Roger's Way: The Swiss Frame of Mind
His Midas touch prevails off court as well as on. Not only has he won 100 million US dollars in tennis prizes over the past two decades, Roger Federer has also struck gold in sponsoring, management and more – not always in a conventional way.
As a sportsman, his feats are blindingly obvious: "best tennis player ever" says it all. Less obvious are the business accomplishments. There are top-drawer sponsorships, some of which he has personally engineered. There is a direct step-out into sports marketing, presidency of the tennis-players' council and helping to create a new tournament to honor a legend. Oh, and he even set up a charity worth several million Swiss francs. Speaking to Credit Suisse, Federer and his manager, Tony Godsick, share some secrets of success.
Tennis Is My "Core" Business, but It's not About the Money
Indeed, as a teenage prodigy, Federer's first awareness of the vast amounts of money in professional tennis was not the income, but rather the expense involved. "You have to pay for your flights, your hotels, your meals, your trainers, your equipment," he recalls. "It quickly adds up to a lot." Especially when you have modest means, like his parents did at that time. So his first winnings were reinvested into the family pot, as working capital. "After a while, I earned enough to pay for business class flights, because they leave you more rested to play well when you arrive: they're an investment. At some point, I started to live the dream – I could play, pay the expenses, and make a living on top." Today, in his 20th year as a pro, tennis is still about living the dream. "On the court I'm still motivated by that fuzzy yellow ball," Federer says, "not by lawyers and business people."
Finding My Own Way in Management
Off court, Federer has ventured far deeper into business than most of his contemporaries. For about 18 months in 2004-2005, he – together with his parents, then girlfriend (now wife) and a local lawyer – handled all of his affairs. Self-management is almost unheard-of among tennis pros, yet for him it produced six grand slam championships plus a host of off-court deals. "I gained a lot of experience, I learned so much," he reflects. "It explains why I'm so hands-on in my business ventures today, because I had no choice but to be hands-on back then." Nonetheless, Federer finally turned to the more conventional approach of employing an external manager, mainly to relieve his family. "My wife was handling the press. My parents and lawyer were handling the contracts. They had to play hard with business partners, and it all became too close for comfort." So in mid-2005 he signed on with sporting agency IMG and agent Tony Godsick. The move certainly paid off: In each of the subsequent nine years from 2007 to 2015, Federer earned more money off-court than any other professional player.
On the court I'm still motivated by that fuzzy yellow ball, not by lawyers and business people.
Passing on Management Experience to Others
His success there is unprecedented. "Twenty years ago, one of the top players had a ten-year sponsorship from one brand," Godsick recalls, "and that was considered phenomenal." By contrast, Federer today has seven such deals that extend over ten years and more in length. The Godsick-Federer duo worked so well that they decided to expand into other areas. One was management of other top athletes: In 2013 they founded their own agency, TEAM8. The name "Teammate" is the game, says Godsick. "If you're an athlete who tells his agent "Leave me alone, just make me money," then we're not for you. If you want to partner with an agent, work side-by-side, then we could be just the right fit." TEAM8 is a boutique agency that represents a small stable of top performers in sport, both Godsick and Federer say. Another step-out for the pair is the creation of a new tournament, the Laver Cup. This team event, modeled on golf's Ryder Cup, will debut in September 2017. Many of the world's top players have already agreed to participate, while two tennis legends, Bjorn Borg and John McEnroe, have signed on to captain the tournament's opposing teams.
Negotiating a Win-Win
Of course on the tennis court, only one side can triumph. But in business, Federer has learned, it is best to share victories. A major lesson here was won during his 2008-2014 presidency of the men's professional-tennis-player association, the ATP Player Council. In a 50/50 venture with tournament organizers, the players own the ATP Tour that puts on some 60 tournaments a year all over the world. When Federer took over as Player President, he already knew that profits had become lopsided, that the organizers were reaping more than the players. Still, he realized that "It's important in a negotiation to understand the other side. What I didn't want is for the organizers to hate the players and the players to hate the organizers. They should be thankful for us putting on a show, and we should be thankful to them for looking after us. We need to have a partnership, not a war zone." After lengthy back-and-forth negotiations, Federer and other top players persuaded the organizers to share revenues more generously, particularly with the lower-ranked colleagues who struggle to cover their expenses. (Just breaking even on the ATP Tour requires annual winnings of approximately 150,000 US dollars.) "I wanted to care about every level of players. From the guy who makes no money to the guy who makes some money to the guy who makes lots of money. The negotiations were tough, but in the end, both players and organizers were happy."
Giving Back, Practically
Already at the relative young age of 22, Federer entered the world of philanthropy. "My parents reminded me that I should give back to society, that I had a special opportunity to raise money and awareness about issues other than tennis," he recalls. Ok, but which issues? The choice was made in what Godsick says is Federer's typical, methodical way of decision-making. Says Godsick: "Roger realized he could make a difference, but he didn't egotistically think he could single-handedly save the world – he knew he had to focus." So he first narrowed down to children. "When I was first on the professional tour, before I reached the number one ranking," Federer recalls, "the tournament organizers often assigned me to do kids' tennis clinics. I found that I loved working with children." Then, in honor of his mother's homeland, South Africa, he chose the sub-Saharan region as his geographic target. Finally, "because education is something you can't take away from someone, and there is a huge need for it in southern Africa," he picked that as his topical focus. Since then the Roger Federer Foundation has risen from strength to strength: In 2015 it spent five million Swiss francs helping to educate a quarter of a million disadvantaged children.
Does Success Always Look the Same? Yes and No.
Sport, sponsoring, event organizing, philanthropy… it's a steady change of role from day-to-day and during the day. "I can glide from one to the next quite easily," Federer says. "But still, they are different worlds. Talking about philanthropy is completely different than talking about my tennis game. With tennis, I'm living and breathing it every day. In philanthropy, there are so many people out there who know so much more. I might be the president of my foundation, but I don't know everything. I'm still a student. In business, I have a great friendship and relationship with Tony. In tennis, I have a great relationship with the coaches, the fitness trainers and my team." What's common in all areas, Godsick says, is Federer's Swiss approach to life. "People talk about Roger's 'Swissness.' To me that's precision, quality, modesty and doing things with a purpose. That's how he behaves, and that's who he is. Everything he does is first class."