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BNP Paribas Open: Selling Tennis Sand in the Desert

By Rick Horrow and Karla Swatek

March 9, 2012

Anyone watching John Isner battle now-friendly rival Nicolas Mahut can clearly see that size matters – a concept very well understood by community and business leaders in California’s Coachella Valley.  The Valley, and more specifically, Indian Wells, is the longtime site of the biggest tennis tournament in the world outside of the four Majors.

In 2011, the Indian Wells Tennis Garden and surrounds attracted more than 350,000 attendees throughout the two week span of the BNP Paribas Open, a top-tier tournament for both the men’s and women’s pro tours, pumping a record $289 million into the region’s economy, according to a study conducted by The George Washington University.  And with the gradually-improving global economy, tournament directors Steve Simon and Charlie Pasarell are hoping to improve on that number at the event’s 13th iteration in 2012 – “We are looking for, hoping for something like 380,000 maybe this year,” Pasarell told the Los Angeles Times.

Comparatively, the Coachella Valley Music and Arts Annual Festival, better known simply as Coachella, has a paid attendance of about 75,000 and brings $36 million to the region according to estimates by the Coachella Valley Economic Partnership.  (This year, the previously three-day festival is expanding to two consecutive weekends so that number is likely to go up dramatically.)  Headlined by such top bands as The Black Keys, Radiohead, Dr. Dre, and Snoop Dog, Coachella is a magnet for the coveted 18-34 demographic and as such is a big draw for sponsors including State Farm, H&M, Hyundai, Red Bull, Heineken, and Play Station.  Area residents and local businesses, however, vastly prefer the more mature BNP Paribas Open attendees – they are generally much better behaved, and even though both events sell out every hotel room in a 40-mile radius, the tennis fans spend much more on food and beverage, retail, and ancillary entertainment.

Simons’ and Pasarell’s desert mirage, conceived out of a dusty 54-acre patch of land in Indian Wells, became a reality in 2000 in the form of a $77 million, 24-court tennis palace whose central 16,100 seat stadium is the biggest tennis facility in the world outside of New York’s Arthur Ashe.  Thanks to the largess of Oracle Corp. founder and tennis fanatic Larry Ellison, who purchased the tournament for about $100 million three years ago, the event now includes Hawkeye line-calling technology on every court used for competition – a feature not even the sport’s four Majors can boast – and prize money totaling $4,694,969, with the winners of the men’s and women’s singles each earning $1 million.

The two-week BNP Paribas Open is televised almost wall-to-wall by Tennis Channel (with ESPN2 and ABC jumping in the final weekend), and sponsors have been quick to recognize the appeal of aligning with the event.  Besides French financial giant and top sponsor BNP Paribas, Bulova, Corona Extra, Dell, Fila, Head, Coca-Cola, and Enterprise-Rent-a-Car have come on board, along with a strong regional business roster. 

So too has Emirates.  Last month, the airline announced a deal with the USTA to become the title sponsor of the ten events comprising the summer U.S. Open Series and the official airline of the U.S. Open.  The seven-year deal is valued at $90 million.  Emirates has also committed to spend $2.5 million annually on U.S. Open promotion hospitality.  Last year, the Series reached a U.S. viewing audience of 39 million and drew more than 800,000 fans.

Emirates has invested heavily in sports over the last few years, including deals with soccer clubs Arsenal and AC Milan, and domestic tennis events such as the Dubai Duty Free Tennis Championships.  But the U.S. Open deal is the airlines’ most aggressive sports marketing push in the U.S.  It currently offers 59 flights a week through six American cities: New York, Dallas, Houston, Los Angeles, San Francisco, and Seattle, and is likely to expand. (For the moment, however, Palm Springs International Airport isn’t in the mix.)

Local charities benefit from the high-level tennis in Indian Wells as well.  In addition to charitable contributions by tournament owners and sponsors, days before the BNP Paribas Open began, La Quinta Resort and Club hosted the K-Swiss Desert Smash, bringing together Hollywood stars and tennis legends to benefit Variety the Children’s Charity, an organization dedicated to improving the lives of the Coachella Valley’s neediest children.  This year’s event featured Bush front man Gavin Rossdale, actor Christian Slater, and many others.

And what about Ellison?  In the sports world, the Oracle founder is perhaps best known for his $300 million investment in the next Americas Cup sailing extravaganza coming to the San Francisco Bay this September, or for his thwarted bid for the Golden State Warriors two years ago, when despite making a “marginally higher” bid, he lost out to the $450 million gambit of Kleiner, Perkins partner Joe Lacob and Hollywood mogul Peter Guber,  But at age 67, he’s a passionate tennis player and fan – and Ellison continues to insist that his love of the game is what drives his over-the-top support of the BNP Paribas Open, not ROI.  And let’s face it, the man can afford it – according to Bloomberg News’ daily ranking of technology billionaires, Ellison has a firm grip on the No. 2 ranking (behind Microsoft’s Bill Gates), with a net worth in the neighborhood of $37.9 billion.  That buys a lot of tennis balls.

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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
Beyond the Scoreboard: Chapter 1. The Mega-Master Super Series XLXL eBook chapter

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