Tennis Greats Team to Save Local Tourney
The Desert Sun
March 1, 2006
INDIAN WELLS - Just days before the opening of this year's tournament, a powerful tennis consortium including star players Pete Sampras, Chris Evert and Billie Jean King has bought out the Pacific Life Open ownership partners International Management Group, nearly completing the deal that keeps the international tennis tournament in Indian Wells.
Helping their cause was United States Tennis Association president Franklin Johnson, who expressed interest in having his organization invest in the tournament.
"I think it's a major success story, especially when you think of the downside. Securing it is good news and I'm thrilled," Johnson said. "It was amazingly difficult, much more than I imagined. There were some down times and I worried about it going first to Shanghai and then to Doha, but we had good people working hard to get the right result."
The consortium confirmed the deal, first reported on thedesertsun.com, in a meeting Tuesday with The Desert Sun. The official announcement is scheduled for this morning.
IMG had fielded multimillion-dollar offers to sell the tournament to the cities in China and Qatar. Tourism and city officials across the Coachella Valley, in addition to international tennis tour leaders, voiced strong support for keeping the tournament in the valley and in the United States.
Held in the world's second-largest tennis stadium, the Pacific Life Open is the world's fifth-largest in term of attendance. It draws more than 280,000 people to the Coachella Valley over 12 days, and generates an estimated $140 million economic impact as fans flock to see the top stars in men's and women's tennis.
Deposit down, vote to go
Raymond Moore, the president of PM Sports which owns 50 percent of the tournament and runs the event, said the investment group - which also includes the USTA and was headed by the Tennis Magazine owners - has made a non-refundable deposit to IMG to essentially close out the buyout.
"We've paid IMG a non-refundable deposit. The deal is off the table," Moore said. "It's our deal now. It's contractually committed to us. It is for us to just complete some paperwork and get the final vote by the (city of Indian Wells) on Thursday, the processing of the bank loan documents on Friday. The deal will be done early next week, 100 percent."
Buying out IMG was the first in a complicated chain of events needed to secure the future of the international tennis tournament in the Coachella Valley.
The Indian Wells City Council will vote on Thursday to vote on a land deal, which Moore, his partner Charles Pasarell and Mayor Ed Monarch feel will be approved.
Indian Wells agreed to purchase a 27-acre piece of land from PM Sports for $15 million, on the condition the tournament first buys out IMG.
"If it's what we expect, it will be signed Thursday," Monarch said in a telephone interview Tuesday. "I think the thing that has fascinated me was the steadfastness of Charlie Pasarell and Raymond Moore. They announced from beginning to stay in the desert. Money alone wouldn't sway them. The provided the motivation because we knew how serious they were about this."
The money from the purchase will be used to pay down the $39 million mortgage on the Indian Wells Tennis Garden, the 85-acre complex that houses the tournament. The Pacific Life Open will also refinance its mortgage, thanks to Indian Wells bank Desert Commercial Bank.
Because of the debt service on the mortgage, the tournament has been operating in the red since 2001.
Although Moore and Pasarell could not comment on the buyout price due to a confidentially agreement, some reports had the buyout at $55 million.
Moore recruited George Mackin and Bob Miller, the owners of Tennis Magazine, to help secure a group of investors to buyout IMG.
Buying out IMG will start a chain reaction that will help close out one of the most complicated deals in tennis and secure the future the world's fifth largest tennis tournament, which has an estimated $140 million economic impact on the Coachella Valley.
In a meeting with The Desert Sun on Tuesday, tournament officials revealed only the famed three of the 21 investors who helped buyout IMG.
The others, working Calim Private Equity LLC of Aspen, want to remain silent partners, though Moore said that many were local residents.
With the United States Tennis Association, Tennis Magazine, and the likes of legends like Sampras, King and Evert, the Pacific Life Open has an impressive group of investors.
"What I think what we've assembled here is the most powerful strategic tennis partnership in the game today," Moore said. "We have not only Tennis Magazine, the world's largest tennis magazine, but the USTA and three tennis legends, Chris Evert, Pete Sampras and Billie Jean King, all having invested in the concept of keeping this event here for the next 20 years.
"We think it will be here the next 100, but we'll focus on the next 20 for the time being."
"I've never seen an all-star lineup like this behind an event," said Larry Scott, the CEO and president of the Sony Ericsson WTA Tour in a telephone interview from Florida. "It's a testament to the tournament that so many leaders and legends believe in Charlie and Ray's vision.
Pasarell is a local resident and a former ATP tour player who helped form the current tour and serves on its board. During his career, he set a record for the longest match ever played at Wimbledon.
"I think it's a very positive indicator for the event to have so many important entities and individuals involved," Scott said.
Sampras, who on Tuesday announced that he would being playing in World Team Tennis events after three years in retirement, has a home in Palm Desert. But it was his business relationship with Mackin and Tennis Magazine that got him involved.
"(The tournament) was one of my more favorite stops and I know a lot of players love playing in the desert and it's good to see it's staying in the desert," Sampras said. "Obviously playing the event for 14 or 15 years, I love the two weeks I would spend there. I have a home close to there and I can have a presence at the event now that I'm a very small piece to a big puzzle."
Securing the tournament's future in the Coachella Valley was a months-long process. The city of Indian Wells approved its deals, provided conditions were met, in August.
In October, the USTA agreed to become part of the investment group.
However, the deal couldn't close until Tuesday, leaving several tense moments over the last five months.
"We were skating on thin ice a number of times. Almost every single deadline that was issued was missed," Moore said. "I want to give credit to IMG. (Owner) Ted Forstmann did have the patience to allow us the time to raise the money. He could have, at any single time, pull the plug and he didn't We're grateful. And in addition to that, three key people at IMG, Bob Kain, Gavin Forbes and Stephanie Tolleson."
IMG is one of the nation's largest sports and events marketing firms. Forstmann's bid for RJR Nabisco is famed in the business world.
Let the games begin
With the tournament to start on Monday with women's qualifying, Pasarell said he can relax a little bit.
"We've had a pretty damn difficult time since last year's tournament until now with anxieties," said Pasarell, who took over the tournament in 1981 and set it on its path of tremendous growth to become the fifth most attended tennis tournament in the world. "There were many restless nights. I know I had them and I'm sure Raymond had many more because he was dealing with it on a day-to-day basis. We're very relaxed now and we're going to have a very good tournament this year."
As for the women's tour, they are happy one of their largest tournaments is staying put.
"We're very pleased and it's a great day for professional tennis and tennis in the desert," Scott said. "I also want to go on and say the greatest days of the tournament are ahead of it."