The state of American tennis: how to get out of the doldrums?

By Xavier Forneris.

Followers of the blog may be surprised to see a post about sports in general and tennis in particular. Well, tennis is one of my passions, it is a business as well as a sport and form of entertainment, and don’t forget that my blog has “eclectic” in its name. I need to live up to this reputation.

Now, if you are a US-based tennis fan I suspect that the last thing you want to read is yet another article or blog post on how and why US tennis is in the doldrums. I apologize in advance but…have you looked at the ATP/WTA rankings lately [i]? Not our finest hour.

 On the men’s side here’s what the top 20 rankings look like on 10 Oct. 2012:

 ATP Single Rankings (1-20)

1. Federer, Roger (SUI)
2.  Djokovic, Novak (SRB)
3.  Murray, Andy (GBR)
4.  Nadal, Rafael (ESP)
5.  Ferrer, David (ESP)
6.  Tsonga, Jo-Wilfried (FRA)
7.  Berdych, Tomas (CZE)
8.  Del Potro, Juan Martin (ARG)
9.  Tipsarevic, Janko (SRB)
10.  Monaco, Juan (ARG)
11.  Almagro, Nicolas (ESP)
12.  Isner, John (USA)
13.  Gasquet, Richard (FRA)
14.  Raonic, Milos (CAN)
15.  Nishikori, Kei (JPN)
16.  Cilic, Marin (CRO)
17.  Wawrinka, Stanislas (SUI)
18.  Simon, Gilles (FRA)
19.  Kohlschreiber, Philipp (GER)
20.  Dolgopolov, Alexandr (UKR)

What do we see in terms of countries and regions represented (knowing full well that tennis players do not represent their country but themselves –except in the Davis Cup, the Fed Cup and the Olympics- and that many of them move and often live and train outside their country of birth)? The following observations can be made:

-A first, sad observation [sad for those, like me, who love the US and consider it home] is that there is no American in the top 10. The first American is #12 John Isner. He actually is the only American male in the top 20 players at the moment.

-The top 5 players are from Europe (I’m referring to the continent not the European Union; I’m thus including countries such as Switzerland, Serbia or Ukraine). In fact 15 out of the top 20 players are from the “old continent”.

-Of the European nations, Spain and France are the countries with most players in the top 20, with 3 each: Nadal (#4), Ferrer (#5), Almagro (#11) for Spain; Tsonga (#6), Gasquet (#13),and Simon (#18) for France. Switzerland and Serbia have 2 players each: Federer (#1) and Wawrinka (#17) for Switzerland; Djokovic (#2) and Tipsarevic (#9) for Serbia.

-It’s worth noting that 5 of the top 20 players stem from Central/Eastern Europe: in addition to the 2 above-mentioned Serbs, there’s a Czech (Berdych #7), a Croat (Cilic # 16) and a Ukrainian national (Dolgopolov #20). Some might be tempted to add Raonic to this list (born in Montenegro and residing in Monaco) but owing to his Canadian citizenship he will join John Isner in the North American contingent.

-There’s only one player representing the entire Asia-Pacific region: Nishikori from Japan (#15).

 -Finally, one South American nation deserves to be mentioned: Argentina, which counts 2 players in the top 20 (in fact both are in the top 10): Del Potro (#8) and Monaco (#10), continuing the legacy of Guillermo Vilas and José Luis Clerc.

One may object that maybe the Americans are just behind the 20th ranked player, and on the verge of entering the ‘first tier’ of the rankings. Unfortunately, if we look at the list of players from #21 to #40, we see that there are only 2 to 3 Americans there: Querrey (#22) is the best ranked in that second tier, followed by Roddick (who retired from professional tennis after the US open but it still in the list at #27), and Mardy Fish (#28).

Other than them it’s mosly -again- a European-dominated field: 2 German players (Haas and Mayer), 4 Spaniards (Verdasco, Granollers, Lopez, and Andujar) -which in my view confirms Spain’s position as the lead nation in the world of tennis today-, one Italian (Seppi), one Russian (Youzhny), two Frenchmen (Chardy and Benneteau), one Serb (Troicki)…I could go on and on..The final count is that 15 of the players between ranks 21 and 40 are from Europe; 2 from the US, and 1 from Latin America (Belluci, the only Brazilian in the top 40).

ATP Single Rankings (21-40)

21.  Haas, Tommy (GER)
22.  Querrey, Sam (USA)
23.  Verdasco, Fernando (ESP)
24.  Granollers, Marcel (ESP)
25.  Mayer, Florian (GER)
26.  Seppi, Andreas (ITA)
27.  Roddick, Andy (USA)
28.  Fish, Mardy (USA)
29.  Lopez, Feliciano (ESP)
30.  Youzhny, Mikhail (RUS)
31.  Chardy, Jeremy (FRA)
32.  Troicki, Viktor (SRB)
33.  Benneteau, Julien (FRA)
34.  Klizan, Martin (SVK)
35.  Melzer, Jurgen (AUT)
36.  Baghdatis, Marcos (CYP)
37.  Nieminen, Jarkko (FIN)
38.  Anderson, Kevin (RSA)
39.  Bellucci, Thomaz (BRA)
40.  Andujar, Pablo (ESP)

And if you have the patience of looking at the next 20 (from 41 to 60), you’ll see more Europeans and South Americans and only 1 US player (Harrison). To be fair we should mention the domination of the men’s doubles circuit by the Bryan brothers, ranked #1 and #2 in the world (though the only Americans in the top 20).

But perhaps, one hopes, the situation is different on the women’s side. I don’t want to depress you but here’s how the top 20 looks like on 8 October 2012:

WTA Singles Rankings (1-20)

1. AZARENKA (BLR)
2. SHARAPOVA (RUS)
3. WILLIAMS (USA)
4. RADWANSKA (POL)
5. KVITOVA (CZE)
6. KERBER (GER)
7. LI    (CHN)
8. ERRANI  (ITA)
9. STOSUR  (AUS)
10. BARTOLI (FRA)
11. WOZNIACKI (DEN)
12. IVANOVIC (SRB)
13. CIBULKOVA (SVK)
14. PETROVA (RUS)
15. VINCI  (ITA)
16. KIRILENKO (RUS)
17. KANEPI  (EST)
18. SAFAROVA (CZE)
19. GOERGES (GER)
20. LEPCHENKO (USA)

Not a great success either: only 2 US players in the top 20: Serena Williams (#3) and Lepchenko (#20 and who was born in Uzbekistan). Otherwise, we see, again, a large majority of Europeans, both from the former Eastern bloc (Belarus, Russia, Poland, Czech republic, Serbia, Slovakia, Estonia) and from ‘Western’ Europe (Denmark, France, Germany, Italy); as well as 2 from the Asia-Pacific region (Li Na from China and Sam Stosur from Australia).

So what does this say about US tennis? Why a country like ours, with 315 million inhabitants,  does not ‘produce’ more champions, more players in the top 20 than Croatia (4.5m inhabitants) or Switzerland (8m)? Why can’t we go back to the ‘golden age’ of Agassi, Sampras, McEnroe and Connors, when the US was the dominating force in tennis?

There must be something that the Europeans or the Argentines are doing better to identify and support their young players and bring them to this level. Can’t we take some cues from the tennis federations or tennis schools in Spain, Serbia, Switzerland, France or Argentina?

I would really be interested in hearing your views on what may explain this disappointing performance, what these other nations do better, what we could learn from them. Some of the contributing factors that I have heard or read about include the following:

–               The ‘hunger’ factor: players from poorer countries from the former Eastern bloc would be more hungry, more motivated, than those in richer countries.

–               The ‘clay’ factor: some explain that European players grow up playing -mostly but not only- on clay and argue that clay experience gives them an hedge in 2 or 3 ways: 1) a greater ability to patiently ‘construct’ a point than hard court players, 2) better footwork, dexterity or balance, 3) greater endurance (think longer games and frequent 5-set matches). In a 2010 interview in ‘The Independent’ [ii], Jose Higueras, himself a former top player from Spain who has been helping the USTA, confirmed that the Spanish players’ ability to move in all directions is one of their great strengths but he also mentioned another factor, which is that the Spanish “school” of tennis places less emphasis on developing junior champions. They only use junior tournaments as a way to develop.

–               The ‘infrastructure’ factor: others credit the tennis infrastructure in these more successful countries. For instance, RPT (an outfit founded by Luis Mediero that certifies coaches in the Spanish techniques) explains that Spain has ‘more than 1,000 tennis schools distributed all over the country, 100 competition tennis teams, 53 ATP and 33 WTA tournaments and hundreds of national tournaments in different categories’[iii]. Youzhny, the Russian player said of Spanish tennis: ‘They have a lot of courts and good facilities to practise…It’s not really expensive to practise in Spain for Spanish people.’

–               The ‘training technique’ factor: for yet other people, the differences in training techniques between Europe and the US, on what academies and coach teach and emphasize would play an important role in their respective performance.

–               And of course, the ‘success breeds success’ factor: it’s clear that the lack of (male) American players in the top 3, top 5 or top 10 generates less interest in the sport in the US (granted, it has never been one of the major sports – baseball, football, basketball), which in turn brings less sponsorship and TV coverage, which attracts fewer young people to the sport, and fewer young practitioners generate less champions…

Are we trapped in a sort of vicious circle? I hope not and that the up-and-coming players- Ryan Harrison, Jack Sock, Christina McHale, Sloane Stevens, Coco Vandeweghe among others- will prove in the coming months/years that US tennis is back. The excellent performance of the US tennis team in the Davis Cup 2012 (only eliminated in the semis by Spain) is also very encouraging.

So what do you see as the possible solutions for US tennis? Do you think any of the following are viable options?

–       Make clay more prominent (and hard court less uber-dominant)?

–       Have a well-funded tennis program in primary and high schools to ‘cast a wider net’ (as recommended in a recent New York Times article [iv]?

–       Make tennis more affordable and accessible to everyone, less exclusive as a sport?

–       Open the doors even more widely to foreign coaches and players? This would entail granting them visas to work and study in this country as well as fellowships to colleges/universities, so they would bring with them their techniques/skills and help rise the level of tennis. Many of the young foreign players who will come here to study and play will likely want to stay in the country and become citizens, which could also help increase the number of US champions over time.

Is there anything else we are not doing or not doing enough? I hope this post sparks a constructive debate and not a negative one. Our objective, as US-based tennis fans should not be to point fingers at the USTA, or at this or that person, but to find solutions to make tennis a bigger, more visible sport in this country, where more champions keep the interest growing and not declining as seems to be the case now. I’ll see you on the court.


Sources used and credited:

[i] You can retrieve the men’s rankings covered in this post on the ATP World Tour website at: http://www.atpworldtour.com/Rankings/Singles.aspx. You can retrieve the women’s rankings covered in this post on the WTA website at http://www.wtatennis.com/page/RankingsSingles/0,,12781~0~1~100,00.html

[ii] Read the article about the domination of Spanish tennis and the interviews of Higueras and Youzhny in “The Independent” at: http://www.independent.co.uk/sport/tennis/how-the-us-open-turned-into-the-spanish-masters-2074063.html

[iv] Read the New York Times article about the state of US tennis and the role that public schools could play: http://www.nytimes.com/2012/09/10/sports/tennis/to-excel-in-tennis-united-states-should-look-to-high-schools.html?pagewanted=all&_r=0

Insider Trading: A Legal, Ethical, or Economic Issue?

Insider trading, to simplify, is the illegal use of undisclosed material information by insiders for profit (s0me insider transactions are perfectly legal). Over the past year, several high profile cases of insider trading have come to light in the U.S., to the point that I felt I was tele-transported back to the 1980s and the era of Michael Milken, Dennis Levine, Martin Siegel and Ivan Boesky (the “Rat Pack”). Since last summer, for instance, I have been following with fascination the case of Raj Rajaratnam of the Galleon hedge fund.

When a story of insider trading like this emerges, the media largely focus on the legal and moral issues entailed. It’s illegal, it’s unethical. This focus is understandable but insider trading is at least as much, and perhaps even more, an economic issue as a legal and moral one.

How can this be an economic issue? I apologize in advance for this is going to seem a little dry and theoretical. I promise not to have too many posts in that style. Insider trading has to do with the branch of economics called microeconomics. Let me explain. The market is supposed to be a place where firms and consumers meet to trade goods and services with no governmental intervention or interference. This is an ideal. In practice, however, markets do not always lead to socially efficient outcomes and governments have to intervene to correct certain “market failures”, a term that will inflict great pain to true-blood free-marketers for whom “Markets can not fail. There are only Government failures”. But markets do fail. Often. And to correct these market failures, Governments usually intervene through an instrument called “policy” and these policies will often impact managerial and/or consumer decisions, the type of decisions that is the domain of microeconomics.

As well explained by Michael Baye in his excellent book on Managerial Economics there are 4 reasons why free markets fail to provide the socially efficient quantities of goods:

  • Market Power
  • Externalities
  • Public Goods
  • Incomplete Information

Insider trading corresponds to the fourth type of market failure: incomplete information. A key ingredient of market efficiency is the need for participants in the market place to have reliable information about price, quantity, quality, risks, etc. No one should expect to have perfect information, but information should be “reasonably reliable”. When participants have incomplete information about factors critical to any decision making, things can go wrong. Baye provides several examples where the Government has to step in to provide information to consumers (e.g., about the ingredients in some foods, the dangers of tobacco smoking or of certain drugs). Governments have to do this because suppliers “left to their own devices”  may not spontaneously provide information to consumers, particularly when such information could curtail demand for their products, and therefore hurt sales.

Insider trading is not so much a question of incomplete information as it is one of asymmetric information. For Baye, asymmetric information is “one of the more severe causes of market failure” (p. 527) and there is asymmetric information when some market participants have better information than others. Legislation against insider trading in the stock market is one of the best and classic illustrations of government intervention aimed at alleviating the market failure caused by asymmetric information. For economists the problem with insider trading is not primarily a legal or moral one. When one person (the insider) has “privileged” information about a company’s stock, its performance, its products or services, or a forthcoming innovation that will increase the enterprise value or stock value, it can “destroy the market by inducing others to stay out of it” (p. 527). The very existence of the market is at risk.

Why? The reasoning is that “outsiders” will refuse to participate in a market that is dominated by “insiders” who will only sell when they know that prices are about to fall and will only buy when they know prices are about to rise. This concern is clearly an economic one, not a legal or ethical one. Economics is concerned with the efficient functioning of markets and this is why it is concerned with insider trading. If insider trading has the potential to make the financial market less efficient or even to destroy it, economists must have reached the conclusion that this risk is sufficient ground to justify an exception to the free market principle, a deviation from this ideal but elusive objective, and to allow – indeed urge- that Governments intervene, through the adoption of a special legislation and its severe enforcement (as legislation that is not enforced is useless).

This brings us back to the Law. The risks posed to financial markets by the practice of insider trading explain why many countries, especially those with large financial markets, have enacted increasingly comprehensive and severe legislation to prohibit insider trading and why they usually enforce that legislation quite strictly.

In the U.S., the rules against insider trading are quite old: they were first introduced by the Securities and Exchange Act of 1933, a federal piece of legislation enacted as a result of the famous crash of 1929, amended in 1934, then again in 1990 and, more recently, by the Sarbanes-Oxley Act of 2007. This is the legislative “arsenal” that Mr Rajaratnam has been facing in Manhattan courts, like so many before him. Similar rules exist in most OECD countries and emerging economies with more recently established stock markets are also following the same path. For example, Brazil enacted its Law on insider trading in 2001, but the first convictions only occured in February 2011, a full 10 years later: http://www.concurringopinions.com/archives/2011/02/brazils-first-insider-trading-conviction.html.

The big challenge in insider trading cases, in any country, is enforcement, gathering evidence and securing convictions.

Reference:

Michael R. Baye (2010). Managerial Economics and Business Strategy. 7th edition. Boston: Mc Graw Hill Irwin. Chapter 14 (A Manager’s Guide to Government in the Marketplace), p. 507-537