The business of padel | FT Scoreboard

Summary

Padel, a fast-growing sport combining elements of tennis and squash, is gaining popularity globally, with the UK and US markets experiencing a post-Covid boom. Originating in Mexico in the 1960s, padel is now a €2 billion industry expected to triple in size. Entrepreneurs and investors are capitalizing on this trend, establishing clubs and online platforms like The Paddle School to teach and promote the sport. Despite challenges like space and planning restrictions, the demand for padel is surging, with courts worldwide projected to double by 2026.

Takeaways

• 🏆 Ground zero for padel, one of the world's fastest-growing sports, is being developed in east London by a Swedish entrepreneur.
• 🏢 The entrepreneur plans to build London's biggest padel center with six courts in addition to the main center court.
• 🚀 The first club, Rocket Padel Bristol, established post-Covid, is the largest in the UK with 14 courts.
• 🌍 Padel's growth bottleneck is securing proper club locations; however, once established, landowners become more proactive.
• 💰 Profitability for padel clubs is achievable within three to six months of operation.
• 🎾 Padel, invented in the 1960s by a Mexican businessman, is a mix of tennis and squash, typically played in doubles.
• 🌐 The sport is popular in Spain and Argentina and is now gaining attention in the UK, US, France, and Germany.
• 💸 Padel is estimated to be worth around 2 billion euros annually globally and is forecasted to triple in size in three years.
• 🤽‍♀️ The sport's appeal post-Covid lies in its sociability and ease of play, attracting people seeking fun and exercise alternatives to the gym.
• 🎥 The Paddle School, an online video platform, was created to teach padel, addressing the challenge of spreading awareness about the sport.
• 🏢 A project backed by Spotify co-founder Martin Lorentzon in Canary Wharf aims to cater to the demand for padel among finance workers.
• 🏗️ Globally, the number of padel courts is expected to almost double by the end of 2026, increasing access to the sport.

Q & A

What is the main topic of the transcript?

The main topic of the transcript is the rapid growth of padel, a sport that is gaining popularity worldwide, with a particular focus on the development of padel clubs in the UK.

Where is the Swedish entrepreneur building a large padel center?

The Swedish entrepreneur is building a large padel center on the outskirts of East London.

What was the first club established by the entrepreneur after Covid?

The first club established by the entrepreneur after Covid was Rocket Padel Bristol, which is the largest padel club in the UK with 14 courts.

What is one of the challenges in scaling padel?

One of the challenges in scaling padel is acquiring clubs and premises, as it requires a significant amount of space and planning.

How long does it typically take for a padel club to become profitable from an operational perspective?

It typically takes between three to six months for a padel club to become profitable from an operational perspective.

Who invented padel and why?

Padel was invented in the 1960s by a Mexican businessman who did not have enough space to build a tennis court at his house in Acapulco.

What are some of the unique features of padel?

Padel is played on a smaller enclosed court, uses tennis scoring, and incorporates a glass wall for returning shots, similar to squash. It is typically played in doubles and is known for being sociable and easy to pick up.

How is the padel business model changing?

The padel business model is changing quickly due to the pace of growth in the sport and the impact of Covid, which has led to increased interest in social and recreational activities.

What is The Paddle School and how does it contribute to the growth of padel?

The Paddle School is an online video platform founded by Sandy and Tom Farquharson to teach people how to play padel and improve their game, contributing to the growth of the sport by educating new players.

What are some of the investments being made in professional padel?

Investments in professional padel include backing from entities like Qatar Sports Investment, DMG Ventures, and the parent company of the New York Yankees baseball team, as well as support from high-profile individuals from the sports world.

What is the expected growth in the number of padel courts globally by the end of 2026?

The number of padel courts globally is expected to almost double by the end of 2026.

How does the padel club in London's Canary Wharf plan to address the challenge of educating the public about padel?

The padel club in London's Canary Wharf plans to run lots of introduction sessions where people can try out padel for one session, learn the basic rules, and be ready to play a game. They also plan to run junior academies to engage children and build a grassroots sport.

Outlines

00:00

🏆 Growth of Padel: A Rising Sport

This paragraph introduces the rapid growth of padel, a sport originating from Mexico in the 1960s and now gaining popularity, particularly in London. It discusses the establishment of a large padel center by a Swedish entrepreneur and the challenges of scaling the sport, including finding suitable locations and educating the public about padel. The paragraph also touches on the inventor's background, the sport's appeal due to its sociability and ease of learning, and its increasing commercial value, with global estimates of worth around 2 billion euros and a forecasted tripling in size over three years. The impact of Covid-19 on the sport's growth is noted, as well as the role of online platforms like The Paddle School in teaching and promoting padel.

05:01

💼 Investment and Development in Padel

The second paragraph focuses on the investment in padel, highlighting the involvement of significant investors and sports personalities. It mentions the backing of major companies like Qatar Sports Investment, DMG Ventures, and the parent company of the New York Yankees. The paragraph also discusses the high-growth potential of padel, attracting both institutional and individual investors, including celebrities and athletes. A project in London's Canary Wharf, backed by Spotify co-founder Martin Lorentzon, is highlighted as an example of repurposing land to meet the demand for padel courts. The challenges faced by investors, such as space constraints and planning restrictions, are acknowledged, but the expected doubling of global padel courts by 2026 is seen as a positive sign for the sport's accessibility and growth.

Keywords

💡Padel

Padel is a fast-growing sport that originated in the 1960s by a Mexican businessman in Acapulco. It combines elements of tennis and squash, played on a smaller enclosed court. The sport is known for its sociability and ease of learning, making it popular in countries like Spain and Argentina. The video discusses the expansion of padel, particularly in the UK, and the challenges and opportunities associated with its growth.

💡Sociable

The term 'sociable' refers to the quality of being friendly and enjoyable in the company of others. In the context of the video, padel is described as a sociable sport because it encourages interaction and fun among players, typically played in doubles, making it an attractive option for those seeking a leisurely and engaging activity.

💡Covid

Covid refers to the COVID-19 pandemic, which has had a significant impact on various aspects of life, including sports and recreational activities. In the video, Covid is mentioned as an inflexion point that accelerated people's desire to socialize and engage in sports like padel, leading to a post-pandemic boom in its popularity.

💡Investors

Investors in the context of the video are individuals or entities that provide financial resources to support the growth and development of padel as a sport. They are interested in the potential returns on their investment as the sport gains popularity, especially in emerging markets like the UK, the US, France, and Germany.

💡Online Video Platform

An online video platform refers to a digital service that hosts and streams video content over the internet. In the video, The Paddle School is an example of such a platform, which was set up to teach people how to play padel and improve their game through instructional videos.

💡Underarm Serve

An underarm serve is a type of serve in padel where the ball is struck with an underarm action, making it technically easier than the overarm serve used in tennis. This serves as an accessible starting point for beginners, allowing them to play and score points from the very first day.

💡White-Collar Workers

White-collar workers are typically employed in non-manual, professional or administrative roles, often in office settings. The video discusses a project in London's Canary Wharf, a major international finance center, aiming to cater to the growing demand for padel among these professional workers.

💡Grassroots Sport

A grassroots sport refers to a sport that is built and developed from the local or community level, often emphasizing participation and growth from the ground up. In the video, the club in London plans to run junior academies to engage children and establish padel as a grassroots sport in the UK.

💡Planning Restrictions

Planning restrictions are regulations and laws that govern the development and use of land and buildings. In the context of the video, these restrictions can pose challenges for padel advocates looking to build new courts or clubs, as they must navigate the complexities of local planning laws.

💡Skaffold

Skaffold is a tool used in the context of building and deploying applications, particularly in the field of software development. It automates the process of creating, building, and deploying containerized applications. While the term 'Skaffold' does not appear in the video script, it could be relevant in the context of discussing the technical aspects of setting up an online platform like The Paddle School.

Highlights

Ground zero for one of the world's fastest-growing sports is in east London, where a Swedish entrepreneur is building the city's biggest padel center.

The entrepreneur started looking for opportunities in 2019 and opened the first club in Bristol after Covid, which is now the largest padel club in the country.

Scaling padel often involves finding suitable clubs and premises, but once established, landowners tend to approach padel clubs proactively.

Opening in well-populated areas with existing padel experience and strong demand can lead to quicker profitability.

Padel was invented in the 1960s by a Mexican businessman as a space-efficient alternative to tennis.

The sport became a hit in Spain and Argentina, and is now gaining popularity globally.

Padel is played in doubles, is sociable, and easy to pick up, using tennis scoring with a glass wall for returning shots, similar to squash.

Investors are focusing on the UK, US, France, and Germany as potential growth markets for padel.

The global value of padel is estimated at around 2 billion euros a year and is forecast to triple in size over the next three years.

Covid acted as an inflection point, increasing interest in social sports like padel.

The Paddle School, an online video platform, was set up to teach people how to play and improve their padel game.

Padel is distinct from tennis and squash, with its own unique gameplay and rules.

The serve in padel is technically easier than in tennis, and beginners can start playing almost immediately.

Professional tours, leagues, and cup competitions are attracting institutional investment, including from high-profile names in sports.

Celebrities and athletes are also interested in padel as a growing game to be involved with and to inspire the next generation.

A project backed by Spotify co-founder Martin Lorentzon in London's Canary Wharf aims to cater to the demand for padel among finance workers.

The entrepreneur's personal experience with padel in London led to the idea of getting involved in the business due to the lack of available courts.

The padel club in London has seen amazing uptake, with prime times booked out every day.

The club plans to introduce junior academies to engage children and build a grassroots sport.

Investors face challenges like space availability and planning restrictions, but the global number of courts is expected to double by the end of 2026.

Transcripts

It may not look like much, but this

is ground zero for one of the world's fastest-growing sports.

Here on the outskirts of east London,

a Swedish entrepreneur is building the city's biggest

centre for the hottest new thing in recreational sport, padel.

So this is going to be the centre court,

and then we'll have another five courts all the way down

to the main entrance over there.

We started looking for opportunities back in 2019.

And then after Covid we got our first club up,

which is Bristol.

The Rocket Padel Bristol is the largest padel club

in the country, holding 14 courts.

It's a very, very nice club.

So we opened up that club.

And now we're focusing a little bit more on London.

So now we're trying to surround London.

It's usually one of the bottlenecks in scaling padel

is to get clubs and premises like this.

But once you have the proper clubs up,

the landowners will find us rather

than us finding them and trying to convince

them to change the use.

I think if you open up in a very well-populated area where

there's lots of experience from padel and a strong demand

already, you could be breaking profits earlier,

whereas when you start in new cities,

that when we open up in Bristol, for example,

people didn't really understand or know about padel.

So it took a couple of extra months

to get them coming, and trying it out, and coming back.

Usually, you should be able to be in the money

from an operational perspective within three to six months.

Padel was invented in the 1960s by a Mexican businessman who

didn't have enough space to build a tennis

court at his house in Acapulco.

Instead, he designed a smaller enclosed court,

which gave rise to a new pursuit,

mixing elements of tennis and squash.

Padel went on to become a huge hit in Spain, Argentina,

and a handful of other places around the world.

Typically played in doubles, padel

has been gaining popularity for being

sociable, but easy to pick up.

It uses tennis scoring but has a glass wall for returning shots,

as in squash.

Now, investors are looking for the next big opportunity,

with the UK, the US, France, and Germany in focus.

Globally, the game is estimated to be

worth around 2 billion euros a year.

But it's forecast to treble in size over the next three years.

Padel is an interesting sport right now.

I think it is growing quite quickly.

The pace of change in terms of padel

and the business model of padel is changing quite quickly.

Obviously, you have Covid as an inflexion point, where people

were working from home, and wanted to socialise, have fun,

compete a little bit.

So that's where a sport like padel

can come into play quite easily.

I think we're at an early stage when

it comes to the growth of padel in the UK, the US,

some of these emerging markets.

I think you're starting to see this post-Covid boom of wanting

to socialise, wanting to exercise

in a way that isn't necessarily just going to the gym anymore.

One of the big challenges for padel advocates

is spreading the word about a sport many have never heard of.

But Sandy and Tom Farquharson saw the potential early on,

and set up The Paddle School, an online video platform

to teach people how to play and how to improve their game.

Understanding the back glass and getting yourself

in a good position to hit is one of the more difficult areas

of padel.

Just a normal flat ball.

So padel is a mixture of tennis and squash.

It's similar scoring to tennis.

But they use different racquets and lower-pressured balls.

So the racquet is smaller.

It's often described as a beach bat.

And therefore, your contact is a lot closer to your hand.

Also, the court is a lot shorter than a tennis court,

for example.

And the more you play, the more you realise that it's quite

a different sport from tennis and squash.

It kind of sits on its own.

Well, the great thing about padel

is that the serve is technically easier than tennis.

So to start with padel it's an underarm serve.

You play the ball cross court.

And that is how simple it is to start the point in padel

And having taught lots and lots of adult tennis

players and adult padel players, it's

amazing that in padel, you can literally start the first day

and play some points.

Whereas in tennis, you would need lessons

in order to be able to serve.

So initially, I started the video content online

really to help my own group of students.

I was in Dubai, I had a small group of students,

and they were asking me the same questions over and over again.

And there was no content in English.

In this video today, we're going to talk

about how to return the ball that comes off

that side glass with slice.

Tip number three is recognise your opponent's serving

technique.

I was really trying to help my students play the game.

But I was starting to see through the analytics

that a lot of the Nordic countries and Sweden

were really taking it up and watching a lot of those videos.

And initially, it was teaching technique, and the rules,

and the basics.

But as the channel improved and grew,

there were more and more questions, and therefore, more

and more titles and topics for me to select really.

It's not just recreational padel that is gaining attention.

Investors have been putting money into professional tours,

leagues, and cup competitions, including

the likes of Qatar Sports Investment,

owner of French football club Paris Saint Germain, Daily Mail

publisher DMG Ventures, and the parent company of the New York

Yankees baseball team.

Big names from the world of sport

are also throwing their weight behind padel.

So when you think about institutional investment that

is looking for those returns on a sport like padel, returns

on their investment, this is a high-growth opportunity

for them.

But there's also the other aspect of it

of individuals that play tennis potentially,

or other celebrities, athletes, that

just want to be involved in a growing game that are looking

at padel as another growth opportunity for them,

for their brand, and also to inspire the next generation.

In London's Canary Wharf, a major international finance

centre, a project backed by Spotify co-founder Martin

Lorentzon is hoping to tap into growing demand to play padel

among white-collar workers.

So we're actually standing on top of 15 metres of scaffold.

The place we're on was supposed to become a skyscraper.

But in a post-pandemic world where there's not

as much as a need of offices, we had the opportunity

to reuse the land to build a padel club.

Me I'm originally from Sweden.

I grew up there.

And I discovered the game four or five years ago.

I played it and... during one of my trips back to...

back home.

And I really fell in love with the game.

But then I had tried to play the game, continued picking it up

here in London.

But there were very few courts.

And booking them was close to impossible.

So that's where the idea came to mind of maybe

I should get involved in this business.

The reaction since we launched has been really, really good.

I was expecting us to get busy, but maybe not this quickly

onwards.

Our prime times after 4pm is pretty much

booked out every single day.

Our weekends are pretty much booked out as well.

But the mornings and afternoons requires

a bit more of a community to fill those hours.

But the uptake has been amazing.

So I think it's one of our responsibilities

as a club in the location where we are to educate people

about padel.

The UK is still a very early emerging market in padel.

And a lot of people don't know what it is.

They've never played it.

So what we do is we do a run of lots of introduction

to padel sessions where people can come

and try it out for one session and learn the basic rules,

and then from there be ready to play a game.

Soon, we will also be running junior academies

to even get the kids involved and build

a bit of a grassroots sport.

Investors looking to ride the padel wave

face a number of challenges.

Space is hard to come by.

Planning restrictions can be tough to navigate.

And the pool of existing players in new markets

like the US and the UK is still relatively small.

But with the number of courts globally expected

to almost double by the end of 2026,

many more people should soon get the chance to pick up a bat

and try their hand at one of the world's fastest-growing sports.