U.S. Tennis Open: Smashing Win for N.Y. Economy
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The Fiscal Times
September 4, 2010

Earlier this week, third seed Novak Djokovic endured a blistering five-set match in the brutal heat of Arthur Ashe Stadium to advance to the second round of the United States Open. He was grateful not only for his victory, but to all the New Yorkers who year in and year out make this tournament the noisiest and most democratic of the four Grand Slams.

“Most of the comments throughout the whole match were positive my way,” the Serbian said. “They tried to kind of lift me up. I’d just like to thank everybody who was with me, [who] kind of gave me the strength and wings to turn the match around.”

The people of New York, especially denizens of the borough of Queens, are grateful as well that players like Djokovic, Federer and Nadal — and the Williams sisters — make the Billie Jean King National Tennis Center in Flushing Meadows their home for two weeks.

“It brings more money in two weeks than all the home games of the Mets and the Yankees combined in the same period of time,” said Jack Friedman, executive vice president with the Queens Chamber of Commerce. “It’s the one time of year that people get off their planes at JFK and LaGuardia and stay in our borough. Europeans, Asians – people from everywhere – they eat in Queens. They stay in our hotels, spend money in our restaurants.”

The last study in 2001 by the New York City comptroller’s office estimated that the overall economic impact to the metropolitan area to be $419 million. Friedman believes that figure is low, especially since the U.S. Open has been recession-proof in recent years.

Last year, more than more than 721,000 people – the second largest attendance in its history – wandered through the grounds. Business was so good that the United States Tennis Association (USTA), which runs the tournament, added $1 million to the purse to a record $22.6 million. Since 1994, the USTA/U.S. Open annual revenues have more than doubled, to over $255 million in 2009.

The championship itself accounts for 85 percent of the USTA’s budget; the rest comes from membership fees. Last year, gold-plated sponsors such as American Express, IBM, Mercedes Benz and Polo Ralph Lauren coughed up more than $60 million to be associated with the tournament. Another $80 million comes from ticket sales, with broadcast fees and concessions that sell everything from Maine lobster rolls ($17.50) to hot dogs ($4.75) making up the difference.

Also, foreign athletes generally must pay U.S. income tax on their U.S.-sourced income. “That includes compensation for performances, endorsements, the sale of merchandise, and royalty, or other, income closely related to the event. These taxpayers are generally subject to special withholding rules,” says the IRS, although different treaties and tax laws in individual countries can dictate the terms.

A Sport’s Matchless Appeal
Last year, over 33,000 hours of U.S. Open television coverage were broadcast in over 180 countries around the globe. In 2008, ESPN paid $140 million for the American rights, and then sub-licensed 60 of its 160 hours to its cable partner, the Tennis Channel.

Tennis thrives internationally, but the U.S. Open has helped bring the everyman and everywoman to what most in America still consider a country club sport. This perhaps is changing as companies will spend $600 million sponsoring amateur and professional tennis tournaments in 2010, according to the IEG Sponsorship Report. Among the biggest is the one that shows the sport’s international appeal: the Mexican beer brand Corona Extra signed a five-and-a-half-year deal worth $70 million with the ATP World Tour.

With prosperity, U.S. tennis fans are hoping for more homegrown champions. Andy Roddick, who lost in the second round this year, was the last American to win the men’s singles title, in 2003. Serena Williams, who is out with an injury this year, is the only American to win the women’s singles championship in the past seven years (in 2008). Friedman of the Queens Chamber of Commerce, patriotic as the next guy, would love to see Americans holding the hardware at the end of two weeks. But he remains overjoyed with his borough’s status in the tennis universe: “We host a worldwide event right here in Queens. It’s a wonderful, crazy time of the year for us.”