis. Yeah. You mean in slams or in just like all the other tournaments? All the other tournaments. Yeah. I think in the WTA 1000s, we've seen a lot of them match equal prize money now. I think Madrid is equal. Miami is equal. Indian Wells is equal. And again, it's just been something that's been continuously starting to happen and grow.

6:44But I think a lot of the lower level tournaments are still not there. And that's still a lot of players that aren't really getting paid the same. And I I think where we just want to see like the ecosystem of the sport kind of continue to grow because that means our sport is going to continue to grow and get better and evolve. And I hope that with Ben doing what he did kind of sets the standard because I do think it creates like a healthy competition. I'm on a WTA player council, so I see like more of the tournament side. And I think setting the standards very high and investing in your event is like a really big deal because that's how you get players to play.

7:18That's how you get them to come back. and then hopefully you're making more money and so on and so on and you can make that equal prize money. It's definitely been a process. And it's an interesting thing. I mean, I think about it from the perspective of the players are the product, you know? So it's like if the best players aren't showing up, the revenue is not going to be as high for the tournament. I mean, it's just not because people aren't going to tune in. They're not going to buy tickets. They're not going to spend their money there. I think like it's gotten so much better because one, I think players are starting to see that.

7:47I do think our sport is a little bit more open as far as like talking to each other about this stuff I think sometimes in tennis you're like in like selfish of course I don't mean in like a bad way, but you're in your own little world, you know Because like you said you're not part of an organization or a team like you are like I run my own team Basically, like who's my team? I control that it's the same with every other player so I do feel like that I've been able to talk to a lot of players about it and they're all for it It's just kind of getting everyone to be all for it at the same time on the same page and then also not kind of burning out with it.

8:21I think keeping that narrative going constantly is something that's hard because, you know, I think sometimes it can get kind of tiring to talk about it all the time. Players still want to focus on like their careers and their results and stuff like that. And so I think you get a little burnt out. And I think that's kind of what they hope happens, right? Like they play the long game. And so they're going to wear you down. Yeah, wear you down. And I think that's where we've been trying to be a little bit more open with keeping that narrative going. And it also goes into like our season is way too long.

8:50And so that's been a whole nother discussion. I mean, we play like, I mean, baseball, you guys play a lot of games, too. We play all year. Essentially 11 months a year. Yeah. And so sometimes tournaments get a little upset, but you can't play every single week. Like with the travel, you're traveling every single week. You're going to different places, different conditions, different countries, depending on how you do. if you're hurt. There's so many factors. So I think that's also like a big part of it that we're trying to change is like, how do we condense the season a little bit because these players can't keep up with it.

9:20And Jess, if you're not careful, you're making one hella compelling case for the players. And Jason, I'm wondering if like you being one of the great players and one of the leaders of the sport, first of all, all your teams benefit because the more money you guys make, the more there is for your team as well. And I think all the teams were aligned around that. But I'm wondering if Billie Jean King, if you approached that and said, how do we go about this? and can you set up a little committee, you know, of both men and women. I mean, she likes a good fight. Yes, she can. Pretty good at it. No, trust me, Billie is very supportive.

9:47We're definitely not lacking any support from Billie. I think she was one of the first people I think we talked to as far as like, there's a lot of issues, but like, she was like one of the first ones and she's great. Her and Alana, like, they text me all the time and they're all for it. So she's set the standard in the bar very high for us. So I think she's definitely someone where we're like, you know, do you have her back? Do you support this? And she's like, Like, you know, all gung-ho. I mean, she has so much energy still. It's crazy. I mean, she's unbelievable. I don't know if I've ever encountered a force of nature that quite like Billie Jean King.

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10:54You've been very interested and vocal about the business of tennis for a long time. You don't have to be. You know, you could just go out and play. So what is that process like where you make a decision to really advocate and to be a leader truly like in the lineage of Billy and others who've really advocated not just for themselves, but for other players. It's been interesting. I don't think when I first got asked to just be on like WTA player council, like I only did it because a girl retired and they're like, we need someone to fill the spot. And they kind of convinced me. And I was like, I don't know if this is for me, but I think.

11:31When was this? I've been on council like almost four years now, I think. like right after COVID or right somewhere in that. Yeah, so you were in your late 20s at that point. Yeah, and I had no idea about anything. And so I actually think that really helped because all of a sudden you understand more about how things work and how there's definitely two sides too, because I think that's important. I think I also learned that from my parents too. Like there's the player side and there's also like a business side. And sometimes it isn't as black and white as people think. And so I think when you learn that process, it becomes much more clear and I think the fact that obviously I'm still a player advocating for that I gained a lot of respect I think from a lot of different players I'm just I guess trying to be somewhat of a voice and I think it just naturally kind of happened I don't know if it's my personality a bit maybe my parents obviously what they've done yeah and just being able to think about things pretty clearly I think from both sides because you definitely get you know one side where they're all pushing what they want and then you get the player side where they don't want to hear anything else.

12:32They just want to, they just want what they want. And so, yeah, it was interesting. I just kind of came into it, but I would say being on that player council kind of started that where you just, you learn. Yeah. So Jess, I want to talk about your parents a bit and your family, because as we talked about earlier, truly one of the first families of the NFL and the NHL these days. I had a great opportunity in 2020, actually here in Miami to interview your mom and just amazing insights into the family business. And we've been talking a lot about partnership and relationships with players. There is something special about Buffalo, your hometown, you were born there.

13:13What are the lessons specifically you've taken from them as you've thought about your own business journey? I would say what my mom always says is that it's just managing people. I think it's probably helped me a bit and what I've had to do just as like, sometimes you have to adapt, I think, to people's personalities or just like know that like, okay, this is how they are. They're really good in this role, but like maybe they're not the best to talk about this subject or maybe it doesn't go as well as it should. And you have to like fit people with what they're good at. And I think that's something that I've learned with them.

13:47And I think it was a learning process for them as well. And I think that's something also people maybe don't realize is that like owners of teams, there's only so many in the world there's no experience for that until it happens and you like learn by owning that team like you don't own a team when you're growing up and then like learn about it right you like you have to buy the team like you just get the team and it's like here's like I don't know like figure it out for those listening that was a knowing nod from Alex Rodriguez about like gotta learn on the job yes you do because if you think about it like no one else You don't own it.

14:24It's just, it's a niche thing, you know? You're successful in other things, but it's different. So speaking of that, let's go back to when you first heard your mom and dad were buying the Buffalo Bills. Tell our audience your feelings. Was it more nervous, excitement, like, here we go? Or mom and dad, what are we doing? So, yeah, the Sabres, it was, like, very fun. But then I feel like when the NFL came around, it was, like, so much bigger in a sense. Nothing's bigger than the NFL. Two teams and then the NFL, like owning an NFL. Like, it's just crazy. So I think it definitely kind of blew up our world a little bit.

14:58I didn't feel it as much with the Sabres, but I think when we bought the Bills, it definitely like blew up. And your mom took such a strong role from the beginning, right? Yeah. I mean, my dad, I think, always looked at it more as like he worked so hard all of his life. Like, this is like an amazing thing that I get to do. This is like, I don't want to say a hobby. That's not great to say, but like it was fun. Like, he loves sports. He loves athletes. He loves learning from coaches and trying to like do all these things. My mom was, I think, more of the business side where she loved the business, the fan experience.

15:27Like she loved going to all these different games and seeing what all these different teams did and how did they make the fan experience like truly great for them. She loved that aspect of it. So, which is great. I mean, because they were both able to kind of take what they loved and maybe not overstep each other in that sense of kind of, again, learning how to run a sports organization. Do you see yourself? I mean, your older sister, Laura, I believe, has like taken a bigger role in the teams. Is that something you might eventually do? Like, what do you see down the road when it comes to the family business and sports?

15:59Yeah, it was funny, actually. When I was like 15, I like got really into hockey for whatever reason, like really into hockey. And so I always wanted to be the first female GM. I don't think that's going to happen, but that was like my whole thing. And so I've always wanted to be involved in sports. I love sports. I think it just like it gave me everything. and made me like who I am. It taught me so many lessons and I couldn't imagine like not having sports in my life. So I definitely think in some aspect, whether it's tennis or hockey or football, I definitely would love to be involved. I have no idea like what that entails.

16:31Um, I think my dad would definitely like me to be involved, but he knows tennis is the priority right now. So I think, um, he's very cognizant of that. And like, he's always like, no, you need to focus on like what you need to focus on now. But yeah, it's, it's something I think that I've wanted to do. And I I think being an athlete, I mean, I don't know, maybe you can relate. Like, I don't know. I'm definitely going to miss that, like, competitive side. And I think I can channel some of that through a different way. But I would love to still be involved in sports, yeah. It's a pretty good channel, I think.

17:02I mean, I've seen you courtside. You get pretty into it. It's spot on. It's spot on. And I don't know how you're competitive, but I do think, to Jason's point, that there's no better way to get a fix when you're still competitive. You just don't wake up as sore, which is nice. You can just watch it. Yeah. And it gets easier when you're not, you know, playing. Yeah. But I think you'll do great and it's pretty awesome to have that, you know. Yeah. And it also brings your families together. Like, I have two daughters. You have a sister. Mm-hmm. And my daughters thought I was crazy when we bought these teams.

17:31Mm-hmm. My partner, Mark, has two daughters as well and his daughters probably thought the same thing. Mm-hmm. But now they're all enjoying it and it brings the family much closer together. I think that is something, too, that we had, when we bought the Sabres, specifically, like, we definitely came together a lot more as a family because like it kind of, I don't want to say forces you, but in a way like you're excited together. You're like sharing it together. And I think, you know, that's what my parents wanted as well. They wanted us to like do this together and celebrate that. So I think, again, it's something not everyone gets to do.

18:00It's special. So I think we definitely appreciate that aspect of it. Yeah, I mean, it's interesting because there's a shared mission about it that must be really fun for your family, I would guess. And stressful. I was going to say definitely stressful, but it's a lot of fun. Even when it gets stressful, I think you always try to come back to that point that this is fun and you're doing something special together. Right. And you have to appreciate that. Well, and I think, I mean, Buffalo is a very special place that loves its teams so much. So much. And so there is like. And great, great fans.

18:33Unbelievable. I mean, you know, Bills Mafia is a real thing. Bills fan. They're everywhere. They're everywhere. I cannot get away from them. And I play tournaments all over the world. And there are still like people in other countries that are like, go Bills, go Sabres. It's crazy. Well, to be fair, you help feed it a little bit, too, because, you know, was it at the Australian you wrote that was a catch? Yeah, yeah. I have to throw little things out there sometimes. Yeah, I'm always in Australia during the playoffs. So I've had some interesting Australia memories as far as the last couple of playoff years.

19:04But, yeah, I try to build that bridge, especially because there's not a lot of tennis in Buffalo, virtually none. And I'm like me and Jimmy Arias are like the only people from Buffalo that like play tennis and to our level. So to be able to like bridge the gap there and create new fans is it's really cool. Well, here's an idea. We're on the deal. You're building a new stadium in Buffalo. Maybe you can host a tennis tournament inside your new building. See that. That would be actually really that would be interesting. I don't know. It would do great. Not in the winter. Yeah, definitely not if it's remotely cold out.

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20:19All right, let's do our rapid fire. So this is just first thing that pops into your head. We'll just bounce back and forth. If you had to pick one surface for the rest of your life, hardcourt clay grass. Hardcourt. Favorite tennis player of all time? That's so tough. I think probably Roger Federer. Most memorable match of your tennis career? I would say when I qualified at the U.S. Open for the first time. Qualifying at a slam is really hard. You have to win three matches to get into the main draw. But you're there at the tournament playing. There's crowds. There's people. All this stuff. Good money.

20:50And I just remember I won in three sets. And I wasn't feeling great that day. Whether it was nerves or the heat, I don't know. But I just remember I got through that. And it was like a very big mental kind of break for me. Because that's the show. The U.S. Open is the show. Yeah. And I was younger and I came back and I won this match for the it was the last round of qualifying. So to get to the main draw and I just I think I had lost a couple third round like last round of qualifying before. So it was kind of like monkey off my back, kind of a big mental breakthrough for me. It was it was a lot of things.

21:20What's the most important storyline going into Roland Garros either for you or for tennis? For tennis. I just know that Iga Shvantec has been working. She hired a new coach. he used to work with Nadal and then like there's all these videos now of her and Nadal like on the court and all of us are like clay is her best surface she's won the French Roland Garros a lot of times so I would say that's like a big storyline right now because we're all like oh no like we're all in trouble the king of clay advising the queen of clay yeah exactly we're like kind of panicking so yeah I think that'll be really really interesting but hopefully I played good tennis last year so I'm I feel like I could be a little underdog on the clay this year.