MLP and PPA Announce Merger as Big Questions Remain for the Future of Pro Pickleball
Are we in the Twilight Zone? It feels like yesterday that the PPA and MLP were merging following the initial creation of the Vibe Pickleball League and it probably feels like that because it was less than a year ago. After a merger that never got finalized, the players were once again involved in a signing frenzy that was amped up significantly. With the recognition by the dueling entities that a prolonged fight for supremacy would be unsustainable, on Thursday morning, the PPA and MLP announced a full merger to form a unified professional pickleball organization. The press release by MLP read as follows:
âToday, leading professional pickleball organizations MLP by Margaritaville (MLP) and Carvana PPA Tour (PPA Tour) announced an agreement to merge under a unified and definitive professional pickleball holding company. The consolidation of the two entities is backed by a $50M investment from SC Holdings, D.C. Pickleball Team owner Al Tylis, PPA Tour owner Tom Dundon, and a roster of existing MLP team owners.â
The press release was rather bare bones on the details of the merger. As we know from last year, a merger sounds great in theory, but the devil is in the details. With MLP having a significant leg up on the PPA following the most recent signing frenzy, conventional wisdom would have had us believe that MLP would be able to dictate any negotiations with the PPA. Although the press release includes limited details, our understanding of the situation is that the merger terms are far more equal than we would have expected considering the circumstances (Rob Nunnery and Adam Stone referred to the merger as âequalâ on their recent podcast episode). The merger leaves a bunch of big questions that both fans and even players are left wanting answers about.
According to the press release, a new holding company will be created that merges the two entities under one roof. The new holding company will receive a $50 million cash investment as those parties investing the new money will l receive additional equity. From our read of the press release, it looks like most of that $50 million is coming from Tom Dundon (owner of the PPA), Jason Stein (SC Holdings and New York Hustlers) and Al Tylis (D.C. Pickleball Team). While the new parent company will support both entities, MLP and the PPA will continue operating as âtwo still-distinct brandsâ for the time being. The press release also notes that both formats, the individual tour style on the PPA and team format with MLP, will continue under this singular competitive umbrella.
This all sounds great in principle. Two worlds. One family. No division of players between the tours and all the best players competing against one another. Thatâs objectively good for the sport of professional pickleball. However, with all that has happened the past 2 to 3 weeks, there were a host of competing interests that had to be balanced as part of this merger. The Dink reported this morning that not everyone is happy with this merger and we have also heard that a lot of people are far from satisfied.
The biggest question for players has been whether their contracts will be honored whether they signed with MLP or the PPA. The short answer sounds like a yes. This poses a huge problem from MLPâs standpoint as a large group of players chose to sign with MLP for substantially less money because they trusted in MLP. The PPA started offering insane amounts of money to players because that is what they needed to do to stay relevant in the âTour Warsâ. Weâre talking about low six figures to half a million for players with limited resumes or who are virtually unknown â for example, Stone and Rob reported $500,000 for Quang Duong. If those inflated PPA contracts are really going to be paid out to the players, it stands to potentially crush the goodwill MLP created with players.
Why does that matter? This round of the âTour Warsâ negotiation demonstrated how important goodwill can be. In tough times, it pushed MLP ahead of the PPA. Although the two most important entities in pickleball are finally unified, the possible diminishment in goodwill could make this new entity vulnerable to future competitors. With so much money being poured into pickleball, there is an expectation that someone is going to come along and create a future startup league as a competing entity. That could be the APP, but more likely it will be someone that we have not heard of yet. This is not simply about the PPA and MLP as this new combined entity has to factor in what may happen in the future from outside competition. These inflated PPA contracts have thrown the market even further out of whack than they already are, which is going to make it harder to sign and retain players down the road.
There have been rumors bubbling about a player boycott of MLP, which was noted by Nunnery and Stone, and something we have heard separately. The boycott would be from the early signed MLP players if the outsized PPA contracts are honored. We have heard about boycotts in the past that have not come to fruition, but there are many more dollars on the line here. One line of thinking is that players should be grateful that they are going to be receiving way more money than they could have dreamed of a year ago. This is undoubtedly true for a sport that has such limited viewership.
However, the other side of the coin is how you would feel if an organization you trusted honored similar contracts that they convinced you not to take. Some of these MLP signed players took half as much, if not more, than what they could have signed for with the PPA. For so many MLP signed players players, their decision to sign on the dotted line was based primary on trust with the MLP and the choice to agree to an equal merge potentially ruins that trust moving forward. In our opinion, players should feel justified in that sentiment even if they are getting paid above expected market value regardless. If the players want to put the pressure on MLP, a boycott is the best way to put that pressure on them, but getting enough buy-in is the difficulty.
MLP had more leverage than the PPA here. Getting players to sign for less money based on trust and then conceding to the PPA when in a position of strength is a tough look. What other options were explored by MLP? Did MLP consider voiding the contracts of most of the PPA players, other than Ben Johns and Anna Leigh Waters, and offer them MLP level deals? Itâs unclear for us whether that is a viable option from a legal standpoint, but should MLP really have cared if the non-#1 players in the world got pissed and chose not to come over to MLP? We have heard that certain MLP early signed players have gotten a pay bump from MLP, but we are quite certain that not all early signed MLP players got a pay bump from the initial deal.
The PPA has shifted the market on what players can get paid but now both sides are going to be sharing in those costs equally. MLP had some pressure to get a deal done considering the Atlanta event is coming up in a week and a half. However, from an outsiders perspective, it sure appears that MLP has lacked a killer instinct in the âTour Warsâ. Itâs hard to imagine that Tom Dundon and the PPA would have agreed to something similar had they been in the position that MLP was the past week.
Speaking of Dundon, another big question is who will be running the show for the new entity? There have been rumors floating around that significant players such as Tom Dundon or Steve Kuhn could be out of the mix, but that does not appear to be the case at this time. Everyone is going to be involved in the immediate future, including the polarizing commissioner of the PPA, Connor Pardoe.
It is clear that Pardoe, and Deputy Commissioner, Chris Patrick, have been the main sources of the trust issues that plagued the PPA in this latest round of negotiations. Pardoeâs bizarre inability to tell the truth has poisoned the well with all but a small handful of players and his ongoing presence creates a potentially awkward situation that stands to further harm the trust players have in the new entity.
The Pickle Pod and KOTC Podcast reported that Al Tylis, Jason Stein, Brian Levine (former MLP interim CEO), Tom Dundon and Steve Kuhn will have the 5 board seats for the new holding company, giving the former MLP group a slight edge there. Dundon and Kuhn are also going to be keeping their amateur investments (i.e. DUPR, Minor League Pickleball, Pickleball Brackets/Tournaments, Pickleball Central). Weâll see what the new company does going forward, but the main players from both MLP and the PPA are sticking around. There will be a search for the CEO of the new entity at some point.
Itâs worth noting in messaging provided by MLP/PPA about the merger is that it is different this time around because the it is a merger, not simply an agreement to run competing businesses in conjunction with one another. As pointed out by Thomas Shields, last time around it was Vibe and MLP merging whereas this time it is PPA and MLP coming together as one.
What sometimes gets lost in the âTour Warsâ discussions is the fact that there is pickleball to be played. Itâs the whole reason why we have âTour Warsâ. All signs are pointing to 2023 going forward as planned for both MLP and the PPA. There is not going to be a redraft or a change of format for MLP, except that the 2023 results will not determine if a team is Premier or Challenger for 2024. It sounds like MLP is putting the promotion/relegation system on hold and that means the stakes for ownership groups is suddenly minimal for 2023.
The high stakes of the 2023 results added an extra layer of intrigue to MLP and weâll be curious if that takes any of the juice out of it for fans and players. There is already so much confusion around the MLP format and fans are going to have to adjust to new circumstances once again. The merger is probably good for long-term business, but this new entity has to do a better job than MLP has previously about communicating how things are going to operate if they want fans to get invested in MLP.
As noted at the beginning, the 2024 situation still needs to be figured out but the plan right now is for an equal, or relatively equal, split of tour and team events. We understand that there are compromises that both sides have had to make in this merger, but itâs not ideal that there are going to be tour events run under the PPA banner and team events run under the MLP banner. In our view, the market is somewhat split on whether there is a preference for the standard tour style events versus the rally scoring, MLP team format. Even if the MLP and PPA are going to be running their events under one company, one thing to monitor will be which direction the new company takes â tour or team format.
Itâs unclear to us whether the two brands thing is savvy or dumb. They seem to be doing it out of an inability to reach a compromise, but it could complicate things unnecessarily. There is an opportunity for additional sponsorship/ with two distinct brands, but you have to wonder if it confuses the consumers.
Furthermore, players were signed that had different commitment requirements between MLP and the PPA. How does that affect things with two different brands? What about the players who were promised teams or equity in teams? What happens now? We donât know if they have answered these questions in the course of their negotiations.
The draft has been a big part of MLP since its inception in 2021. However, the expectation is that MLP will move away from drafting teams in 2024, instead following more of a European soccer free agency model with some kind of salary cap in place. This is going to be another new wrinkle for fans to understand and that seems to be the biggest issue with MLP currently. There is not a set format for how the league is going to operate and itâs impossible to keep track of for even the most hardcore pickleball observers.
Another thing to keep an eye on for MLP in 2024 will be on all the players with guaranteed deals. The new holding company is going to be paying over 150 players guaranteed salaries to play their events and it is inevitable that a lot of those players will be left out of the mix for MLP, unless there is some kind of roster expansion that occurs. According to KOTC, those players will still be able to play tour events and the legacy APP players can still go play APPs.
One other group of players that we have not discussed are unsigned players and where they fit into all of this. Our expectation is that unsigned pros will be able to play the tour style events and have the opportunity to be signed/drafted to an MLP team, but thatâs only our speculation. There has to be a place for new players to enter into the equation and it seems that the new company will have to eat the costs for a lot of the players that signed who may end up being irrelevant from the get go. What the market will be for players who rise to the top in a sport where there is only one major tour/entity is completely unknown as well, but itâs evident that the current market for players could not continue at the rate that it was going.
The bottom line with all of this is that pro pickleball is secure for the time being. We get to see all the best in one place and the opportunity to see potential rising stars like Jack Sock compete against everyone else. That is the most exciting part of this situation. We know that things can change and these mergers are not as simple as they are made out to be. There are so many questions still to be answered and issues to be sorted out by the merged entities. All we can do is hope for the best and cross our fingers that what has happened will be for the better of pro pickleball in the years to come.
Agree or disagree? Let us know in the comments below or email us at nmlpickleball@gmail.com. Follow us on Twitter, Instagram, Threads and Facebook. Also, listen and subscribe to our podcast on Apple, Spotify and YouTube!
It feels like everybody is day trading, trying to win the day. Short-term, reactionary processing. I realize that might be what is needed right now, but it isn’t visionary. Sometimes it feels like we’re watching the growth and implosion of the USFL in the 1980s, all over again.
It is a bit reactionary for sure. Short term to hopefully win long term then realizing that itâs going to take much more
I think it’ll be confusing to have 2 different brands for casual fans. A lot of players pay no attention to MLP now. If they happen across it on Tennis Channel or an ESPN outlet, I highly doubt they’d know it was in any way associated with PPA. One name that could become a household name would create more buzz but I’m a marketing layman.
One thing I was not aware of until Travis and Graham on Tennis Sucks discussed it was how many other countries are trying out MLP’s format. The international growth of MLP may be where the real future lies. Who knows. But it could be one reason to keep distinct brands.
It sounds like the early signed MLP players are mad because PPA will continue to exist. They didn’t take the higher $$$$ because they never thought PPA could pay out those $$$$ and that was a gamble by them. They were wrong. They can blame MLP for being wrong if they want to absolve themselves of all responsibility. But Pardoe tweeted that the money was there and said $15 million would be coming from the other pickleball inc companies. They could have chosen not to believe that but I don’t see how MLP can seriously be blamed by any responsible adult.
Even after signing with one of them, pros were saying it would a better product if the pros were not split. So they must have suspected that something would happen at some point to bring all pros back together. I didn’t hear anyone say that they thought this would be a permanent split even if MLP on paper won.
MLP players may or may not get the time off they were promised – an “off” season. Zane seemed to think he’d still get it. If that promise is null and void, players could rightfully be upset about that. With all the new signings, it seems like they’d have more than enough “fill-ins” for players to take substantial time off from both MLP and PPA.
Some players will be allowed to play APP. I wonder if some MLP players will be allowed to play US Open (if interested) or more exhibitions while PPA will still be restricted. Another question for what “under one roof” will mean.
Definitely will be confusing. MLPâs format is being used all over the place in different capacities or variations. We are seeing that in Canada a bunch already. Players love the team format at the amateur level too.
It is a business and their decision at the end of the day, but when you present as the trustworthy organization it inevitably hurts that trust when they are going to pay everyone.
Thank you for all the great information. Is it secure? Will the players get paid ‘properly’? What is sad is that you have to ask that question. That’s how this sport is right now, how it has been, and how it will be, in the near future. But honestly, I think the sport is FUBAR’ed along with many of the players.
Get a players’ union started or continually get screwed. Their choice. Okay, back to COD MWII.
It would be great if we didnât have to ask these questions
Being signed under a PPA or MLP contract is just a sponsorship at this point. Fernando Verdasco changed racquet sponsors about 7 times over his career. Some he played worse with, some better, and I bet he liked 1 organization more than another. It was all about the money at the end of the day. Players can always change.
Players should be concerned as Zane mentioned about what happens after 3 years.. These tours do not bring in enough money to pay these players what they signed for.. So after the cash infusion is gone they will either need to be profitable (doubt that) or have good growth to attract other investors..
There is plenty of money and brain power behind this combined entity.. These are very successful business people.. Time will tell..
Everything is changed in 3 years. Gotta get the money while you can with limited earning potential and new players coming in the game. Will a lot of these players be around in 3 years?
We have seen that players can still change like PPA ones who went MLP, but this is supposed to be more than a sponsorship
Isn’t this almost exactly like the PGA-LIV merger where PGA loyalists who forwent a larger salary from LIV ended up receiving equity in the merged entity? Doesn’t seem like a terrible solution, although it’s evident from precedent that something needs to be done to compensate MLP loyalists. It’s clearly unfair to them.
It is somewhat similar for sure, but now they arenât giving a pay bump or equity to some of the early signed players. At least not yet. Thatâs the issue
I’m thrilled all the talent is back together again. It’s pretty messy and uncertain, though. I’m still not really sure what all the team owners are getting out of their investment. I like MLP, but it feels like the team stuff is just a fun side event. Also, now that the two sides have merged, it seems like all those bags of cash that were handed out to players ultimately gained MLP and PPA nothing but big numbers in red ink.
It didnât gain anything other than maybe long term unity. ROI will be a long time in the making most likely, if it ever comes
Wow. Another year another absolute upheaval of the pro pickleball world and MLP formatting. There hasnât been a single year MLP has been the same to the next. Literally. All this screams to me is no has has a single Fing clue what theyâre doing. This is frankly embarrassing for the sport as a whole to have such a shit show year after year. If the players donât form a union after this latest round of BS I hope everyone stops feeling bad for them because theyâre doing it to themselves at this point. Itâs hard to believe anything anyone says at this point about anything. How many major things announced never even happened or were essentially just a lie!? How many things were just bluffs and tactics used by the other side!? Weâre getting a front row seat to a bunch of people that are jokes making decisions. Itâs laughable now.
The lack of continuity is a big problem
Totally agree with all your points, especially a players’ union. Ben Johns talked with Casey Patterson a while back about the volleyball union and how it really helped the players.
I disagree about the union, and think
1) unions are useless for pickleball, this is not 1898, nobody is asking them to dig coal without a respirator or work 20 hours a day. The players all just got (according to a player, Zane) massively overpaid, how does a union help with that? A union only takes money from the players, it doesn’t give money to them.
The players got 401ks, health insurance, free travel, greatly reduced work schedule — all without throwing away money to a union.
2) unions are thinking too small. The players don’t need a union, they need to form their own league. The players have all the talent. They are the product. The billionaires are just hoping to make money off the backs of the players.
Yes, the players will still need people like Kuhn to invest, that’s obvious, but if the players own the league, they can decide which investors to accept, and on what terms. The players can decide who gets to sit on the board. It’s a totally different mind-set, and yields a totally different result.
Yes, in the short term, it’s more work for the players and less profit. But in 20 years, if people like Kuhn are right about the growth of the sport, the players who start their own league will be the billionaires, as opposed to working for them. If you believe in the future of the pro game, it’s the right play.
Unions were necessary in some places 80-100 years ago. Now they are less and less useful, and in pro pickleball, they are useless. Pro pickleball is a unique opportunity because the average American still doesn’t know anything about it. There is no “NFL” brand to overcome for market share. There are no stadiums to build, no entrenched establishments. The players can own the “NFL” of pickleball, and reap all the benefits, as opposed to letting outsiders share some of the benefits with the players.
MLP is probably well aware of this possibility — that’s why we saw them agree to give some ownership to the Johnson 5. The new holding company would be smart to offer players equity in place of salary — it would distribute the risk and reduce labor costs, but the players would be smarter still to own the fruits of their labor and claim the whole enchilada.
Fred, I tend to agree about a union not being all that useful here.
But, I disagree that the players should own their own tour. Just ask Casey Patterson about the history of beach volleyball. Player run tours failed. I am very familiar with that history. (In the late 90s I was on the board of USA Volleyball and in charge of the committee on international beach volleyball.) It’s possible that a player controlled tour could be successful, but in my opinion it’s unlikely. The only source of income would be sponsorships, which only work when there are a LOT of viewers. Where would prize money come from if there wasn’t big sponsorship?
All of this is a bit messy right now, but that’s what happens when the rich folks try to control something new that they think has a lucrative future.
Interesting perspective here.
Players organizing a league seems like an unlikely proposition as unifying groups of people who are usually too self-motivated is just a difficult thing to do. But it’s an interesting idea for sure.
From my years in VC and PE, hereâs how the deal probably went down. The new money (SC plus Al) set the terms. Likely the $50M round was for approximately one-third ownership. For arguments sake, pre-money value of MLP and PPA was $50M each. So, cap table now is roughly one-third new investors (all associated with MLP it should be noted), one-third Kuhn and one-third Dundon. So, MLP âwonâ and new investors need to clean up past mistakes (out of control spending, shady dealing, etc.). Feels like the right deal and structure and money to get it right this time.
Weâll have to see but interesting way of looking at it
They should rename the combined entity the MLPA. I like the idea of having a salary cap and no draft. As long as every owner “spends”‘ up to it then it’ll function like an auction draft, and the team balance will be much better than via snake draft.
I thought Kuhn had the killer instinct but in retrospect it looks like he’s just sort of flying by the seat of his pants, another billionaire who got to where they did by sticking there hands in everything rather than actually having real drive and vision. Oh well, hopefully they get Pardoe and Patrick out and iron out the issues with PPA amateur events (i’m actually a believer in combining pro/amateur tournaments when done right).
From past dealings, MLP just had not shown the killer instinct. They tried this time around and didnât follow through. Agreed on combining them, but it just has to be done correctly
There needs to be more talk about how this new merger seems to take a ton of power away from Steve Kuhn guiding MLP. The guy goes all in to sign players and shake up the sport to execute his far-reaching vision – and now he’s relegated to being 1 of 5 people on a board and now he’s focused on amateur stuff? That’s a surprising outcome.
My hunch, and I could be wrong, is that a lot of owners/stakeholders in MLP were less than happy with the decision to get into a major spending war for players for a very unproven business model. One thing to sign a few top players for big money to bring some credibility, but another thing to be shelling out all kinds of cash for guaranteed contracts and benefits for players who are barely pros and probably will be passed by better racquet sport talent in a year or two. On top of that, I can’t imagine that many of these owners were thinking they would have to be as active as they have to be now in order to make the business model of their team work coupled with way more overhead and no TV deals or little major sponsors to pay for things. And I’m sure PPA could have sued them, triggering all kinds of costly litigation that would have been annoying. Maybe MLP signed more players, but PPA had a lot more leverage than people thought.
It seems like Kuhn is a big idea guy who is flying by the seat of his pants. Just a look at DUPR….it is a good idea in theory – but the reality is it is kind of a mess that wasn’t thought through super well and has many, many holes and they are back to the drawing board on many aspects of it. Sounds like MLP is of a similar vain – and I can’t imagine many the investors/owners in MLP were wild about giving the keys to Steve Kuhn to make it profitable.
Steveâs definitely an idea guy and looking to change the world through pickleball. I think heâs getting just what he wants. Approximately 25% ownership of the combined tour/league, friends like Al and Jason in control, a professional CEO to run things and a chance to step away from the day to day and work on the sportâs growth. His reputation is intact and his tactics, while out of character, were required to get MLP treated as an equal to the PPA. Feels like a big win to me.
Good perspective here as well. Maybe Steve doesn’t want to be running something like this either from a day to day operational standpoint.
I’m not saying, at least as of right now, that Steve Kuhn (who seems like a great guy, I have nothing personally against him) is the “big loser” of this. Clearly Kuhn got MLP a bigger seat at the table. But again, at what cost? And what’s the master plan to pay for this massive spending? Why is MLP always changing things? MLP (supposedly) had all this leverage in pro PB and Tom Dundon still has a huge seat at the table and seemingly negotiated very well. And Kuhn might have friends on the board, but those friends just made a massive investment to seemingly bailout the inflated overhead of the league. And for all the vison that Kuhn had with MLP – it just seems odd he give up a lot of control of his baby and doesn’t have a controlling interest in it.
Time will tell if Steve Kuhn is a winner, a loser or somewhere in between in all this. I just think it is surprising that he’s taking a smaller role in MLP. And if the finances in pro PB implode in a few years….his decision to start this bidding war will probably be blamed for it.
These are really good thoughts. Thanks for sharing. Havenât seen you around lately đ
This is a good point to bring up. We should have talked about it more but Steve losing so uch power is a big deal. It definitely sounds like some of the owners were not happy initially with the spending war and they may have gotten more on board later on after MLP was seemingly successful. But then the negotiation going this way also can’t be sitting well with some. Kuhn also may not have that killer instinct mentality necessary at the top to really get done what needs to be done. His idea is still top notch but execution needs to be better overall.