On November 8, 2024, the Wharton Sports Analytics and Business Initiative (WSABI) assisted as the Wharton Undergraduate Sports Business Club hosted its annual Sports Business Summit at Huntsman Hall on campus at the University of Pennsylvania. During the Summit, attendees heard from a wide range of speakers in the sports industry, highlighting expertise in the evolving world of sports business, investing, strategy, and leadership.

The $500 Million Bake Sale

To kick the Summit off, Lewis Sherr, CEO of the not-for-profit U.S. Tennis Association (USTA), took the stage to discuss how USTA approaches tennis to build the sport not only as an entertainment product, but as a force for personal health, community development, and innovation. Speaking with Katrina Adams, Executive Director of HJTEP and former USTA President, Sherr offered an insightful glimpse into the business strategies behind the U.S. Open and the USTA’s broader mission to grow tennis in the United States.

The U.S. Open, Sherr explained, is far more than a showcase of world-class talent – it is the financial lifeline of American tennis. This year’s U.S. Open, for example, generated a record-breaking $500 million, hosting over a million fans in just three weeks. This makes the U.S. Open a larger business than most professional sports teams. Yet, unlike its for-profit counterparts, the U.S. Open channels every dollar of profit back into tennis. Sherr described it as “the bake sale that funds the organization,” with proceeds fueling programs to build courts, support underserved communities, and foster grassroots tennis initiatives across the country.

Sherr also celebrated a striking milestone: more than 25 million Americans now play tennis, reflecting a 6% increase in participation since last year, he says. While COVID-19 initially spurred interest in tennis as a socially distanced activity, the USTA’s challenge has been keeping players engaged. “Our issue isn’t attraction; it’s retention,” Sherr admitted. “If 100 people try tennis, 98 leave. Reducing that attrition is key to the sport’s growth.”

To meet this challenge, the USTA has modernized its approach, introducing flexible formats and prioritizing infrastructure development. With more courts, diverse coaching staff, and player-friendly programming, Sherr believes tennis can sustain its momentum.

Pickleball: Friend or Foe?

Sherr also addressed the development of an unforeseen complication in tennis’ cultural footprint: the rise of pickleball. While pickleball’s growth in recent years is undeniable, Sherr cautioned against sacrificing tennis courts for pickleball conversions, especially as tennis itself is experiencing a surge in participation. Instead, he proposed a collaborative approach, suggesting that pickleball courts could double as beginner tennis facilities, introducing players to the sport through accessible formats like red ball tennis.

“If people are getting active, that’s a win,” he said. “But the solution isn’t to repurpose tennis courts—it’s to build pickleball courts too.”

By 2035, Sherr hopes to make the United States the most tennis-active nation in the world, with 10% of the population—approximately 35 million people—regularly playing the sport. Achieving this requires creative solutions, from leveraging pickleball courts to addressing a shortage of tennis coaches and facilities. It’s a daunting task, but one Sherr sees as achievable with the right focus.

“It’s not just about hitting a number,” he said. “It’s about creating the conditions to make it possible.”

The Ever-Branching Future of Sports Business

After Sherr’s keynote presentation, the Summit split into concurrent sessions following one of two tracks – Finance and New Frontiers. Among the Finance track were presentations on investing, ownership, sports technology, and more, while the New Frontiers Track focused on topics like sports gambling, the growth of women’s sports, boxing, and sports data. With speakers like Zach Leonsis, President, Media & New Enterprises, Monumental Sports & Entertainment, Waleed Chaudhry, Senior Director, Commercial, FanDuel, and Jachele Vélez, Deputy General Counsel, WNBA, the Sports Business Summit presented myriad entryways and career paths for business students looking to the sports industry after college.

The Summit then concluded with a second keynote session featuring John Middleton, Managing Partner and Principal Owner of the Philadelphia Phillies. In a conversation with Asuka Nakahara, Practice Professor of Real Estate at Wharton, Middleton revealed the challenges of sustaining competitive success, the financial dynamics of the league, and the evolving role of analytics in decision-making. With his characteristic bluntness, Middleton outlined a philosophy focused on one goal above all: winning.

The Big Trophy

“Winning is the only metric that matters,” Middleton declared. “There’s no trophy for spending payroll efficiently. You either win the big trophy, or you don’t.” For Middleton, this focus on success isn’t just rhetoric; it’s a guiding principle. He highlighted how the Phillies have consistently aimed to assemble the best roster possible, even when it requires significant financial investment.

Yet, Middleton acknowledged that not every owner in baseball shares this mindset. He explained how local revenue disparities between large and small market teams create challenges for competitive parity. While the Phillies benefit from Philadelphia’s large population and passionate fanbase, smaller market teams often struggle to retain talent or spend aggressively. Middleton argued for redistributing more money into MLB’s Central Fund to ensure smaller teams remain viable, a move he sees as critical for the long-term health of the league.

The Numbers Behind the Bat

While Middleton’s focus on winning may seem old-school, he has embraced modern innovations, particularly in analytics. He recounted how, as recently as 2013, the Phillies spent virtually nothing on analytics, putting the organization at a significant disadvantage. Since then, the team has invested heavily in data-driven decision-making, integrating analytics into scouting, player development, and game strategy.

“The goal is congruency,” Middleton said, describing the alignment of data with traditional scouting evaluations. He cited recent player acquisitions driven by advanced metrics, such as key bullpen additions that analytics identified as undervalued. However, he stressed that data alone isn’t enough. “You need the right people to interpret it and integrate it with on-the-ground observations.” He sees further technological advancements, including automated strike zones, as inevitable, though he acknowledged the delicate balance of preserving the human elements of the game.