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:
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 “equal” 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 “two still-distinct brands” 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. That’s 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 MLP’s 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 ‘Tour Wars’. We’re talking about low six figures to half a million for players with limited resumes or who are virtually unknown – 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 ‘Tour Wars’ 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? It’s 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 ‘Tour Wars’. It’s 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. Pardoe’s 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). We’ll 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.
It’s 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 ‘Tour Wars’ discussions is the fact that there is pickleball to be played. It’s the whole reason why we have ‘Tour Wars’. 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 we’ll 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 it’s 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 – tour or team format.
It’s 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 don’t 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 it’s 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 that’s 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 it’s 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.
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