U.S. Open to keep hospitality ops in house

U.S. Open to keep hospitality ops in house

By Daniel Kaplan, Staff Writer


The National Tennis Center includes a 185,000-square-foot hospitality center.
Photo by: USTA
Outsourcing corporate hospitality is a big trend in pro sports, with MLB and the NFL among the notable leagues now paying a third-party specialist to handle some of the lucrative business.

But after spending months in lengthy negotiations with CAA Premium Experiences, the U.S. Tennis Association is bucking the trend and keeping its prized U.S. Open portfolio in house.

“We went down a path with CAA, and to see whether or not we could structure a partnership that would work for both sides,” said Lew Sherr, the USTA’s chief revenue officer. “If we were to go forward with a third party in this way in the future it would be a much more limited, focused relationship. The initial thought that there might be an overarching, expansive outsourcing of corporate hospitality was proved just too challenging.”

Though tennis does not draw NFL-size TV ratings, the sport is a major center of hospitality. The U.S. Open draws more than 700,000 over two weeks in the late summer, and is a prized ticket among the corporate and financial set in New York. The main stadium has 90 suites, and there are 24 separate sessions during the tournament.

That, however, made working a deal with CAA difficult. First, unlike most organizations, the USTA has no outbound sales staff for hospitality because there is such a high demand that the tournament has a waitlist. Second, more than most organizations, Open sponsors consume a healthy share of the hospitality.

JPMorgan alone runs more than 18,000 guests through its hospitality programs, and this year is getting a new space in Arthur Ashe Stadium, the main venue, to handle its growing entertainment business (there is a separate 185,000-square-foot hospitality center on the National Tennis Center grounds).

There was also concern that if the USTA carved out thousands of tickets, and event spaces, for a separate business, rivals of existing sponsors could suddenly snap up the inventory and essentially get sponsor-like hospitality.

With JPMorgan entering the last year of its sponsorship at the Open — and the sides heavy in negotiations for a major extension — the prospect that the bank’s rivals could entertain their clients at the Open could not have been a good look.

CAA Premium, which handles the event business for MLB, did not reply for comment.

Last summer, Sherr invited agencies in after his head of corporate hospitality for 19 years, Raleigh Leahy, told him she would step down after that year’s tournament to join On Location. She did but has since left On Location.

Several agencies toured the 2016 Open, including CAA and On Location. Ultimately, Sherr late that year began exclusively negotiating with CAA. He lauded CAA, but said threading the needle between the Open’s sponsor hospitality and other types of hospitality proved too difficult.