Why does such a world-class event need a rescue?
Leighton Ginn
The Desert Sun
August 7, 2005
A look at frequently asked questions about the Pacific Life Open, the world's fifth-largest tennis event in terms of attendance.
What is the tournament's financial trouble? Despite record attendance and growing revenues, the Pacific Life Open has been losing money since the 2002 event because of the debt service on the $39 million that remains on the mortgage on the Indian Wells Tennis Garden. The tournament cannot refinance the mortgage on its own and needs help from the city of Indian Wells.
Why is the tournament considering a move to China? The tournament has an offer from Shanghai, China, to move the tournament. PM Sports, a sports management company owned by local residents Charlie Pasarell and Raymond Moore, wants to keep the tournament in Indian Wells. PS Sports owns 50 percent of the tournament. IMG, the Cleveland-based sports and cultural event powerhouse, which owns the other 50 percent of the tournament, wants to get out of the tournament and wanted to take the deal in Shanghai. However, IMG has agreed to a $24 million buyout. PM Sports is putting together a syndicate to buy out IMG.
What is the offer from Shanghai? In April, Moore said it was somewhere between $35 million and $70 million.
What does the tournament need from the city? The tournament is looking to refinance its loan from its current 8 percent interest rate down to 6 percent or lower. They need the city's strong financial position to back the loan.
Why doesn't PM Sports just take the offer and walk away from a money-losing tournament? Because Pasarell has always dreamed his tournament can be the Grand Slam of the West. Even though the tournament is fifth in the world as far as attendance, Moore and Pasarell believe it can grow even more. Moore also said that the tournament is also their legacy, and Indian Wells is their home.
Why does IMG want out now? The international sports and lifestyle marketing and management firm was bought by Ted Forstmann, who founded Forstmann, Little and Co. Forstmann is considered a pioneer of the leveraged buyouts and may be trimming the roster of less profitable entities.
Who is in the syndicate? The Tennis Company, which is owned by George Mackin and Robert Miller, who are also owners in Tennis Magazine. Mackin is also the managing director of Custom Marketing Group, an integrated destination marketing company specializing in travel and tourism. Miller is president and CEO of Miller Publishing Group LLC (MPG), which owns such publications as Vibe and Spin.
Is the buyout of IMG a done deal? No. The Tennis Company is looking for the White Plains, N.Y.-based United States Tennis Association, the governing body for tennis in this country, to give financial help. Mackin said if the USTA won't help, they're out. Then the tournament would have no choice but to move.
Will the USTA help? Franklin Johnson, the president of the USTA, has been a vocal supporter of using a portion of the organizations' $150 million portfolio to invest. However, it will have to go up for a vote before the board, which meets in October in San Antonio.
How the tourney's problems start? In 2001, ISL, a Swiss marketing firm, went bankrupt. ISL had a 10-year, $1.2 billion deal with the ATP that ended after the second year. That cost the Pacific Life Open approximately $10 million to $12 million a year for eight more years. The tournament was left without sponsors, and crippled even more by the Sept. 11 terrorist attacks. The tournament was able to secure Pacific Life as the title sponsor, and rebuild its clientele, but has not been able to secure the kind of funding the ISL deal promised.
Is there proof the tournament can grow? In its final year at the old stadium, Hyatt Grand Champions, the tournament attracted more than 150,000 fans for 11 days. This year's record attendance was more than 280,000 fans over 12 days.
Why did they move from the Hyatt Grand Champions? Pasarell had said it had outgrown the Hyatt Grand Champions, where limited parking and restroom facilities became a growing concern. The main stadium seated 11,500.
How big is the Indian Wells Tennis Garden? The 85-acre facility houses the world's second-largest tennis stadium with a capacity of 16,100 - about 2,000 seats less than the Hollywood Bowl. The largest tennis stadium is Arthur Ashe Stadium at the U.S. Open, in Flushing, Queens, N.Y., which seats 23,226. The Indian Wells facility also features two outside stadium courts with capacities of 7,000 and 4,000, and 11 sunken courts with seating ranging from 400 to 1,500. There are also six practice courts.
Why is the tournament a big deal? It is one of only six tennis tournaments that have men and women playing concurrently, with a 96-player singles draw for men and women. Last year it drew more than 280,000 during the 12-day event, ranking their attendance numbers behind the four Grand Slams (Australian Open, French Open, Wimbledon and U.S. Open).
Why doesn't the stadium host more events, like concerts? Concerts are risky and PM Sports cannot not afford to take the financial risk. However, Moore said they have been looking into a fall concert series. If the tax increase on admissions in Indian Wells passes the ballot in November, it would apply to any concert tickets sold as well.
Leighton Ginn
The Desert Sun
August 7, 2005
A look at frequently asked questions about the Pacific Life Open, the world's fifth-largest tennis event in terms of attendance.
What is the tournament's financial trouble? Despite record attendance and growing revenues, the Pacific Life Open has been losing money since the 2002 event because of the debt service on the $39 million that remains on the mortgage on the Indian Wells Tennis Garden. The tournament cannot refinance the mortgage on its own and needs help from the city of Indian Wells.
Why is the tournament considering a move to China? The tournament has an offer from Shanghai, China, to move the tournament. PM Sports, a sports management company owned by local residents Charlie Pasarell and Raymond Moore, wants to keep the tournament in Indian Wells. PS Sports owns 50 percent of the tournament. IMG, the Cleveland-based sports and cultural event powerhouse, which owns the other 50 percent of the tournament, wants to get out of the tournament and wanted to take the deal in Shanghai. However, IMG has agreed to a $24 million buyout. PM Sports is putting together a syndicate to buy out IMG.
What is the offer from Shanghai? In April, Moore said it was somewhere between $35 million and $70 million.
What does the tournament need from the city? The tournament is looking to refinance its loan from its current 8 percent interest rate down to 6 percent or lower. They need the city's strong financial position to back the loan.
Why doesn't PM Sports just take the offer and walk away from a money-losing tournament? Because Pasarell has always dreamed his tournament can be the Grand Slam of the West. Even though the tournament is fifth in the world as far as attendance, Moore and Pasarell believe it can grow even more. Moore also said that the tournament is also their legacy, and Indian Wells is their home.
Why does IMG want out now? The international sports and lifestyle marketing and management firm was bought by Ted Forstmann, who founded Forstmann, Little and Co. Forstmann is considered a pioneer of the leveraged buyouts and may be trimming the roster of less profitable entities.
Who is in the syndicate? The Tennis Company, which is owned by George Mackin and Robert Miller, who are also owners in Tennis Magazine. Mackin is also the managing director of Custom Marketing Group, an integrated destination marketing company specializing in travel and tourism. Miller is president and CEO of Miller Publishing Group LLC (MPG), which owns such publications as Vibe and Spin.
Is the buyout of IMG a done deal? No. The Tennis Company is looking for the White Plains, N.Y.-based United States Tennis Association, the governing body for tennis in this country, to give financial help. Mackin said if the USTA won't help, they're out. Then the tournament would have no choice but to move.
Will the USTA help? Franklin Johnson, the president of the USTA, has been a vocal supporter of using a portion of the organizations' $150 million portfolio to invest. However, it will have to go up for a vote before the board, which meets in October in San Antonio.
How the tourney's problems start? In 2001, ISL, a Swiss marketing firm, went bankrupt. ISL had a 10-year, $1.2 billion deal with the ATP that ended after the second year. That cost the Pacific Life Open approximately $10 million to $12 million a year for eight more years. The tournament was left without sponsors, and crippled even more by the Sept. 11 terrorist attacks. The tournament was able to secure Pacific Life as the title sponsor, and rebuild its clientele, but has not been able to secure the kind of funding the ISL deal promised.
Is there proof the tournament can grow? In its final year at the old stadium, Hyatt Grand Champions, the tournament attracted more than 150,000 fans for 11 days. This year's record attendance was more than 280,000 fans over 12 days.
Why did they move from the Hyatt Grand Champions? Pasarell had said it had outgrown the Hyatt Grand Champions, where limited parking and restroom facilities became a growing concern. The main stadium seated 11,500.
How big is the Indian Wells Tennis Garden? The 85-acre facility houses the world's second-largest tennis stadium with a capacity of 16,100 - about 2,000 seats less than the Hollywood Bowl. The largest tennis stadium is Arthur Ashe Stadium at the U.S. Open, in Flushing, Queens, N.Y., which seats 23,226. The Indian Wells facility also features two outside stadium courts with capacities of 7,000 and 4,000, and 11 sunken courts with seating ranging from 400 to 1,500. There are also six practice courts.
Why is the tournament a big deal? It is one of only six tennis tournaments that have men and women playing concurrently, with a 96-player singles draw for men and women. Last year it drew more than 280,000 during the 12-day event, ranking their attendance numbers behind the four Grand Slams (Australian Open, French Open, Wimbledon and U.S. Open).
Why doesn't the stadium host more events, like concerts? Concerts are risky and PM Sports cannot not afford to take the financial risk. However, Moore said they have been looking into a fall concert series. If the tax increase on admissions in Indian Wells passes the ballot in November, it would apply to any concert tickets sold as well.
