SBJ/January 24 - 30, 2005/This Weeks Issue
USTA buys a stake in WTA event
Published January 24, 2005
The U.S. Tennis Association has acquired a 25 percent stake in the JPMorgan Chase Open and has an option to buy majority control of the Anschutz Entertainment Group-owned women’s event in Los Angeles.
The USTA declined to disclose terms, but WTA tournaments of this size commonly sell for a few million dollars.
The move gives the USTA a firmer foothold on the West Coast and signals the group is willing to spend its sizable treasury on endeavors other than just pumping money into community tennis programs and into developing pros. It also means that three of the nine U.S. Open Series events, the branded circuit of tournaments leading up to the Open, will be owned in some fashion by the USTA.
The USTA, which owns and operates the U.S. Open, also controls the Mercedes-Benz Cup men’s event in Los Angeles. AEG tried to persuade the Cup to move from UCLA to Anschutz’s new athletic complex in Carson, but was rebuffed.
Despite now having a stake in both Los Angeles tournaments, Kantarian said the USTA will not put pressure on its Southern California section, which directly owns the Cup, to move. There are other options, he said, including rotating the events between the two Los Angeles sites, or simply staging them the same week and having a combined event for TV purposes.
Both tournaments are part of the year-old U.S. Open Series, the branded circuit of summer hardcourt tennis events that lead up to the U.S. Open. The U.S. Open Series was crafted last summer by the USTA.
|U.S. Open||Grand Slam||New York|
|Pilot Pen Tennis||WTA**||New Haven, Conn.|
|U.S. Clay Court Championships||ATP||Houston|
|Mercedes-Benz Cup||ATP**||Los Angeles|
|JPMorgan Chase*||WTA**||Los Angeles|
|* Owns 25 percent, with an option for majority ownership|
|** U.S. Open Series events|
|Source: SportsBusiness Journal research|
Kantarian said the USTA did not buy full control because he wanted to allow the current operator to continue to manage the event. The remainder of the option expires after the 2007 event.
Kantarian also noted that JPMorgan Chase is one of the top sponsors of the U.S. Open.
AEG could not be reached for comment. The company bought the tournament from IMG three years ago and moved it from Manhattan Beach to the new Home Depot Center in Carson, which includes tennis facilities as well as Olympic sport venues.
Two years ago, in the event’s first season there, the commercial results were poor, but last year, the tournament drew more than 50,000 people. The Lindsay Davenport-Serena Williams final is the top-rated non-Grand Slam match ever shown on ESPN2.
While the USTA will not necessarily be looking to buy more tournaments, it is seeking to spend its hefty profits from the U.S. Open to acquire what Kantarian described as tennis-related assets. In 2003 the USTA earned $27 million, and Kantarian has argued internally at the organization that the group should be spending the money in new and innovative ways.