Matches go on without title sponsor

With the world’s economy in shambles, there are a few things missing at UCLA this summer.

Professors and staff alike have been hit with mandatory unpaid days off.

Nearby Westwood Village has seen a decline in business.

Perhaps most notably, the tennis tournament that has been hosted at UCLA for the last quarter-century is going on without a title sponsor this year.

In its 83rd year, the Southern California Tennis Association’s tournament, which is now called the LA Tennis Open, has no corporate affiliation.

From Countrywide Classic to LATO

Organizers have been unable to find a title sponsor since Countrywide Financial Corp.’s contract to sponsor the tournament ended at the end of 2008.

Countrywide was a major home loan organization involved in the federal bailouts. After acquiring Countrywide in July 2008, Bank of America, seeing the stigma surrounding the name, dropped the Countrywide label from its home loans division.

In the midst of a global financial crisis, tournament director Bob Kramer said that the LATO has been having a hard time finding sponsors.

“Instead of laying off people, the companies are laying off sponsorships,” Kramer said.

Most recently, Farmers Insurance committed to being the tournament’s presenting sponsor, making it the LA Tennis Open Presented by Farmers Insurance.

Without a title sponsor and fewer sponsors overall, the Los Angeles Tennis Open will be getting about half as much sponsorship money, leaving things hugely in the red for 2009.

“I think the economy is tough right now and fund-raising is so off … that the bottom line is something we just have to weather the storm,” Kramer said. “There are really not too many gimmicks and things to make up for it.”

Patrick Rishe, associate professor of economics at Webster University and visiting economics instructor at UCLA, said that lower sponsorship in this economic climate comes as no surprise. Rishe is also the director of Sportsimpacts, a consulting firm that assists sporting events and tournaments in economic impact research.

“Some companies are reducing sports sponsorships because they feel internal pressures from employees who complain that the money spent on sponsorships could be used to keep jobs afloat,” Rishe said in an e-mail. “And then there are a small group of companies, (such as those in the) banking and auto industry, that feel external pressure as well to pull back sponsorships because it is deemed frivolous to spend money on sports sponsorships when such companies are receiving bailout money from the government.”

According to Rishe, corporate sponsors tend to receive perks such as access to exclusive luxury suites. Much of this is for corporate sponsors to treat their executives and highly valued clients to a first-class experience.

“Certainly, sponsoring sporting events/teams (especially visible ones) will boost awareness of the company and its products,” Rishe said. “But if you can’t tangibly show how this added awareness/visibility boosts sales, then the sponsorship may simply be seen as a vanity purchase or an expense to enable executive staffers inside access to cool sporting events.”

Though Countrywide did not back out of its sponsorship, Kramer agrees there would be pressure on companies receiving bailout money to not sponsor sporting events.

“Anybody who is getting (bailout) money, like these financial institutions,” Kramer said, “(is) at particular risk for being embarrassed.”

A year without a title sponsor

As Kramer explained, the LATO will have to endure the hardships of decreased sponsorship revenue this year.

Much of the hardship will be in changing facilities. The changes, Kramer said, will likely be welcomed by fans.

“We have cut more than half of a million dollars of cost, but the spectator wouldn’t even know it,” he said. “We’ve improved some things this year … including Wolfgang Puck taking over the Champions Club, and we’re also adding food service into the clubhouse.”

Also being reduced this year will be sponsorship booths and advertisements over the PA system and during television broadcasts.

“On the broadcast there will be fewer commercial spots … so that’s probably going to be a better viewing experience,” Kramer said.

Kramer added that the tournament had about $2 million dollars in sponsorship revenue, which accounted for about half the income last year. This year, however, it is only at about $1 million. Even with Kramer’s prediction of a 30 percent decline in total revenue from last year, the tournament still finds itself growing. It recently added a fourth day of television broadcasts.

“In essence, we’ve gone up 33 percent above last year with an extra day, starting on Thursday instead of Friday, which is another enhancement,” Kramer said.

The LATO, despite the slash of costs and decline in sponsorship revenue, will still be fully engaged in its primary purpose, Kramer said.

“Let’s face it, out mission here with UCLA is to promote and develop the growth of tennis for the campus and for the tennis association, so there’s no lack of ability to do that,” Kramer said.

And the fans are still coming

Despite the decline in sponsorship money, Kramer is expecting less than a 10 percent decline in ticket sales this year. Rishe said that this is likely because the LATO is the only opportunity for tennis fans in Southern California to see high-caliber tennis live in Los Angeles.

Another factor in the relatively low decline in ticket sales is the demographic of tennis fans.

“I think the demographic for an event like ours is a very high one,” Kramer said.

Rishe agreed that the tennis demographic is affluent.

“The rich like tennis, and the rich tend to stay rich,” Rishe said. “Throw all those pieces together, and this is why the impact on ticket sales is far less than the impact on sponsorships.”

The addition of four legends matches including long-time tennis great Pete Sampras has further attracted fans to come to this year’s tournament.

“We have a lot in this year’s legends matches … that’s helping,” Kramer said.

Looking to the future: a title sponsor

Although some may argue that the lack of a title sponsor creates a less commercialized look for the LA Tennis Open, Kramer said that is not his goal.

“Things like the Masters, Wimbledon ““ they don’t have a title sponsor,” Kramer said. “I think in our case, it’s probably necessary to really continue financially to be viable because basically a title sponsor is approximately 30 percent of our total revenue stream.”

Being hosted in a major media market such as Los Angeles, Rishe said he does not expect the tournament to remain without a title sponsor for much longer.

“It’s based out of L.A., so another company may step up to the baseline and make the sponsorship buy in the future,” Rishe said. “Also, the tournament has a long-standing history. This leads me to believe that it will survive at least beyond next year.”

Though he admits to not being an expert on the economy, Kramer said he anticipates an economic recovery.

“I have a feeling that things seem to be speeding up just a little bit,” he said.

“We’re looking for and expecting to experience an economic recovery in general and with this tournament by next year.”

Leave a comment

Your email address will not be published. Required fields are marked *