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U.S. Open to Commence at the “Reimagined” Billie Jean King National Tennis Center
The 50th edition of the U.S. Open will kick off later this morning at the “reimagined” Billy Jean King National Tennis Center (BJK NTC). The facility recently underwent a 5-year $600 million renovation (fully financed by the USTA) to expand capacity and rebuild Louis Armstrong Stadium. JohnWallStreet had a chance to connect with Danny Zausner, COO of the USTA BJK NTC to discuss the U.S. Open’s mission, why the BJK NTC doesn’t have a naming rights sponsor and the difference between an “expansion” and “reimagination”.
JWS: The All England Lawn Tennis and Croquet (AELTAC) Club has chosen tradition over profits, turning down sponsorship opportunities to maintain its “clean court philosophy”. What is the U.S. Open’s mission?
Danny: The models between Wimbledon and U.S. Open are very different. Our model is much more like the Australian Open and French Open, because those events are owned and operated by their respective federations. In the case of Wimbledon, they’re a private club; more like The Masters. In our case, we’re the United States national governing body and our sole mission is to grow the sport in this country; we use the funds generated by the U.S. Open to fund that mission. In the case of AELTAC, they use the revenue generated to fund the Club and then they can donate whatever they’d like to the tennis federation.
JWS: So, then how come the Billie Jean King National Tennis Center and Arthur Ashe Stadium don’t have naming rights sponsors?
Danny: We always look for the balance. The USTA determined that it was more important to honor individuals who meant so much to the sport. From a sponsorship model, this is not Fenway Park; there are not hundreds of sponsors with signs all over the place. We’re more about quality over quantity. Many of our partners have been with us for 20-30+ years, we have some who been here for 40+ years.
JWS: The organization put $600 million into this project but has dubbed it a “strategic transformation”, not an expansion. What’s the difference?
Danny: We are in a public park in NYC and there’s not a lot of opportunity for land expansion. Whether you need .5 acre or 10 acres, it’s the same approval process and it’s not easy; public parks are precious commodities. So, this project was really about how to reimagine the 42 acres that we had, how to make better usage of the land; it had to be vertical (added 12,000 seats). It was about transforming what we had here (retractable roof on Louis Armstrong now enables night sessions), as opposed to what the USTA was able to do in ’97 when they went from 20 acres to 40 acres; that was an expansion.
Howie Long-Short: J.P. Morgan Chase, American Express, Mercedes Benz, Emirates Airlines, Tiffany and IBM are long-time sponsors, but Rolex is on board for the 1st time in 2018. Did you know the Swiss watch manufacturer (worth an estimated $8 billion) is owned and operated by a private trust (Hans Wilsdorf Foundation)? Upon the death of his wife (in ’44), Hans Wilsdorf (co-founder) assigned all outstanding shares of the company to the trust ensuring a portion of future profits would go to charity. The Foundation, which has been in control of the company since his death in 1960, operates as a charity and does not pay corporate income taxes.
Fan: I’m going to check out some first-round action later today. Now that the “reimagination” is complete, what is the first thing fans should take notice of?
Danny: Well, the first thing you must notice is the new Louis Armstrong Stadium. It’s our new 14,000 seat, retractable roof tennis stadium; it’s our #2 court. You can’t miss it, it’s spectacular. Gorgeous glass frontage, with our retail partners from Polo, Adidas, U.S. Open Collection and Wilson. It has 2 concourse levels of seating, with all the fan amenities missing in the old stadium.
Editor Note: I’ll be attending the day session. The plan is to catch American John Isner (11) at 12:15 on the Grandstand. If you’re going to be out there and would like to say hello, please reach out via Twitter (@HowieLongShort) or email (JWS@JohnWallStreet.com).
Knicks Gaming Claims 2K League Title, League to Expand for Sophomore Season
The NBA 2K League completed its inaugural season on Saturday with the 8th seed Knicks Gaming defeating the 6th seed HEAT Check Gaming 2-0 (69-66, 74-71). More than 68,000 concurrent viewers (at peak) tuned in for the finals. The league’s sophomore season will see the addition of 4 new teams (21 total) as the Los Angeles Lakers, Minnesota Timberwolves, Brooklyn Nets and Atlanta Hawks have committed to fielding gaming franchises; just 9 NBA clubs remain without a 2K affiliate. L.A., Minnesota, Brooklyn and Atlanta will pay the same $750,000 expansion fee (covers 3 seasons) that the founding franchises did, though they will bear the costs associated with the creation of their gaming team’s brand; the league covered that expense for the first 17 franchises. While the NBA 2K League’s competition committee has yet to decide the number of players that each existing franchise will get to protect, there will be an expansion draft on September 28th; there will also be another tryout, combine and ultimately a rookie draft to fill out team rosters.
Howie Long-Short: Since July 13, the league has averaged 10,500 concurrent viewers per broadcast. While that figure represents significant growth from the league’s debut in May, several owners have indicated they were disappointed that viewership/engagement figures led to underwhelming league sponsorship/partnership sales during the debut season.
Shares of 2K publisher Take-Two Interactive Software (TTWO) hit an all-time high ($134.63) following posting of company’s Q1 earnings report in early August. The stock rose +9% on news that “better than expected recurrent consumer spending on Grand Theft Auto Online and NBA 2K18 (perhaps boosted by the league’s presence), as well as robust ongoing demand for Grand Theft Auto V” drove net bookings +11.5% YoY (to $288.3 million) and net income +19 YoY (to $71.7 million). Don’t expect sales to come to a halt anytime soon either, the company is releasing the much-hyped Red Dead Redemption 2 in October. Samantha Greenberg of Margate Capital Management recently called the company’s content pipeline “the largest in company history.” Shares are +22% YTD, opening at $134.01 later this morning.
Fan Marino: Take Two Interactive reported that it sold more than 20 million copies of NBA 2K18, a record for the +/- 20 old gaming franchise (debuted in ’99); the company’s highest-selling sports title of all-time. The 2019 edition of the game (NBA 2K19) will be released on September 11th.
Knicks Gaming finished 14th in the regular season standings. The team only qualified for the postseason because it won The Ticket tournament (winner became auto-qualifier) as the 15th seed.
What is JohnWallStreet?
JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLF, ELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA). If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.