SBJ/March 1 - 7, 1999/No Topic Name

Tennis tourney's makeover has already begun

When the world's top players descend on Indian Wells, Calif., this week for the third-largest tennis tournament in the United States, they may want to take a last look around because changes are on the way.

Much will be new next year at the annual event, one of just three U.S. tournaments in which the men's and women's draws compete side by side. There will be a host of new sponsors, and one of the largest tennis facilities in the world, already under construction, will be ready for action.

Ironically, because of a continuing marketing effort by the men's ATP Tour, the women's tournament failed to attract a title sponsor this year. Similarly, Harmon International, which was a presenting sponsor, will not be back this year with its six-figure contribution. This will also be Newsweek's last year as the sponsor of the men's bracket.

In fact, because of the withdrawal of Harmon and State Farm Insurance Cos., which previously sponsored the women's $1.3 million Evert Cup, the tournament will likely suffer a financial loss this year.

"We'll come close to breaking even; it won't be as good as years in the past," said Charlie Pasarell, the tournament director and co-owner of PM Sports, which is building the new facility in a joint venture with International Management Group.

Indian Wells has already agreed to the ATP Tour marketing effort, which will market pooled television and sponsorship revenues from the Mercedes Super 9 tournaments. That deal begins next year, so Mercedes Super 9 events like Indian Wells are unwinding from sponsorship contracts. As a result, the tournament could offer State Farm and Harmon only one-year deals in 1999, and both declined. Newsweek's contract expires at the end of this year.

"We had to clear the decks," Pasarell explained.

Lipton, whose title sponsorship of the Lipton Championships in Florida expires later this month, was interested in a title sponsorship, but apparently it did not want to sign on just for a year. Indian Wells may seek an umbrella sponsor for both the men's and women's events.

The ATP's marketing firm, ISL Worldwide, will now negotiate with sponsors for Mercedes Super 9 events, guaranteeing a set amount of revenue for each tournament. ISL, however, is still trying to reach an agreement with the ATP for how much the firm will guarantee of the more than $1 billion over 10 years that the men's tennis tour expects from the effort.

In the meantime, Pasarell is busy overseeing construction of the Garden of Champions, the new $70 million facility that will more than triple the daily capacity.

To finance construction, which began late last year, IMG and PM Sports sold a $50 million private bond to TIAA/CREF, a pension fund. The remaining $20 million will come from the partners' equity investment, plus contributions from Riverside, Calif.

The current Indian Wells site rests on 60 acres. The new 160-acre site will include seven stadiums, eight sunken courts, hotels and residential areas. By contrast, the U.S. Open at Flushing Meadows sits on 42 acres.

The Indian Wells tournament attracts 11,000 people a day over the two weeks, with the women's draw starting later this week and the men's next Monday. In the new facility, crowds could reach 40,000 Pasarell predicted, which would put it on par with the U.S. Open.

"Indian Wells will be more of a cornerstone in the circuit," said Ray Benton, co-founder of ProServ Inc. and president of RHB Ventures, which owns half the Nuveen Tour for older men.

Indian Wells trails the Lipton Championships in term of stature among U.S. tournaments, but with the added prestige that the new facility adds, the tournament may be able to draw more sponsorship and TV revenues.

This year, for example, the Lipton will award $4.65 million in prize money, 24 percent more than Indian Wells. Title sponsors generally pay for prize money.

"If it is the sixth-most-important tournament in the world right now [behind the four Grand Slams and Lipton]," Benton concluded, "maybe this puts it in a tie for fifth."

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