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Speaker 1: This is Bloomberg Business of Sports. The world changing and

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Speaker 1: what are the things we can do to transform a

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Speaker 1: business and engage our fans globally in different ways. People

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Speaker 1: are using their name and likeness to create more opportunities,

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Speaker 1: more states and companies. In order to turn the organization around,

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Speaker 1: we had to turn it around not only just on

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Speaker 1: baseball operations side, but other business operations side well and

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Speaker 1: any other sport is very difficult, but I like to

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Speaker 1: blog my horizons and be able to expand. Sports need

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Speaker 1: to be consumed a lot and not to the big

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Speaker 1: competitive advantage for inaugural property holders of sports content in

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Speaker 1: the media landscape. Bloomberg Business of Sports from Bloomberg Radio. Hello,

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Speaker 1: I'm Scarlet Foo, and I'm Mike Lynch and I'm Michael Barr.

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Speaker 1: Over the next hour, we will explore the big money

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Speaker 1: issues in the world of sports and talk to some

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Speaker 1: of the biggest players in the industry. It's time we

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Speaker 1: talk about some US Open Tennis. The U s t

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Speaker 1: A National Tennis Center has been the center of attention

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Speaker 1: for the last two weeks as they host a mostly

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Speaker 1: full capacity crowd out in Flushing, New York. We are

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Speaker 1: thrilled to be joined by the CEO of that facility

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Speaker 1: and really the man on the front lines of getting

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Speaker 1: things done. We want to welcome Danny Zaustir to the

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Speaker 1: business of sports. So, Danny, you are the guy who

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Speaker 1: basically runs the show for the U S Open. You

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Speaker 1: make things happen. And it's been a crazy couple of

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Speaker 1: years over the last eighteen months. You went from converting

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Speaker 1: the Tennis Center into a field hospital in the early

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Speaker 1: days of COVID nineteen, then you converted the structure back

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Speaker 1: to hold the U S Open. So what do things

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Speaker 1: look like this year hosting the Open after what's been

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Speaker 1: a crazy Well, I could tell you that we honestly

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Speaker 1: don't think we've We no longer say we've seen it all,

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Speaker 1: that's for sure. You just you prepare for everything that

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Speaker 1: could possibly come our away. And you know, once again

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Speaker 1: this year, we were you know, starting as early as February,

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Speaker 1: we thought, based on the information we had related to

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Speaker 1: COVID at that time, that maybe we'd see fans and

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Speaker 1: that was if and when we got approval from the

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Speaker 1: State of New York, which ended up not coming until June,

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Speaker 1: and so that delayed our whole ticket on sale. Everything

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Speaker 1: we did by about four months. Um. But you know,

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Speaker 1: if you can get us good weather and the players

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Speaker 1: are all here, and thankfully we'll be able to get

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Speaker 1: the vast majority of the players here. We've had an

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Speaker 1: incredibly successful US Open so far. And as we head

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Speaker 1: into finals weekend. How has the revenue been so far

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Speaker 1: since last year? Obviously we know what happened last year.

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Speaker 1: COVID just wiped out a lot of sports. How has

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Speaker 1: the revenue bounced back for you guys? The revenues have

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Speaker 1: been strong. We were very fortunate. Obviously last year we

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Speaker 1: rely primarily on broadcast revenues and on sponsorship revenue. There

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Speaker 1: was zero ticket revenue. Uh. And while we were delayed

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Speaker 1: selling tickets this year, UM, we we the numbers have

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Speaker 1: been really good on the ticket front. We traditionally sell

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Speaker 1: about our tickets to our international fans, and realistically we

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Speaker 1: just didn't see that happening for this year. And we're correct.

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Speaker 1: You know what might have been in the year's past

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Speaker 1: is certainly no more than five um. But domestically, as

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Speaker 1: are great. Our sponsors could not wait to get back

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Speaker 1: on site and activate be with the fans. Obviously a

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Speaker 1: lot of New York based companies that just hasn't been

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Speaker 1: able to be interacting with their markets over the last

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Speaker 1: twelve to eighteen months, and we're happy to provide that opportunity.

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Speaker 1: How does the lack of international fans traveling all the

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Speaker 1: way to the US Open and attending change things for

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Speaker 1: this year? I mean, I feel like out of town

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Speaker 1: fans is very much part of the fabric of the

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Speaker 1: U S Open. There's no question with us, we were

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Speaker 1: prepared for it, and certainly all the culinary offerings that

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Speaker 1: we have that's meant to appeal to every single fan,

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Speaker 1: regardless of where they come from there here. Uh. And

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Speaker 1: the one thing that's beneficial for the of the fans

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Speaker 1: who are coming out to the Open is the fact

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Speaker 1: that the grounds are a little less crowded. We purposely

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Speaker 1: only sold about fifty of what we would sell on

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Speaker 1: a daily basis of our grounds passes. We had a

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Speaker 1: last minute hiccup with the city where they insisted that

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Speaker 1: we ensured that everyone who came to the event were vaccinated,

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Speaker 1: So we announced that literally forty eight hours before we're

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Speaker 1: opening the door. Uh. Incredibly well received by the fans,

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Speaker 1: so we've really got very very limited pushback on that,

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Speaker 1: and with the exception of a hurricane and typhoon, extreme

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Speaker 1: heat and everything else. It's been a piece of cake.

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Speaker 1: So Danny, we've surprised by all of that. With the

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Speaker 1: deal coming at the last minute. I totally understood where

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Speaker 1: they were coming from in terms of wanting to get

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Speaker 1: people vaccinated in the city. That was an incredibly appreciative that. Ultimately,

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Speaker 1: you know, they were trying to view Arthur H. Stadium

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Speaker 1: as an enclosed structure when we closed the roof, which

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Speaker 1: simply isn't the case. We have every model under the

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Speaker 1: sun to prove that that it's basically a canopy or

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Speaker 1: an umbrella over an existing stadium. But they wanted us

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Speaker 1: to do the right thing, and the right thing by

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Speaker 1: our fans and by the players and by everybody was

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Speaker 1: to go to the vaccination rule. So yes, surprise in

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Speaker 1: terms of the timing, because we would love to have

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Speaker 1: communicated that months ago, even before we went on sale.

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Speaker 1: But again with the limited pushback that we've gotten, it's

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Speaker 1: worked quite well. It's good to hear there wasn't a

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Speaker 1: lot of pushback from fans. Given how sure noticed that

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Speaker 1: that um directive was from the city. What kind of

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Speaker 1: COVID measures were taken for the players and what does

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Speaker 1: that look like for the fans or can the fans

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Speaker 1: not really see that? So interestingly enough, I think the

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Speaker 1: fans can't see some of it, but some of the

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Speaker 1: behind the scenes stuff and the players specifically are one

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Speaker 1: of the things that the fans were very curious to understand.

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Speaker 1: And the way that this mandate was dictated by the

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Speaker 1: city not specific to us but two venues indoor venues,

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Speaker 1: uh that it applied to the fans that a hundred

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Speaker 1: percent vaccination were required for the fans, but for the

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Speaker 1: actual players or artists, And in terms of if it

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Speaker 1: was like a Carnegie Hall type setting, um, those particular performers,

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Speaker 1: if they didn't live in New York City, they weren't

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Speaker 1: required to be vaccinated. We went into this tournament knowing

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Speaker 1: that a minimum of the players were vaccinated. We offered

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Speaker 1: them in a couple of the tournaments prior to the

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Speaker 1: US Open to be able to get vaccinated at those tournaments,

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Speaker 1: but knowing that almost half of the players wouldn't be vaccinated,

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Speaker 1: we entered them all into a three a regiment of

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Speaker 1: being tested. And while the city has been hovering about

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Speaker 1: two point five percent on a positive rate, the players

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Speaker 1: and their entourages have been way below one percent, so

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Speaker 1: we're doing significantly better than the city has been doing

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Speaker 1: with positivity rates. I don't mean to get up all

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Speaker 1: in your business here, Nanny, but you're the guy when

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Speaker 1: they want renovations and improvements. You're the money guy. So

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Speaker 1: what are we looking at for the off season for

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Speaker 1: any improvements and and costwise? I mean, obviously you're the

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Speaker 1: man that watches all the pennies and dollars. Can you

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Speaker 1: take us through that process? Well, you know, let's not

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Speaker 1: lose sight of the fact that our organization gave us approval.

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Speaker 1: Over the last five to seven years, have spent about

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Speaker 1: six d and fifty million dollars to redo our entire site,

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Speaker 1: which included a roof over arthur Our Stadium, a brand

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Speaker 1: new Lewis Armstrong Stadium and a grand Tand basically we

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Speaker 1: reinvented the entire grounds. So we are not an organization

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Speaker 1: that ever rests on us Laurel. So no matter how

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Speaker 1: high the wow factor is the fans, we look at

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Speaker 1: any opportunity to improve it. For the following year is

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Speaker 1: the first year that the site was completely rebuilt, and

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Speaker 1: we got the benefit of that for eighteen and nineteen

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Speaker 1: nineteen produced record breaking in every category broadcast, sponsorship, ticket sales. Obviously,

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Speaker 1: fans one they're coming back, but not at that pent

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Speaker 1: that we saw in nineteen, So when we look forward,

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Speaker 1: we know that there's really not going to be building

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Speaker 1: in the short term. A Lucier, who's our chief revenue officer,

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Speaker 1: has done an incredible job with our sponsors and partners

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Speaker 1: and bringing in new partners that can complement everything we've

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Speaker 1: got on site. So there's a tremendous amount of upside.

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Speaker 1: The growth of recreational tennis in the US right now

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Speaker 1: is exploding, and it's an opportunity for us to introduce

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Speaker 1: new people to the sport and to the US Open.

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Speaker 1: And we also see great opportunities internationally in markets that

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Speaker 1: we just haven't really had a big presence in the past,

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Speaker 1: and hopefully the international fans can return next year. One

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Speaker 1: thing that we've mentioned several times, and I feel like

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Speaker 1: we're dancing around it a lot, is the roof and

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Speaker 1: the extreme weather that we because the remnants of Hurricane

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Speaker 1: Ida came through the New York tri state area about

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Speaker 1: a week ago, and it wasn't expected to be terrible.

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Speaker 1: I mean no one really knew it was going to

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Speaker 1: be as bad as it turned out to be. Um Loose.

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Speaker 1: Armstrong Arena has a retractable roof that does cover players

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Speaker 1: and fans against the rain, but Ida was just a

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Speaker 1: different thing entirely, and the winds took it to a

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Speaker 1: whole new level. Talk about the challenges that night. So

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Speaker 1: interestingly enough, we had a meeting the week before the

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Speaker 1: tournament began when we were first bracing for a hurricane

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Speaker 1: Henri and we had taken down the whole site in

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Speaker 1: preparation for that Saturday before the tournament was starting, and

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Speaker 1: then we were able to rebuild everything and be open

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Speaker 1: to the public that following Monday. And one of the

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Speaker 1: things that I mentioned in the meeting is that everyone

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Speaker 1: on our team in the tournament operations dealing with the

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Speaker 1: players needed to remember that Lewis Armstrong Stadium is a

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Speaker 1: naturally ventilated stadium that is not completely enclosed. And while

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Speaker 1: I can keep the rain out, if we get driving

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Speaker 1: winds that were forecasted from a hurricane, that wind can

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Speaker 1: blow into that structure. We have louvers on the north

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Speaker 1: and south end that keep the rain out when it's

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Speaker 1: a mile day and it obviously allows the air to

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Speaker 1: flow through, and that's exactly what we saw. The roof

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Speaker 1: did everything was supposed to do from above, but when

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Speaker 1: you get driving thirty winds and we're a short distance

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Speaker 1: from the flushing day um, basically the stadium did what

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Speaker 1: it's going to do is it drives in the rain

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Speaker 1: and it made it not possible for the players to play.

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Speaker 1: One of the benefits we have is Arthur Ash Stadium

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Speaker 1: was able to keep all the water out, so we

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Speaker 1: were able to take the matches from Armstrong, move them

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Speaker 1: into Ash and complete the matches that needed to be

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Speaker 1: played between those two stadiums. And he doesn't make a

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Speaker 1: difference from the facility side or the broadcast side. How

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Speaker 1: does it work with your rights partners? Well, we are

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Speaker 1: incredibly fortunate. ESPN is a phenomenal partner for us, and

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Speaker 1: much like the way the U s TA views the

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Speaker 1: US Open, every year we do our surveys with our fans,

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Speaker 1: with our broadcast partners, with our sponsors to understand what worked,

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Speaker 1: what didn't work, and frankly, if they all gave us

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Speaker 1: hundred scores, we still be saying, well, what are we

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Speaker 1: going to do next? And ESPN fit the same way.

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Speaker 1: We thought we had a lot of cameras on Arthur

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Speaker 1: Our Stadium when they were eight or ten of them

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Speaker 1: and now we're out seventeen nineteen cameras. Last year they

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Speaker 1: were able to experiment um with no fans in the stands,

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Speaker 1: so they're able to put cameras in locations they never

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Speaker 1: were able to do before they saw the reaction to it.

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Speaker 1: So you're you're so, you're right. Every year is an

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Speaker 1: opportunity with our broadcast partners, with streaming, with everything else

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Speaker 1: we do to try and figure out what is next

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Speaker 1: and how do we make this event that much you know,

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Speaker 1: get the fans that much closer to the action, and

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Speaker 1: we'll never stop. Yeah, it's something that you continue to

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Speaker 1: build on. I mean last year was unfortunate and that

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Speaker 1: you couldn't have any fans, but you were able to

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Speaker 1: host the US Open live. UM. How did that experience

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Speaker 1: of not having fans prepare you to build in some

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Speaker 1: of the lessons that you've learned from last year to

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Speaker 1: ramp up the fan engagement for this year. I wonder

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Speaker 1: what it looks like this year after you went through

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Speaker 1: a year like Yeah, we were talking about just camera

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Speaker 1: angles and what ESPN does, and you know, we were

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Speaker 1: able to see what some of those angles worked incredibly well.

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Speaker 1: But yet at the same time, there'd be a person

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Speaker 1: paying us considerable amount of money to sit in that

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Speaker 1: seat this year, so we had to try to figure

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Speaker 1: out how we could do both. Where we put those cameras.

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Speaker 1: We knew last year that we wanted to try and

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Speaker 1: keep as many people off the court as possible sides

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Speaker 1: of the players. So this year we went to all

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Speaker 1: technology on all courts and so there's no line judges,

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Speaker 1: it's just a chair umpire, reduced the number of ball

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Speaker 1: persons on the court, trying to make the court as

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Speaker 1: clean as possible for the players. And from a broadcast perspective,

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Speaker 1: what you're looking when you're watching that broadcast is it's

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Speaker 1: about the players. Um. So the other thing we've done

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Speaker 1: is last year we put all the players in a

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Speaker 1: centralized hotels that we can kind of keep them in

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Speaker 1: that bubble. Uh. This year, with restriction is being lifted

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Speaker 1: for the most part, and we offered them the opportunity

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Speaker 1: to be in a centralized hotel, but now it's in Manhattan,

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Speaker 1: so they could be a little able to get out

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Speaker 1: and about more than they were last year where they

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Speaker 1: were really sequestered to their rooms into the hotel that

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Speaker 1: we had set up. UM. So you know, there were

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Speaker 1: benefiting there were some benefits and in a statistic way

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Speaker 1: to not having the fans on site last year, but

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Speaker 1: clearly it's nothing we ever wanted to go to again.

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Speaker 1: And while we're not at a percent capacity even being

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Speaker 1: able to see the modifications we've made to the site

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Speaker 1: of the fans on the site, we know how well

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Speaker 1: it will work in two when, as you say, the

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Speaker 1: international fans come back. Last year, you only had the

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Speaker 1: tennis players as you mentioned, and maybe the volunce and

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Speaker 1: volunteers that worked the tournament during the covid era and

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Speaker 1: this year, uh, and it's got to be a big

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Speaker 1: bit of a relief for the people that sell the souvenirs,

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Speaker 1: for the people that sell refreshments, the people that sell

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Speaker 1: food there at the facility. That has to be uh,

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Speaker 1: something that has been a big plus for all those people.

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Speaker 1: No question, we actually hire an excess of seven thousand

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Speaker 1: people to work for the event, and I will tell

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Speaker 1: you that the positive is that we were able to

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Speaker 1: get year after or at least fifty of the people

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Speaker 1: come back year after year. We have some guest service

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Speaker 1: personnel have been here more than forty years. The flip

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Speaker 1: side to that is right now in the New York market,

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Speaker 1: as you know, it's really hard to get people to

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Speaker 1: to work, and so of that seven thousand, there have

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Speaker 1: been some, like you mentioned the food service workers and

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Speaker 1: merchandise workers, that have been incredibly successful getting people, but

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Speaker 1: there's been others that it's been a struggle, and so

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Speaker 1: it's been a challenge to staff all seven thousand of

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Speaker 1: those positions were there, and and the fans don't see

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Speaker 1: any change in the services that we're providing. But that

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Speaker 1: was for all the positive about bringing people back. The

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Speaker 1: negative has been just how difficult it's been to get

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Speaker 1: people to work. Danny would come into the conclusion of

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Speaker 1: this year's open, how soon will you begin planning for

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Speaker 1: the open? Well, the running joke always is the day

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Speaker 1: after the open, we're already behind schedule for the following year.

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Speaker 1: So we uh, we don't. We don't pat ourselves on

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Speaker 1: the back or rest on our laurels for very long.

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Speaker 1: We basically spend the rest of September in October to

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Speaker 1: understanding what has happened, well worked, what didn't work, and really,

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Speaker 1: what's next? Uh? You know, you can never were always

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Speaker 1: in the sales mode for ticketing and for sponsorship and

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Speaker 1: anything else in between. And in terms of the facility

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Speaker 1: is concerned, you know, we go back to being a

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Speaker 1: community tennis driven facility that's open eleven months a year.

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Speaker 1: And while that's happening, whatever construction needs to take place,

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Speaker 1: whatever changes we want to make, uh, has to get

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Speaker 1: off the ground immediately, otherwise it doesn't get done in

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Speaker 1: time for the next year's event. Yeah. I'm curious about

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Speaker 1: that because the city and indeed the country is experiencing

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Speaker 1: labor shortages everywhere. So when it comes to things like construction,

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Speaker 1: it takes a lot longer to get um, the right

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Speaker 1: people in place, It takes a lot longer to get

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Speaker 1: the supplies you need in place. How is that affecting

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Speaker 1: your planning? Well, I will tell you thankfully, the heavy

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Speaker 1: lifting with the construction that we did over the past

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Speaker 1: five years, I'm thankful that we finished hit and we

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Speaker 1: are in in the middle of that right now, because

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Speaker 1: I'm not so sure if like Lewis, Armstrong Stadium was

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Speaker 1: the last piece of the puzzle for us and that

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Speaker 1: finished in eighteen. If that was slated to finish in one,

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Speaker 1: it would not have been able to be completed on time.

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Speaker 1: To your point, the lead times on construction is staggering,

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Speaker 1: lit alone getting the workforce to do the work. Have

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Speaker 1: you had any input? I'm sure you have, but the

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Speaker 1: kind of input where you sit around the table with

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Speaker 1: some of the great tennis stars like a Billy Jane

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Speaker 1: King uh and and talk about, hey, what can we

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Speaker 1: do to make this facility better? One from a tennis

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Speaker 1: pro standpoint and too from tennis fans standpoint, Are you

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Speaker 1: taking any input from the players? Well, I can tell

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Speaker 1: you that our Stacy Alistirs, our tournament director and the

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Speaker 1: first female tournament director of a Grand Slam tournament in

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Speaker 1: the history of Grand Slams. You know, her relationships with

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Speaker 1: both the w t A and the A t P

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Speaker 1: players is very strong and she speaks to many players

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Speaker 1: not just at other tournaments, but one on one via

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Speaker 1: text or phone, whatever it might be, to get their

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Speaker 1: input on hey, how are we doing in the old

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Speaker 1: ed Cotch days of how am I doing? And as

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Speaker 1: far as our facility is concerned, Yeah, our surveys are

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Speaker 1: invaluable from the fans to understand you know, we introduce

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Speaker 1: new fights food items on the site. You know what's

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Speaker 1: the response to it. It's not just about the sales,

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Speaker 1: but it's the experience that they you know, was it

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Speaker 1: as good as we anticipated at being. And the same

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Speaker 1: thing with our our sponsor partners and our broadcast partners

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Speaker 1: to understand every aspect of what they're doing. And we

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Speaker 1: meet without them. It's a three week event, but we

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Speaker 1: we plan and meet with them the other forty nine

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Speaker 1: weeks of the year. Danny, thank you so much for

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Speaker 1: making the time to speak with us. I know it's

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Speaker 1: been a crazy busy week for you. Us T a

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Speaker 1: National Tennis Center CEO and of course friend of the

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Speaker 1: Bloomberg Business of Sports podcast, Danny's Ausner. Thank you guys.

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Speaker 1: That'll do it for us this week. You've been listening

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Speaker 1: to The Bloomberg Business of Sports. We're here each and

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