1. WHAT IS WTT
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1.3. What is WTT’s relationship arrangement with the ITTF?
ITTF and WTT have signed a very precise 15-year period master license agreement(MLA) which passes ITTF’s commercial rights and event hosting rights (except WTTC’s) to WTT.
The MLA details how the organisations need to work together and the control mechanisms in place. Key terms include:
•WTT’s business plan must be approved annually by the ITTF Executive Committee
•WTT’s accounts much be audited and provided to the ITTF
•Clear termination clauses if WTT is not working in the best interests of table tennis
•A joint steering committee to manage technical issues
ITTF is a shareholder of WTT and has clear rights and control over the company to ensure transparency to the ITTF.
1.4. What level of financial commitment does ITTF have to WTT and vice versa?
WTT is committed to pay a $2 million license fee annually to the ITTF, which increases over time, and as a shareholder has access to dividends on profits. ITTF has no financial commitments to WTT.
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3. GOVERNANCE
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3.2. How does WTT help in mitigating ITTF’s risks?
Overall, the risk for ITTF related to competitions’ organisation is primarily mitigated with the introduction of WTT, as ITTF has a guaranteed revenue generated through the Master License Agreement.
The ITTF has been undertaking Risk Assessment Workshops every two years for the past six years, and as the financial growth occurred in more recent years, the risk grew within ITTF. "Lack of diversification", "reliance on few major sponsors" or "lack of global geographic representation", were all risks commonly being brought up. All of these were risks directly associated with the ITTF.
The creation of WTT has started to remove many of these risks from the ITTF and has now placed them in WTT. Currently COVID-19 is a major risk, and something that couldn't have been foreseen, and even now couldn't have been mitigated. The biggest advantage for the ITTF, based on the new business model with WTT, is that ITTF does not bear the risk like WTT has through a pandemic like COVID-19.
Although COVID-19 is the current risk, of course there are other risks, such as the sport being primarily dominated by one country, and one region within the world, or the possibility of being affected by bad reputation, as we have seen in other sports recently. Separating the business from the governance, helps to mitigate the risk of corruption at the management, due to the mechanisms of control, independence and separation of powers.
In terms of diversification, WTT will look to invest in ways to develop players from around the world so the reliance on a few countries starts to reduce. This reliance mitigation is one of the important aspects to work on the overall WTT strategy.
3.3. What is the financial step change WTT can bring compared to continuing as we have done in the past?
When the ITTF first undertook the project of designing and building a Special Purpose Vehicle (SPV), to house the commercial rights of the ITTF, which is now known as World Table Tennis, the primary objective was to be able to maximise the value of these rights and generate increased revenues.
An initial analysis was undertaken based on the current financial structure and model of the ITTF's commercial rights. It was evident that a majority of the income generated for the commercial rights were then being reinvested back into the competitions in which the rights were generated, with any additional funds generally covering the operational costs of the ITTF, and then if any further funds still available, they would generally go towards Development. When looking at the figures in this sense, it was roughly a USD15m income, and USD15m expenses being incurred with the commercial rights housed inside the ITTF. Had the commercials rights stayed within the current structure, the most positive business models were producing a 5-10% increase from 2020 to 2021 in a normal pre COVID-19 situation and now possibly even less of an increase or a reduction if business was conducted the same as the past.
However, for a significant increase to occur,there were a few specific areas of change that needed to take place, primarily around the re-shaping of competitions, and turning them more into a mix of events and entertainment, or ‘sportainment’, which is now evident through the event structure shared by WTT.
The restructure of the events has provided a greater opportunity to increase the commercial value of the various events within the new structure, and initial forecasts (prior to COVID-19), saw revenue levels doubling from 2020 to 2021 (100% increase), and by 2030 saw revenue levels reaching over 450% growth compared to the current level of revenues. Of course, these figures now need adjustment due to COVID-19.
3.4. Who are the directors/trustees and how is the legal entity formed?
WTT was created in Singapore upon approval of the ITTF Executive Committee. The current interim directors are Stephen Dainton, Matthew Pound and Koh Yu Han -these are currently held on behalf of the ITTF. The ITTF will soon allocate a position to the ITTF Executive Committee as per the Master License Agreement. Investors secured will also require positions on the board. However, it is always as mandated through the Master License Agreement and any shareholding agreements that there is negative control in favour of the ITTF.
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4. EVENT
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4.2. What investments is WTT making to create the world-class events envisioned?
Event hosts will be supported by the WTT team and its partners in line with industry best practices to elevate the marketing and commercial potential of the events to the next level.
WTT has brought on board professional staff and consultants such as Philippe Le Floc’h whose stellar experience includes stints as Chief Commercial Officer at FIFA, football’s international governing body, and as Marketing Director at UEFA, the sport’s European governing body and Stephen Duckitt,who has 15 years of corporate global sports industry experience, including management and marketing of top international tennis events on the ATP World Tour and WTA International Series.
Additionally, WTT is working with consultancies in different areas such as Pumpjack Dataworks (data and digital strategy), Turnstile (IP valuation),160over90 (marketing and brand building) and Superunion (graphic design).
WTT will soon announce a partnership with a global sports marketing agency which will include taking a new centralised approach to broadcast production.WTT will invest in and manage all global broadcast production to convey the emotion and narrative of the players and events consistently, building authentic connections between fans and players.
One of the key missions of WTT is to improve the level of prize money for our players. WTT To achieve this, WTT is taking the burden of prize money away from the organisers and is investing heavily to increase the amounts.
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5. PLAYING SYSTEM
5.1. How will the WTT World Ranking points system be like? Will it affect the players with the Olympics postponed to 2021?
A rankings proposal is being developed and will be presented in due course.
5.2. How will Mixed doubles qualify for the Olympic Games considering World Tour is over?
The ITTF has taken a thorough process in looking at the disrupted qualification system and this was a work done in close cooperation with the Athletes Commission, including a survey addressed to athletes. All details including, but not limited to, the disruption of the qualification system, the postponement of events, the subsequent complications and the fact a new event structure comes in place in 2021 have been considered, with the objective to reach the best possible solution.
Despite the Mixed Doubles qualification system didn’t have originally ranking quotas,(only a provision for reallocation of unused quotas), the ITTF and WTT will accommodate sufficient participation opportunities for mixed doubles pairs, as deemed necessary, on 2021 WTT events leading up to the conclusion of the qualification process. The ITTF has currently finalised the necessary amendments to the Olympic Games qualification system, which was approved unanimously by the ITTF Executive Committee, and it will be submitted to the IOC for final approval. We expect the adjustments being published by the ITTF within this month.
5.3. How will WTT address the problem that only 2 of the TOP 20 players can participate at Star Contenders and Contenders events?
WTT has introduced a Play Down Restriction to ensure that the Top 20 players are not continually dropping down to prevent lower ranked players from earning prize money and rankings points.
This will provide all players with the opportunity to move up and down the rankings based on performance while earning prize money.
Events will also be permitted to use one of its Host Wildcard allocations to allow a third Top 20 player to participate in their event.
The rule will not stop any Top 20 players from wishing to play doubles or mixed doubles at Star Contender or Contender events should they wish to do so.
6. OTHER FEEDBACK
6.1. The Chinese TTA had always supported ITTF events but in recent years it was felt there was not a big step up on the organisational levels, and the players would eventually stop being interested, as the domestic opportunities were greater. Unsatisfying prize money and often unstable quality of events were some of their concerns. CTTA was indeed modelling its new event system before knowing about WTT. With WTT, CTTA has confidence in the future international events and firmly believes in the plans of the ITTF. The CTTA supports WTT as well as the overall reform of table tennis led by the ITTF in full.
Indeed, the development of alternative initiatives by external powers, such professional table tennis leagues, not regulated within the framework of the ITTF and its members, was an existing risk. We have seen this happening in Swimming, in Athletics, and even in Equestrian. The ITTF is glad of the initial evaluation of the Chinese Table Tennis Association and want to thank their confidence. We also recognise that the table tennis events needed a massive improvement, and the analysis of the situation of the last 10-15 years was the seed that led to the creation of WTT. The players are the stars of our sport and WTT needs to ensure that we provide the best stage for them to shine and take our sport to the next level, but this requires investment that was not possible to achieve in the fast pace WTT can.
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6.3. One of the Member Associations representatives spoke about the Champions League being very useful towards the development of the sport. There was a question about the schedule for the events, the overall calendar planning, and how to ensure the young players, future stars, can watch the top players like Samsonov, Ovtcharov, Mizutani, Freitas, etc, at these events, and how to balance this with their need to compete at WTT events to earn prize money.
A desire was expressed to have European competitions providing ranking points, in order to ensure governments will subsidise attending to these events, and how to establish partnerships with WTT and work together for the common goals.
Indeed, the ITTF hopes that WTT becomes a common project for everyone in table tennis with the goal to expand and bringing more revenue to our sport.
It has been noticed that the club system, particularly in Europe, has played an important role towards the development of players as well as a source of income. This issue is being discussed, although no decision has yet been taken. There is a degree of complexity in ensuring unanimity across the decision makers, as securing a fair global approach as a world organisation we are, is needed. But the ITTF and WTT are open to consider possibilities as we always aim to ensure the best outcome for the sport is achieved.