What is the 50-50 profit-sharing formula?
The formula was introduced as one of the central pillars of the OneVision strategic plan. In simple terms, the formula means that any net profits (before income tax) above Base Prize Money across the ATP Masters 1000 category are split 50-50 with players. This means that players are sharing in the financial upside of tournaments for the first time in the history of the ATP Tour.
How does it work?
It’s a three-step process:
1. Tournaments take place, with guaranteed Base Prize Money paid out to players as usual.
2. Following each tournament, its financials (incl. all revenues, costs) are fully audited. This is done for each of the nine ATP Masters 1000 tournaments.
3. Profits are aggregated across the whole category (nine ATP Masters 1000 tournaments). If the profits exceed the value of the total Base Prize Money paid out across the category that year, the excess is shared 50-50 with the players via a Bonus Pool payment.
How much profit sharing has been calculated for the 2022 season?
The formula will deliver an additional $12.2m to players for the 2022 season. For context, this represents an additional 22.8% on top of Base Prize Money at the eight Masters 1000 events that took place in 2022 ($53,592,365). Shanghai did not take place in 2022 due to Covid-19 restrictions.
Why has it taken so long to confirm Profit Sharing for the 2022 season?
Tournament financial auditing is thorough and complex. This process takes time – particularly in its first year. There are in fact three different audits that take place:
1. Tournament Independent Auditor (various), which must pre-approved by ATP
2. Prize Money Committee Auditor (PWC)
3. Player Auditor (KPMG)
In addition, tournaments must wait for the end of their respective fiscal years for the auditing process to begin. However, we anticipate that calculations will be completed more quickly in the future as stakeholders become accustomed to the process.
How is the Player Auditor selected?
The Player Auditor is selected by player representatives on the ATP Board. It is important to stress that the Player Auditor (KPMG) has vast experience handling all auditing and accounting matters. The Player Auditor represents the player interests and ensures accuracy and fairness from a player standpoint across these items.
Why is tournament auditing such a big deal for players?
In any successful partnership, financial transparency is fundamental. The ATP, a partnership…