The owners are still in the red but everything looks to be on the upswing. Good news for US tennis fans
Numbers are up for 2005 Pacific Life
the Desert Sun
March 21, 2005
INDIAN WELLS - During the annual "Breakfast with Charlie," Charlie Pasarell and Raymond Moore again reiterated their goal of the Pacific Life Open remaining in the Coachella Valley for several years to come, and are getting positive feedback for help in refinancing their debts.
"Charlie's and my goal is to be here for the next 30 years," Moore said. "We're going to do everything we can to do that. You can print that in big, bold headlines. That's what we want to do. Events may overtake us and stop us from doing that, but we don't think so."
With 14,247 fans attending Sunday's men's final, the total attendance for this year's tournament was a record 280,653. The previous record was 267,834, set last year.
Moore also points out it is not an inflated figure because the tournament pays an admission tax on each ticket sold.
But the business of running the Pacific Life Open is good.
"As of this morning, Charlie and I reviewed the figures. Every single line - revenue is up, increased spectators from last year, increased revenues, increased profitability - Every single line item is up," Moore said.
However, the debt on the stadium is $40 million with an 8 percent interest rate. Moore and Pasarell have openly said they are trying to refinance their loan. As successful as the tournament is, it's not enough for the tournament to refinance on their own.
"What I've learned - I've got a financial education the last two years - is banks, if they're going to give you a mortgage, they want to see two times earnings. If our mortgage is $100, they want to see us have a net profit, after tax, of $200. Unfortunately, we haven't met that criteria yet," Moore said. "I think we will within the next two to three years. I think we'd be able in the next two to three years pursue traditional financing. But it's very difficult."
The tournament is in talks with the City of Indian Wells about a bond to help refinance their loan. USTA president Franklin Johnson told the Los Angeles Times they would be interested in offering financial help as well.
"We are having discussions with them," Pasarell said. "They're obviously concerned. They'd like to figure out a way how to help us."
According to a study by George Washington University in 2000, the Pacific Life Open has an economic impact of $100 million annually for the Coachella Valley. Moore and Pasarell were asked if they would pursue financing through the Coachella Valley Association of Governments.
"We would love to have that," Moore said. "The problem in this valley, it's a small valley, but you've got nine different cities. They're very competitive with each other. In fact, the only time that I've known in history that the nine cities have got together and issued a proclamation is when we built this.
"It's very hard to go to Palm Desert, the next city, which is a very wealthy city, and ask them to participate in some way here when the name of the center is the Indian Wells Tennis Garden."
However, the Pacific Life Open has continued to endure rumors the tournament is in trouble, or that it might be sold. One thing helping to fuel the rumors is the fact the Indian Wells Tennis Garden, the 64-acre facility that houses the 16,100-seat main stadium, is hardly used outside the tournament.
Moore and Pasarell said after the 2001 collapse of the ISL deal, which was to guarantee the tournament $11 million a year over 10 years, they had to rein in their operations and could not take on added events like concerts. Things were further complicated with the 9-11 terrorist attacks.
"We ran the 2002 tournament with little to no sponsorship," Moore said. "We sat around with IMG, and we said, 'We have got to stick to our knitting. We've got to do what we know we can do to make this tournament a success.' Once we've done that, we can broaden our horizons."
"We had a very tough 2003. We had a huge turnaround in results from a big loss in 2002 because of no sponsorship, 2003, we just got into the black, 2004, better again. And now this year, we're going to more than double our profitability from last year. The graph is going in the right direction."
Moore admits the facility is a "heavily under-utilized asset here."
He said there are plans to present a concert series in the Tennis Garden, where they would have five to eight contracts. Moore said they're in negotiations with a "huge name" to kick off the series in October.
Another thing that might help the tournament is the sale of 65 acres of land surrounding the Tennis Garden. Escrow on the sale is expected to close Dec. 1.
The new owners have talked about building a shopping and entertainment center similar to another development in the Coachella Valley.
Moore said he thinks the project could be completed in three years. A hotel is also in the works, which Moore said will probably take longer.
"What Charlie and I said years and years and years ago, nobody believed us, is that this Indian Wells Tennis Garden is the center of the Coachella Valley," Moore said
"We've now been proven correct because the two busiest intersections, done by the county traffic studies, the busiest intersection in the desert is Fred Waring and Washington and the second busiest is Washington and Highway 111. We're right between those two. It makes sense. It makes sense from a commercial point of view to have the facility."
SOME SPORTS ILLUSTRATED
The Desert Sun
Last year, the Pacific Life Open set a record for attendance with more than 267,000 fans coming through the gate. So when Ray Moore, the president of PM Sports - which owns and runs the event - got his Sports Illustrated the next two weeks, he was surprised not to see a mention of their tournament.
"I took those two issues and I analyzed them," Moore said. "They had three pages on college wrestling. Nothing against college wrestling, but it's not really the huge sport."
Moore points out that the Pacific Life Open is one of the largest sporting events in Southern California and said no golf tournament draws 300,000 fans, yet they received no mention in the magazine.
"I'm saying, 'what are we doing wrong?'" Moore said. "I suggested tactfully - I have a copy of the letter - that they change the title of the magazine to 'Some Sports Illustrated.'"
Rooting interest: Moore said things couldn't have been scripted any better for the tournament than to have the No. 1 and No. 2 players, Roger Federer and Lleyton Hewitt, play in the men's final. Well, one thing could have topped that: American Andy Roddick in the final.
"An American in the final, I think maybe our TV ratings might be better today," Moore said.
Attendance numbers: The Pacific Life Open set a new attendance record with 280,653 fans over the 12-day, 20 session tournament from March 9 through Sunday. The previous record was 267,834.
This was also the first year the tournament had sold over 30,000 tickets for a single day, with 31,946 purchased March 12 and 30,582 March 13 for combined day and night sessions. On March 12, the tournament attracted 19,055 for the day session, also a record. Capacity for the Indian Wells Tennis Garden is approximately 25,000 and the main stadium seats 16,100.
Additionally, there were 5,000 more cars parked on site; food and beverage sales were up 23 percent, and retail sales were up 15 percent.
Indian Wells' Future Seems to Be on Upswing
by Bill Dwyre, LA Times Staff Writer
As it turns out, just three years ago, this highly rated tennis tournament was a lot like Lleyton Hewitt against Roger Federer Sunday. It was trailing badly, down a set and a couple of breaks, and desperately trying to figure a way out.
Although the final results are probably several years off, there is enough evidence to say now that, unlike Hewitt, there is a decent chance for a comeback and a happy ending for the Pacific Life Open
It has been a strange two weeks at the Indian Wells Tennis Garden. There has been great tennis, bigger crowds, more general buzz about everything going on, and a dark cloud of financial uncertainty hovering overhead.
Nineteen years ago, a tennis visionary named Charlie Pasarell, once co-No. 1 with Arthur Ashe on the UCLA tennis team, partnered with another former player named Raymond Moore and had key management team members Steve Simon and Dee Dee Felich. They produced a wonderful tournament with a nice, 10,000-seat stadium on the grounds of a plush Hyatt Hotel. The players loved it, the fans loved it, the media loved it.
And Pasarell wanted more.
So, in 2000, a couple of clicks down the street to the east, Pasarell and Co. opened a new place, a 16,100-seat stadium that was so well done and so ambitious that everybody who came and saw were conquered. In those days, there were a few raised eyebrows about how they could pay for this $74-million Desert Taj Mahal, but little public airing of that concern.
But early in this year's tournament, the rumors became loud enough to warrant questions, and the questions led to newspaper stories, and the stories led to the dark clouds. Sunday, at their annual breakfast chat with the media on the morning of the men's final, Pasarell and Moore elaborated on the dark clouds.
Their marketing deal with the international firm ISL, the basis for building the bigger stadium and paying for it, left them with thin wallets when it fell through in June 2001. An annual $11 million for 10 years went away overnight. Then, two planes took down the World Trade Center on Sept. 11, and American business — sponsors, marketing people, bankers, speculators, investors — became turtles.
"We ran the tournament with little or no sponsorship in 2002," Moore said. "First time in 23 years."
At that point, the prize money for this combined men's and women's event, a bill usually footed by the sponsors, had topped $5 million. Since it is virtually impossible to cover that nut with revenue from tickets and hot dogs, the financial spiral had begun.
They got hammered on the bottom line in '02 and barely crossed into the black in '03, not including debt service. All this time, they put on happy faces, paid down the huge construction debt as best they could and, to keep things going, took on a very unfavorable 8% loan. Interest on that alone costs them around $3.4 million a year.
Now, with bigger crowds sparking increasing revenue, plus more sponsors and some TV rights money from international distributors, Moore and Pasarell said they should soon be in good enough shape to make banks willing to redo that 8% loan. Last year's record attendance of 267,834 was topped again with this year's of 280,653.
"The graph is going in the right direction," Moore said.
There is every reason to take this group at its word. Its emphasis has always been on running a great event, not lining its pockets, a rarity in sports these days.
But the red flag is up now, and caution is fair and reasonable.
Tennis is a tough way to have a successful bottom line. It is a niche sport, with almost no Joe Six Pack clientele. Its core fans are loyal, and, in the big picture, minuscule in numbers. Its TV ratings are tiny, partly because Joe Six Pack really doesn't care and has 125 other sports choices on his remote control.
Media outlets base coverage judgments on that, and it's often hard for those in the forest to see the trees.
Moore blasted Sports Illustrated for ignoring his event, saying it ought to rename itself Some Sports Illustrated.
An event like this can be hit by heat (last year), wind (this year) and rain (any year). It can have its anticipation balloon deflated as quickly as a Venus Williams sore knee or an Andre Agassi sore toe.
It can get its star players into the spotlight at the times and places it wants and have them stink out the place (see Maria Sharapova, 0-6, 0-6) or be so dominating they are boring (see Federer, almost any match).
But if this sport can make it huge anywhere beyond the license-to-print-money Grand Slams, it should be here, in the wealthy-demographics desert, in a still-sparkling-new stadium, with a fan buzz getting louder every year, led by Pasarell and Moore, who say they want to be doing this same thing 30 years from now.
Matter of fact, if you see somebody rally from way behind this year to beat Federer, think of it as an omen.