The BNP Paribas Open tennis tournament in Indian Wells, California, says its corporate hospitality sales are slumping as the economic crisis cuts into fans’ spending power.
Revenue from private stadium suites, boxes and hospitality areas is down “10 to 15 percent” from last year, tournament director Steve Simon said in an interview. “People are not feeling comfortable throwing big parties right now.”
Tennis and sports including Major League Baseball, Formula One, soccer and golf are struggling to keep sponsors and find new ones during the economic crisis. Indian Wells, America’s biggest tennis event after the U.S. Open, last July parted with previous title sponsor Pacific Life to find an international backer. It signed a new five-year deal with BNP Paribas SA, France’s biggest bank, in December.
Top-ranked Rafael Nadal, No. 2 Roger Federer and former Wimbledon champion Maria Sharapova all played in this year’s competition, which ends March 22.
Finding a new title sponsor for the tournament had been difficult, Simon said. Organizers had been prepared to run the event without one for a year.
“We’ve been here 34 years,” Simon said. “This isn’t the first economic downturn we’ve seen and it won’t be the last, although I think this is one of the more severe ones we’ve ever experienced.”
‘A Win’
Simon wouldn’t disclose how much BNP Paribas contributed to the annual budget of $30 million. The bank has been involved in tennis since 1973 and also sponsors the Davis Cup, the Fed Cup and the French Open.
The two-week tournament last year had a record 331,000 visitors, making it the most-attended event outside of the Grand Slams. Ticket sales this year are “tracking even compared to last year, which in this economy we feel is a win,” Simon said.
Fans visiting the Indian Wells Tennis Garden, which overlooks the snow-capped Santa Rosa Mountains in the Californian desert 120 miles from Los Angeles, may cut spending on retail, food and refreshments because of the economic crisis, Simon said.
“People will be conservative with their money,” Simon said. “Instead of buying the hat and t-shirt, they’ll just buy the hat.”
The tournament increased its prize money by $3.2 million to $9 million this year after the women’s WTA Sony Ericsson Tour made Indian Wells a mandatory event. The event for the first time in its 20-year combined history will offer equal prize money to both men and women.
The WTA and the men’s ATP World Tour agreed to the increase a year ago, Simon said. In January, prompted by the economic crisis, the ATP said it would give some financial relief to tournaments. The payment, which will come from ATP resources later in the year, will not affect prize money levels, spokesman Graeme Agars said in a March 10 e-mail.
“Obviously, it’s not enough, but at least it was an acknowledgment that things are tough,” Simon said. “Something needs to be looked at.”
(Source: Bloomberg)
