Padel sports clubs in Spain

Abstract

This case study deals with a new racket sport that is seeing strong growth in a number of countries. The study is based on surveys of Spanish padel1 sport clubs, and by grouping these datasets we are able to propose a business plan that may be used as a guide for investors or managers in the sports industry. The paper explores the development possibilities and marketing options for this ascending sport.

Full text

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Padel sports clubs in Spain
Keywords
padel
racket sport
business plan
sports management
sports marketing
Executive summary
In this theoretical and empirical study we begin by
categorising padel as being a racket sport. Following a
brief introduction outlining its origin, we present data
pertaining to the practice of this sport in Spain. This
establishes the basis of our study, allowing us to focus
on the supply side of padel at the present time: an
empirical analysis is carried out through surveys of
sports clubs where this sport is practiced with the
objective of determining the viability of these centres.
With the data gathered from the padel clubs we
develop a business plan which could serve as a guide
to professionals or investors in the area of sports
management. Finally, we explore the possibilities of
expansion for padel beyond Spanish borders analysing
different marketing strategies .
The history of Padel
European countries such as Spain, France and
England, along with South American countries such as
Argentina, have over the past few years witnessed a
real explosion of interest in padel. To analyse this
phenomenon in depth, we will look into its origins and
differentiate padel from other racket sports.
Among the documents we have relied upon to
identify the historic roots of padel we include the
studies of Hernández-Vázquez (1997), Correa &
Correa (2006), papers presented at the IV World
Congress of Science and Racquet Sports (Madrid,
2006) and information provided by the Spanish and
international associations of padel. This takes us to
the first quarter of the 20th century, where a game
similar to padel was played for leisure by the
passengers on English cruise ships. A comparable
game, called ‘paddle-tennis’, was played in the parks
Abstract
This case study deals with a new racket sport that is
seeing strong growth in a number of countries. The
study is based on surveys of Spanish padel1sport clubs,
and by grouping these datasets we are able to propose a
business plan that may be used as a guide for investors
or managers in the sports industry. The paper explores
the development possibilities and marketing options for
this ascending sport.
Mercedes Rodriguez-Fernandez
Professor, Economy and Businesses Department, University of Malaga
Francisco Trujillo Villanueva s/n, Ampliacion Campus de Teatinos
29071 Malaga, Spain
Tel: + 34 951 952 082
Email: mmrodriguez@uma.es
Peer reviewed
1. It is important to specify that two different terms in English refer to the same sport: namely, padel and paddle. This paper uses padel, as it is the term
used in the Spanish language.
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of New York at that time. The sport, played with a
short-handled racket and without a centre net, was
also played in other states, including New Jersey,
Connecticut and Washington D.C., and was practised
as a substitute for tennis during the winter season.
Research into the origins of padel in Spain brings us
to Alfonso de Hohenlohe, a Spanish businessman and
a member of the German nobility. He is best known
for his promotion of the Spanish coastal resort town of
Marbella in the Costa del Sol in southern Spain and
the foundation of The Marbella Club (1954), an
exclusive resort club that attracted the international jet
set. In 1974 de Hohenlohe visited Mexico, invited by
a Mexican industrialist, Enrique Corcuera, who, in
search of a less demanding racket sport, had created
a game (Paddle Association of Canada, 2008). This
consisted of adding front (fronton) and back walls 3
metres in height to a court, placing a net in the
middle and enclosing the entire playing area with a
fence. The game was played with wooden rackets and
a tennis ball and was called padel-tennis.
Upon his return to Spain, Alfonso de Hohenlohe
perfected his new-found sport by finetuning details of
the court (type of surface, dimensions), establishing
rules for the game and later building the first two
padel courts at The Marbella Club. He continued to
spread interest among tennis stars, including Manolo
Santana, winner of four tennis grand slams in the
early 1960s, who organised tournaments. The two
men began to build padel courts at other clubs around
the Costa del Sol.
In 1975 another friend of Alfonso de Hohenlohe, the
millionaire Argentinian Julio Menditegui, a regular visitor
to Marbella, decided to take the game to Argentina,
where within a few years it enjoyed an unprecedented
surge of popularity. Today it is the second most
practised sport in the country - after soccer (Correa &
Correa, 2006). Interest in padel spread, to Brazil,
Uruguay, Chile and Paraguay, gaining many players,
and its influence reached North America, as
demonstrated in the appendix list of padel associations.
The spread of padel in Spain began in large cities
such as Madrid, Barcelona, Seville, Malaga, Valencia,
La Coruna and San Sebastian, where courts were built
in sports clubs that previously had had only tennis
courts. An important milestone in the sport’s history
is the founding in 1987 of the Spanish Padel
Association at the Moraleja Golf and Country Club in
Madrid, with the objective of first, promoting this sport
throughout the country and second, organising
tournaments at the most prestigious Spanish clubs
(Hernández-Vázquez, 1997).
On 25 July 1991 the International Padel Federation
was founded in Madrid, with Spaniard Julio Alegría
Ártica as its president. His responsibilities included the
creation of an international circuit for the game and
the specification of a standard set of rules
(International Padel Federation, 2008). Two years
later, in May 1993, the Spanish Superior Sports
Centre (CSD) recognised padel as a sporting
discipline. The following year, the Spanish Padel
Association was created and registered in the Registry
of Sporting Associations of the CSD.
Padel associations also exist at regional level, with
Madrid the first to be founded, in January 1992,
followed Catalunia, Basque country, Galicia, Andalucia
and Extremadura. Since then many regional, national
and international circuits have been organised and
countless tournaments have taken place, sponsored by
corporations and organised by the federated clubs.
The first worldwide Padel tournaments took place at
the Moraleja Golf and Country Club in Madrid and at
the World Exposition in Seville in 1992, with the latter
seeing delegations from 11 countries from America
and Europe (Spanish Padel Federation, 2008).
Factors contributing to the spread of padel
To further study the development of padel we must
first develop a general categorisation of racket sports
in order to position padel within this group. As a
starting point we have chosen scientific studies on
sports practice carried out in Spain (CIS y CSD, 2005;
Llopis-Goig & Llopis-Goig, 2006) and have derived
the following configuration (Table 1).
As can be seen from the above classification, padel
can be considered a racket sport that sits alongside
Padel sports clubs in Spain
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tennis, table tennis, squash, badminton, fronton,
trinquete or frontennis. Data on development in Spain
over the past ten years of the different types of racket
sports support the interest of our study. As can be
observed from Table 2, over this period all racket
sports lost market share with the exception of padel,
which increased its share from 1.4% to 2.4%
between 2000 and 2005.
Further proof of this growth comes from the
proliferation of public and private sports centres where
the sport is played and which saw an increasing
conversion of tennis courts to padel courts. The
holding of padel tournaments and leagues, previously
non-existent, over the last few years is further
indication of the spread of the sport.
The celebration of the first world championships
held in Mendoza (Argentina) in 1994, in which the
US men’s team participated is an indication of the
sport’s influence and spread achieved beyond Spain’s
borders, particularly in the US and South America.
This case studied included an in-depth study, based
on research findings and personal experience and
supported by interviews, to determine what main
factors have been involved in the increase in
popularity of padel. The results include a list of
factors, set out below, which represent a costless
marketing campaign principally based on word of
mouth.
Padel sports clubs in Spain
RACKET SPORTS
TENNIS PADEL TABLE TENNIS SQUASH OTHER
FRONTON
TRINQUETE
FRONTENNIS
TABLE 1 Classification of racket sports in Spain
Source: compiled from CIS & CSD (2005) and Llopis-Goig & Llopis-Goig (2006).
% PRACTICE OF RACKET SPORTS 1995 2000 2005
TENNIS 18 13 8.9
TABLE TENNIS 5 3.8 1.8
PADEL -- 1.4 2.4
BALL 6.0 3.9 2.7
SQUASH -- 1.9 1.3
BADMINTON -- 0.8 0.5
TABLE 2 The evolution of racket sports in Spain
Source: CIS & CSD (2005), García-Ferrando (2001) & Llopis-Goig & Llopis-Goig (2006).
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Reasons for the increase in popularity of padel
1. Playing sport is necessary in order to lead a life
balanced between work and leisure (Lock & Wister,
1992) and padel allows this equilibrium.
2. As the game is played with four players, it brings
people together and enables social encounters, as
discussed by other authors in relation to various
sports (Kruse, 2003; Wheaton, 2007).
3. The sport has a gentle learning curve - padel is
easily learned at any stage of life - when compared
with other racket sports (Brody, 1987); it requires
less time and effort than other sport to achieve a
reasonable level of play.
4. In order to pay you need only suitable attire,
rackets and balls, all of low cost, so it is easily
accessible to all sectors of the population (see
Casper, Gray & Stellino (2007) as applied to
tennis).
5. The padel racket is versatile and can be used to
play other sports currently practiced around the
world, such as paddle, platform tennis, beach
tennis or any variants thereof.
6. The longer period of time over which the ball is
kept in play the greater the enjoyment for
participants.
7. Many assiduous players interviewed admit that the
sport is captivating and this leads them to play
again and again (as per King, 2010).
8. It is easy to achieve adequate competitive balance
(Sanderson, 2002, p. 209; Zimbalist, 2002)
between four players. Consequently, a high level of
entertainment and excitement is guaranteed.
Limiting factors
As well as the positive factors detailed above, we must
consider the observable drawback that is based on
advanced player experience, that there is a greater
chance of injury due to the high number of
movements (more hits over a given period of time
than tennis, for example) and the types of movement
(the game is rougher than other racket sports).
Relevant studies, applied to tennis, include those by
Kulund, McCue, Rockwell and Gieck (1979) and more
recently Silva, Hartmann and de Souza Laurino
(2007), Thijs, Van Tiggelen, Willems, De Clercq and
Witvrouw (2007), and Van Zoest, Janssen and Tseng
(2007). For padel, however, no relevant references
have been found, probably due to its short history.
Investigating factors that weigh against the
expansion of padel we find, besides its sheer
unfamiliarity, first, the excessive competition that exists
between the different sports categories. This hinders
the introduction of new sports because they must
battle to obtain a share of a market already saturated,
particularly given the wide variety of racket sports
practised. A second opposing factor is the
entrenchment of sports such as baseball, basketball,
football and soccer, which have all been played by a
large proportion of the population and over a long
period of time. This creates a strong cultural
dependence that is transmitted from parents to
children (Coakley, 2006; Hoyle & Leff, 1997), that is
to say, parents who have practiced a given sport over
their lifetime are more inclined to encourage their
offspring to practice that same sport (Deflandre et al,
2004; Kay, 2006). In principle, this should act as a
barrier to entry for padel.
A third negative factor when considering the
potential for expansion of padel relates to the influence
exerted by the business cycle or the general economic
situation at any one time in Canada and the US
(Kaplan, 1998; Mahony & Howard, 2001). As in
other countries, the allocation of financial resources is
very much conditioned by the state of the economy
(Lera-López & Rapún-Gárate, 2007; Oga, 1998), so
the economic cycles in North America, and their
strong influence upon other countries, can, to a
certain degree, influence the practice of a new type of
sport. Analysis of the actual leverage of this over a
sport would be the objective of another study.
Finally, we emphasise the lack of awareness of and
familiarity with padel throughout the world. As other
authors have pointed out, trends and fashions can
cause changes in demand for sports and leisure
activities (Barlow, 2004, p.141). By way of example,
in Spain padel is amply referred to in the media, is
Padel sports clubs in Spain
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presently in vogue and is established socially. All these
aspects would act as a barrier in North American and
other countries as the sport is neither known nor
popular. This acts on the demand side, as a strong
impediment to its practice, and on the supply side,
preventing the opening up of sports centres.
A business plan based on interviews with managers
in Spanish padel sports clubs
In Spain, the profitability of sports businesses has
received little attention for primary research. We can,
however, mention recent research by Gallardo-
Guerrero, García-Tascón and Burillo-Naranjo (2008),
on the appropriateness of having specific sports
management software to run sports club operations
adequately. For greater economic accuracy, we carried
out an empirical study via a survey among racket
sports clubs spread across the Spanish territory that
asked for up-to-date information on the utilisation of
the padel courts. The results of the technical data
gathered from this survey are reproduced in Table 3.
The data was collected from information readily
available on the internet for sports associations for all
Spanish provinces and from journals specialising in
padel - such as Padel Racket and Padel Magazine. of
the results come from 457 sports clubs that have a
minimum of one padel court and that allow players to
pay a rental fee for the court or to take lessons.
The formula to calculate the sample size from a
finite universe (equal or less than 100,000) such as
ours is the following (Bello, Vázquez & Trespalacios,
1993):
where:
N = sample size
Np = data universe
Z = number of units of typical standard deviation in
normal distribution which will produce the
desired degree of confidence
K = error or maximum difference between sampling
proportion and data universe proportion we are
prepared to accept
P = percentage of data universe that possesses the
characteristics of interest (if this is unknown, it
is convenient to use the most unfavourable
case, namely P=50%)
Applying the above formula with the data for Z, K and
P shown in the technical data (see Table 3) gives us a
result for the sample size equal to 86.22. After
rounding, 86 is the value we used to carry out our
surveys on use and prices of padel courts in sports
centres across Spain.
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CASE STUDY
Padel sports clubs in Spain
DATA UNIVERSE 457 SPORTS CLUBS
SAMPLE SIZE 86 CLUBS
SAMPLING ERROR +/- 4.2%
CONFIDENCE LEVEL 95.8%; Z=1.73; K=0.084; P=Q=50%
SAMPLING PROCEDURE BY QUOTA DISTRIBUTING EQUALLY THE SURVEYS THROUGHOUT THE NATIONAL TERRITORY
FIELD WORK DATE JANUARY 2009 THRU MAY 2009 INCLUSIVE
TABLE 3 Technical data from a survey among managers of padel sports clubs
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The results have been integrated in a business plan,
using the average values given by the 86 managers
who participated in the study. It must be noted that
this data refers to factual values as opposed to a pro
forma statement, the latter being the norm for a
traditional business plan (Góngora, 2005, p.13).
However, these results were obtained during a period
of strong economic activity in Spain, so an optimistic
bias is to be expected.
For our business plan we proposed the creation of a
sports centre, by renting the land, and the installation
of four padel courts, changing rooms, a social
clubhouse and a cafeteria/bar. As a guideline we used
the five dimensions for entrepreneurship activity as
outlined in Terjesen & Argue (2010).
The start-up expenses prior to the opening of the
club are listed below:
1. Incorporation of the company to manage the club.
We estimated 3,000 euros (€).
2. Land purchase or rental. We leant towards renting
the land and estimated a monthly outlay of
€1,200. This expense will be included as an
operating expense of the business.
3. Construction of the courts, clubhouse, changing
rooms and cafeteria/bar. We sourced figures from
different builders specialised in padel courts. The
average construction cost of a court with lights and
properly finished with plexiglass was in the order
of €30,000. Hence, the cost for four courts
allowed is €12,0000. The building costs for the
clubhouse, cafeteria and changing rooms were
approximately €200,000, subject to modification
depending on the quality of the finish..
4. Cost of furniture and computer systems were,
estimated at around €6,000.
The aggregate expense prior to start-up of operations
was calculated by adding up the costs outlined above
(except rent, which is included as an operational
expense, resulting in the following:
Expenses prior to start-up of operations (euros):
3,000+120,000+200,000+6,000= 329,000
For operational expenses we highlight the following:
We assume one person will be hired to manage the
general administration of the club, tend the cafeteria
and take care of equipment sales as well as perform
maintenance duties on the courts and grounds.
Additionally, one person will be contracted full time to
give classes. In cases of an excess in demand, another
person will be contracted part-time, to be paid by the
hour. The total cost of the venture will be
approximately €3,500 per month, including social
security taxes.
1. Rental of the land is €1,200 per month.
2. Supplies (rackets, balls etc.) we estimate at €100
per month.
3. Maintenance of courts (artificial turf, sand, nets,
etc.) is estimated at €100 per month.
4. Electricity, telephone, water expenses and
insurance are estimated to be €250 per month.
5. Outsourcing agency fees are estimated at €50 per
month.
6. If our initial investment of €329,000 is financed
by a €350,000 bank loan, payable over 20 years,
interest amounts to €2,306 per month, (this was
based on a 5% interest rate).
Total operational expenses in euros (excluding
interest expenses) are:
3,500+1,200+100+100+250+50 = 5,200
A forecast of revenues derived from renting the courts
is shown in Table 4.
Our results show that the padel sports centre is
profitable from an economic point of view, even during
as the months of November, December, January and
February, when a smaller turnout of clients is to be
expected. Profits increase progressively and peak
during the months of June, July and August, thereby
generating high profitability to the investor. Financial
results will depend heavily on the entrepreneurial
ability of the club manager and success of the clubs
Padel sports clubs in Spain
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Padel sports clubs in Spain
JFM AM J J A SO N D
HOURS COURT OCCUPIED PER DAY 5 6 7 7 8 9 10 10 9 7 6 6
TOTAL HOURS PER DAY
(4 COURTS) 20 24 28 28 32 36 40 40 36 28 24 24
PRICE/HOUR 10 10 10 10 10 12 12 12 10 10 10 10
TOTAL MONTHLY (30 DAYS) REVENUES
RENTAL OF COURTS 6,000 7,200 8,400 8,400 9,600 12,960 14,400 14,400 10,800 8,400 7,200 7,200
TABLE 4 Forecast of revenues (euros) from rental of courts
JFMAMJJASOND
TOTAL REVENUES 7 685 8 885 10 285 10 785 12 185 16 195 18 385 18 385 14 285 10 785 8 885 8 885
OPERATING EXPENSES 5 200 5 200 5 200 5 200 5 200 5 200 5 200 5 200 5 200 5 200 5 200 5 200
OPERATING INCOME 2 485 3 685 5 085 5 585 6 985 10 995 13 185 13 185 9 085 5 585 3 685 3 685
INTEREST EXPENSE 2 306 2 306 2 306 2 306 2 306 2 306 2 306 2 306 2 306 2 306 2 306 2 306
NET INCOME 179 1 379 2 779 3 279 4 679 8 689 10 879 10 879 6 779 3 279 1 379 1 379
TABLE 8 Income statement (euros) of the sports centre
JFMAMJJASOND
MONTHLY HOURS OF LESSONS 35 35 45 70 80 90 120 120 100 70 35 35
PRICE PER HOUR 20 20 20 20 20 25 25 25 25 20 20 20
TOTAL REVENUES FROM LESSONS 700 700 900 1 400 1 600 2 250 3 000 3 000 2 500 1 400 700 700
TABLE 5 Forecast of revenues (euros) from lessons
JFM AM J J A SO N D
TOTAL MONTHLY REVENUES 7 685 8 885 10 285 10 785 12 185 16 195 18 385 18 385 14 285 10 785 8 885 8 885
TABLE 7 Total monthly revenues (euros).
RACKET SALES OF SALES OF SALES OF ORGANIZATION OF EQUIPMENT CLIENT
SALES OF BALLS CLOTHING REFRESHMENTS TOURNAMENTS RENTAL FEDERATION
AVERAGE MONTHLY REVENUES 150 300 150 150 200 20 15
TABLE 6 Other revenues (euros)
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will be influenced by the level of complementary
services offered and the acumen of the business
directors (Mischler, et al, 2009). Overall, given the
positive outcome for the Spanish case study we found
it expedient to focus on padel´s potential beyond
Spanish borders.
Global marketing strategies for padel
Through data presented by the United States Padel
Association (USPA, 2008) and electronic sports
magazines (Sierra, 2008), we observed the existence
of other racket sports similar to padel, such as paddle
or platform tennis, in the US. The above sources state
that padel is currently played in only two US cities -
Houston (Texas) and Chatanooga (Tennessee), where
it is played in a very specific setting, namely in private
and social sports clubs (May, 2008).
In Canada, the Paddle Association of Canada (PAC)
disclosed that Canada had 3 courts and more under
development (PAC, 2008, p.1). The first paddle court
was built in mid-1992 inside a Calgary warehouse
and operated for nearly one year. The court was used
to attract some of Calgary’s top tennis and squash
players, many of whom still play the game today. In
May 1993, the first paddle team representing Canada
internationally played the Corcuera Cup in Acapulco,
Mexico (see About Paddle in PAC, 2008, pa. 2).
The general objective of padel associations (see
appendix), and particularly that of USPA and PAC, is
to promote and spread the practice of padel
throughout North America. The world championships
held in Calgary, Canada, in August 2008 probably
contributed to the exposure of the sport and its spread
throughout the American continent.
Efforts towards expansion by the associations will be
reinforced by those same factors that enabled the
sport to flourish in small clubs in Spain - it is easy to
learn and requires minimal investment in terms of
time and money, provides a high degree of enjoyment,
increases social interaction for the players and the is
played with equipment that is relatively low cost
We also point to one of the greatest advantages of
practising sport in general, namely achieving a greater
level of overall health and well-being, improved
physical-psychological equilibrium and, without doubt,
an overall higher quality of life (Kerr, Norman, Sallis &
Patrick, 2008; Wigger, 2001).
Finally, marketing strategies for the introduction and
spread of padel at international level would be based
on the following bi-dimensional approach: we consider
that it would be crucial that the role of ‘ambassador’
be taken by someone well known in the world of
sports, politics or some other field, to inspire others
and trigger participation in the population at large.
This would be complemented by and coordinated with
a gradual and progressive introduction, limited initially
to those areas considered to more likely to be
receptive to the sport (for example, in North America,
this would be the cities in the southern states).
Conclusion
In closing, we must emphasise a few points about the
results of our study. Our first objective was to classify
padel as a racket sport and to delve into its origins. A
theoretical framework was established, encompassing
the principal authors who have studied sport and
specifically those who have focused on racket sports.
This established the context for our empirical study.
We presented the principal factors that brought about
an increase in demand for padel at international level
and by focusing on Spain analysed the economic
viability of padel sports centres.
Certain questions then arose: could the results
obtained in the Spanish case study be extrapolated to
other regions? Would demand for padel exist in these
countries? Would the practice of this sport spread
beyond Spain? Could the same level of profitability be
achieved elsewhere as in the Spanish case study?
In an attempt to answer the above questions we
analysed economic, cultural, social and public health
factors that could indicated the potential for the
international expansion of padel. We then presented
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those elements which, in our judgment, work both in
favour and against the spread of the sport. The various
forces at play, and the local environment, will be
determining factors affecting the success of the
introduction and expansion of padel.
By focusing on padel in Spain we have been able to
present positive results obtained for both an
entertainment and a business point of view. Sports
managers and authorities throughout the world would
do well to stay abreast developments in this
burgeoning sport and become open to formulating ad-
hoc padel marketing strategies.
© 2011 International Marketing Reports
Biography
Mercedes Rodriguez-Fernandez is a professor at the
University of Malaga and has been teaching economy
and businesses administration since 1993. Her main
research interests are in tourism, sport management
and work organisation. She has written numerous
papers on tourist management and human resources
and has lectured extensively around the world.
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CASE STUDY
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48
International Journal of Sports Marketing & Sponsorship
lOCTOBER 2011 l
CASE STUDY
Padel sports clubs in Spain
Appendix
International padel federations and associations
Spain
International Padel Federation (FIP)
http://www.padelfip.com
Spanish Padel Federation (FEP)
http://www.padelfederacion.es
Argentina
Asociación de Pádel Argentino (APA)
http://www.padel.org.ar
Asociación Civil de Clubs de Pádel
http://www.padelaccp.com.ar
Austria: Austrian Paddle Association
http://www.paddle.at/
Belgium
Fédération Belge de Paddle
http://www.padelbelgium.com/
Brazil
Confederaçao Brasileira de Padel
http://www.cbpadel.com.br/
Canada
Paddle Association of Canada
http://www.paddlecanada.net/
Chile
Padel Chile LTDA
http://www.padelchile.cl/
France
Fédération Française de Padel (FFP)
http://ffpadel.free.fr/
Holland
Nederlanse Padel Sport Federatie (NPSF)
s.noordzij@personnelity.nl
Italy
Federazione Italiana Gioco Paddle (FIGP)
http://www.paddleitalia.it/
Mexico
Federación Mexicana de Padel AC (FE.ME.PA.)
gordorica@grupoloma.com.mx
http://www.femepa.com.mx/
Paraguay
Federación Paraguaya de Padel
cgiubi@feparpa.org.py ; rrpp@feparpa.org.py
Portugal
Associaçao Portuguesa de Padel
http://www.padelapp.com/
Sweden
procamp@swipnet.se
info@bastad.nu
Switzerland
Swiss Padel Association
Uruguay
Asociación Amigos del Padel de Uruguay A.A.P.
secretariapadeluru@yahoo.com.ar
USA
The United States Padel Association (USPA) (previously known
as American Paddle Association)
NSAMike@aol.com
http://www.usapaddle.com/
SMS13.1 paper 3 Padel pp38-48 KT2 4/11/11 20:14 Page 48

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