Federer Odds on Winning U.S. Open Buoys Biggest Tennis Tourney

Federer Odds on Winning U.S. Open Buoys Biggest Tennis Tourney

Post by Superdav » Thu, 27 Aug 2009 20:23:10

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Federer Odds on Winning U.S. Open Buoys Biggest Tennis Tourney

By Danielle Rossingh

Aug. 26 (Bloomberg) -- Roger Federer s attempt to win his sixth
straight U.S. Open and record-extending 16th Grand Slam is helping the
event approach the record revenue of last year.

As Federer and Serena Williams return to defend their tennis titles at
the season s final major next week, organizers say they expect to come
close to last year s $200 million sales, even as Wall Street curbs
spending in the worst recession since the Great Depression.

Tennis s four majors, Wimbledon, and the French, Australian and U.S.
opens, are able to withstand bad times because the events can hold the
attention of audiences around the world, said Simon Chadwick, a
professor of sport business strategy and marketing at the U.K. s
Coventry University Business School. The four men s semifinalists at
Wimbledon, for example, all came from different countries.

The Grand Slams are a safe port in a storm, Chadwick, 44, said. It
offers good value for money for commercial partners to justify their
expenditure.

The USTA sold out all of its 84 luxury suites last year at an average
price of $250,000, a $5,000 increase from 2007. This year, it sold the
84th suite in the past week at that same price. JPMorgan Chase & Co.,
the second-biggest U.S. bank, will be entertaining guests in its
hospitality tent during the second week of the U.S. Open only, instead
of the customary two weeks.

Compared to 2008, no doubt, it s going to be a challenging year, but
we are feeling very good about where we are right now on virtually all
revenue fronts, J. Pierce O Neil, chief business officer at the U.S.
Tennis Association, said in an interview. Will we surpass last year?
I doubt it. But we ll come very close.

Federer Is Favorite

Federer is listed as a 6-5 favorite to win by Las Vegas Sports
Consultants, which helps ***s set betting lines. Andy Murray is
second favorite at 3-1, and Rafael Nadal is third at 7-1.

The global financial crisis, which began with the collapse of the U.S.
subprime-lending market in 2007, has led to almost $1.6 trillion of
writedowns and credit losses at banks and other financial
institutions, according to data compiled by Bloomberg.

The U.S. economy has lost about 6.7 million jobs since the recession
started in December 2007, the worst of any slowdown since World War
II. The jobless rate stands at 9.4 percent, the U.S. Labor Department
said on Aug. 7.

It s a challenging market and people are being a lot more thoughtful
about their decisions, O Neil said. They are buying smaller packages
and they are buying later, he added.

Fewer Invites

That s being noticed by the people who are being entertained.

Invitations are very scarce this year, Samer Nsouli, a 42-year-old
chief investment officer at Lyford Group International, a New
York-based hedge fund that oversees $70 million, said in an interview.

Nsouli, who has been going to the Open for a dozen years, is planning
to attend the men s semifinals at the invitation of a Wall Street firm
-- he hasn t decided which one -- and will buy his own tickets during
the Labor Day holiday weekend, which falls in the middle of the
tournament.

The U.S. Open attracted a record 720,227 visitors in 2008. It is
forecasting ticket sales this year to exceed 700,000, but probably
fall short of last year. Anything close to last year will be a good
year, O Neil said. At 700,000 tickets sold, it will be the best
attended of the four majors.

Sponsorship Revenue

U.S. Open sponsorship revenue may drop as much as 3 percent from $55
million last year, according to the USTA. It lost Minneapolis-based
Valspar Corp., a paint maker, as a sponsor. The U.S. Open extended an
agreement with International Business Machines Corp. through 2012,
while financial services companies including Massachusetts Mutual Life
Insurance Co. and JPMorgan also continue to sponsor the event.

The Grand Slams are not in trouble, they are great operations,
Francesco Ricci Bitti, president of the London- based International
Tennis Federation, said in an interview. They are more than tennis
tournaments; they are events, he said.

Tennis Australia, which owns and runs the Australian Open, posted a
revenue increase of 27 percent to A$147.3 million ($123 million) in
the 12 months through June 2009, according to its annual report.

The tournament had strong growth particularly in broadcast, ticketing
and sponsorship revenue, Steve Wood, chief executive officer of
Tennis Australia, said in an e-mail.

Australia Attendance

The year s first Grand Slam event, held in January and February,
attracted 603,160 tennis fans, which was 0.4 percent off record crowds
in 2008.

Australia s economy grew 0.4 percent in the first quarter, rebounding
from its first contraction in eight years in the previous three
months, as lower borrowing costs and government spending stoked
domestic demand. Reserve Bank of Australia Governor Glenn Stevens said
this month the economy probably also grew in the second quarter. Both
the U.S. and the euro region economies shrank in the second quarter.

Total revenue at this year s French Open, held in May and June in
Paris, was 120 million euros ($171.6 million), tournament director
Gilbert Ysern said in an interview at Roland Garros. That s 2.5
percent higher than the prior year.

Just like in 2008, the two-week event sold out all of its 450,000
tickets, according to Ysern. Hospitality sales fell 3 percent from
last year.

Hospitality is the easiest thing to cut when you need to restrict
your budget, Ysern said. Companies make their decisions
year-by-year.

Wimbledon Impressions

At Wimbledon, leaving the wrong impression was a concern, said Ian
Ritchie, chief executive officer of the All England Club, which
organizes the grass-court Grand Slam event in London.

There is a question about how far people can be seen, how far people
want to be sensitive to either their internal or external situations,
Ritchie, 55, said in an interview on Centre Court. I think that s
true of all the events. People are cautious about being publicly
involved.

Sales of corporate hospitality for this year s Wimbledon, held in June
and July, were slightly softer, Ritchie said. He wouldn t be more
specific. The club s seats for corporate hospitality sold out last
year.

Wimbledon Profit

The Wimbledon Championships generated a profit of 25.7 million pounds
($42.4 million) last year, compared with 25 million pounds in 2007.
This year s profit, which will be invested in British tennis, won t be
announced until November. It never publishes total revenue.

Wimbledon boosted ticket sales by 7.4 percent to a record 511,043
after it added 3,500 seats to its daily capacity following a
refurbishment of Centre Court and a new No. 2 Court.

Players are aware of the decline.

Williams, the defending U.S. Open champion, said she wasn t planning
on splashing money around after she took home 850,000 pounds ($1.4
million) for her victory in the final of Wimbledon over her sister
Venus.

I m not a big spender, the champion said in an interview at
Wimbledon. I m going to give my employees bonuses. I ll buy myself an
iPhone.