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Some of the loss was attributed to the extensive renovation of the National Tennis Center.
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The U.S. Tennis Association and its National Tennis Center lost more than $23 million last year, after years of surpluses funded by the lucrative U.S. Open.
It’s a marked contrast from 2015, when the two entities reported a combined $19.8 million gain.
The figures, which were included in recently filed tax returns, showed that some of the loss is tied to depreciation connected to the $600 million renovation of the New York tennis center. But travel, compensation, investment in digital and other items also drove up costs, while revenue was flat.
“The whole approach has been a planned approach. We are not surprised the numbers are what they are,” USTA spokesman Chris Widmaier said. “We are positioned for growth for the next 50 years.”
The USTA is close to completing a renovation of the USTA Billie Jean King National Tennis Center, as well as major renewal of its top sponsorship with JPMorgan Chase. The renovation caused rising depreciation and amortization charges at the NTC, to the tune of $49 million last year, while the prior year it was $28.6 million, according to the tax returns.
Other factors play a role, too. USTA compensation costs rose to $47 million, up from $43.7 million, while travel costs were $14.2 million, a sharp 54 percent rise from 2015. Widmaier ascribed the rise in part to travel to Orlando for the construction phase of the group’s national training center and campus at Lake Nona, which opened earlier this year.
Another cost increase was tennis event productions, by 25 percent to $11 million. These costs are tied to non-Open tennis events, like Davis Cup and Fed Cup.
And the rising costs were not offset by rising revenue. In fact, at the USTA revenue dipped to $260 million from $265 million, while expenses rose more than $21 million. Many of the proceeds of the U.S. Open go to the 17 USTA regional sections, which promote grassroots tennis.
Despite the overall annual loss, the USTA and its NTC, which files a separate return, are hardly in dire straits. Combined assets were more than $1 billion, and net assets — assets minus liabilities — were at $355 million.
The renovation project has put a roof on the main stadium and has seen the No. 2 venue torn down to be replaced next year with a new 15,000-seat, retractable-roof stadium.
To pay for the renovation, the USTA borrowed and relied on existing revenue, and did not require fans to buy seat licenses. Executive Director Gordon Smith long said the group would not build on the backs of its fans.
In 2017, the USTA raised prices on premium tickets while cutting prices on seats further from the court. A resulting increase in revenue could move the organizing body and the NTC combined back toward the black.
