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USTA completes US Open renovation on time and on budget

  • Five-year, $600m project capped by opening of new Louis Armstrong Stadium
  • Armstrong will have retractable roof, expanded seating and state-of-the art facilities
  • New night sessions will drive revenue from fans, sponsors and broadcasters

The US Open’s 50th anniversary is a double celebration for the US Tennis Association, as it coincides with the completion of a five-year, $600m redevelopment of the tournament’s home, the USTA Billie Jean King National Tennis Center in Flushing Meadows, New York.

Following the 2016 addition of both a retractable roof over Arthur Ashe Stadium and a new 8,125-seat Grandstand Stadium, a rebuilt Louis Armstrong Stadium will be unveiled at this year’s tournament.

Built for the 1964 World’s Fair and renovated for tennis in 1978, Armstrong was the US Open’s main arena until 1997 when the 23,700-capacity Ashe was completed. Its upper tiers were removed to reduce its capacity from 18,000 to around 10,000 as it became the tournament’s second stadium.

A new Armstrong – with a retractable roof – was announced in 2013 as part of USTA’s extensive renovation plans for the National Tennis Center. The work – designed by architects Rossetti – has been completed on time, on budget and without public funding.

The new stadium will have more seating, taking its capacity up to 14,000; a glass-fronted retail area for Polo Ralph Lauren, Wilson, Adidas and the US Open Collection; an American Express hospitality suite; wide concourses on two levels where fans can see the action; four times as many bathrooms and concession stands than the previous arena; and a base for the umpires and ballpersons.

This year, thanks to the scheduling flexibility provided by the new roof that will allow play during rain, Armstrong will also join Ashe in having separate day and night sessions for the first time.

This will provide much more ticketing revenue – Armstrong previously had day sessions that lasted until the end of play – and hugely benefit broadcast partners and sponsors by providing additional guaranteed prime-time matches.

A service shot clock will also be introduced for the first time in a grand slam event, designed to speed up play and keep TV viewers’ attention by removing unnecessary delays to the game.

Why original Louis Armstrong went off-key

Armstrong was torn down, rather than renovated once again, for two main reasons. Firstly, the stadium had caused severe foot-traffic congestion due to its proximity to the East Gate, the US Open’s main entrance.

“Eighty-five per cent of our patrons come in through the East Gate,” Danny Zausner, the National Tennis Center managing director and COO, tells SportBusiness. “So if you were designing a venue from scratch you wouldn’t necessarily put the main door of your stadium entrance right next to the front door of your site entrance.

“[But] it was the nature of the park and what was available land for the USTA when they came in the 1970s and again when they renovated in the 1990s.”

Secondly, the USTA felt it had no option due to the limitations of by the 1960s-era structures, which were originally designed to be temporary.

“We recognised many years ago that it was outliving its useful life and while it was an unbelievable place to watch tennis, it needed modern amenities. There was just no way to do anything with the existing stadium any longer,” says Zausner.

“Everyone was so focused on the action on the courts that they really just accepted the fact that the bathrooms were from 1964. We were very limited with concessions offerings, merchandise offerings, shade, open hallways – but we did what we could as the fans loved the venue and the players loved playing there.”

Raising the roof

The US Open will become the second grand slam with multiple retractable roofs, joining the Australian Open (which has three) and beating Wimbledon’s redevelopment plans for No1 Court by a year. The French Open is expected to have a roof on Court Philippe Chatrier, its first, by 2021.

The USTA had considered installing a roof on Ashe when it was first designed in 1994, but 100 years of rain data indicated that it made no financial sense due to the historically dry climate of New York in late summer.

It took five years of unlikely rain delays between 2008 and 2012 – pushing the men’s final to Monday each time, at the inconvenience of fans, players, sponsors and broadcasters – to change the USTA’s thinking. A retractable roof on Ashe, costing $150m, was completed in 2016 and will be followed by Armstrong’s.

Rain delays throughout the tournament remain rare but the USTA was happy to trade primary returns against secondary and tertiary benefits.

“There is no business model that will show you that [the roof on Ashe] makes sense but it was the right thing to do for the event,” says Zausner. “When we had the technology available to do it, it was the right thing to do.

“When you get almost 20 per cent of your fanbase coming from international places, and 40 per cent coming from outside the Tri-State area, these people could be coming for just one day so for these people to travel, show up and then get rained out, it puts a bad taste in their mouth and nothing positive comes out of that.

“This type of certainty in terms of play does not generate revenue but it does ensure a better experience. From a word-of-mouth and buzz perspective, if more and more people come and have a great experience it will lead to more fans coming round each year.”

Zausner says the guaranteed play provided by the roofs could help in regards to negotiating future broadcast rights. But he does not believe it will be a deciding factor. “I don’t think our broadcast partners were saying before that they had something that was less than ideal,” he says.

The ability for US broadcast partner ESPN to have guaranteed prime-time programming on both Ashe and Armstrong “will be a real upgrade”, Zausner adds.

Both roofs take six to seven minutes to close. For Zausner speed was of the essence – almost regardless of cost – so players would not have to leave the courts during the rain delay and fans watching on TV would not lose interest while they wait for play to resume.

“When we first designed the Arthur Ashe roof, it was projected to be 30 minutes to open or close it. My perspective was, ‘I don’t want to lose the players back to their locker rooms’. So the engineers continued to work on it and they were able to get it down to six or seven minutes.

“It cost more money but for us the difference between sitting in the rain for 20-plus minutes for a roof to close versus it closing in six minutes and being back in play within 10 minutes was a huge difference and that justified the cost. As long as the [cost of installing the roof] didn’t scare us that was the goal.”

Split sessions boost ticketing

After the original Armstrong’s capacity was reduced to 10,000 following the construction of Ashe, the USTA decided to increase it to 14,000 in the new stadium. “A number in the middle that will help with crowding on the site,” says Zausner.

A total of 7,400 seats in the upper bowl are general admission – meaning fans can get a seat, day or night, with a grounds pass – while 6,600 seats in the lower bowl are for reserve-ticket holders only.

The increase in general-admission tickets from 7,000 to 7,400 is designed to reduce the queues outside the venue. “We are hoping to alleviate those fans that are patiently waiting outside the stadium for a change-over or an opportunity for people to leave and seats to free up,” says Zausner.

The increase in reserve tickets from 3,000 to 6,600 – combined with the newly-separated day and night sessions – is designed to increase revenue as it gives many more opportunities for fans to see matches.

There will be daytime sessions on Armstrong for the first nine days of the tournament fortnight, each containing three matches, joined by two-match night sessions for the first six days.

“Those 3,000 reserve tickets in the old stadium, you would get a subscription and for the first nine days that would get you all the matches that were played there all day. There were usually four or five matches a day and they would run until 9-10pm at night,” Zausner adds. “Now there will be two separate events.”

Last year, the average cost of an all-day ticket was $238; this year a day-session pass costs on average $258 and a night session $264. Having doubled the amount of reserve seating, the USTA could more than quadruple its reserve-ticket revenue on Armstrong over the first six days.

The USTA decided against adding premium seating to the new Armstrong. “We believe that the space is better used by seat holders than suite holders in the building,” says Zausner. Space, however, has been provided for USTA partner American Express to build a private hospitality space for Centurion Card holders in the second floor of the building.

On time and on budget

The USTA has completed the five-year, $600m project on time and on budget, with no design compromises made along the way. “The initial budget was $600m and that’s pretty much what we’re spending,” says Zausner.

To pay for the renovations, in 2014 the USTA completed a $450m bond sale aided by its bankers JPMorgan Chase and Bank of America Merrill Lynch. The bond is cut into three tranches: three years, 10 years and 25 years. Cumulative annual interest costs will reach $30m. The remainder of the renovation is being paid out of reserves and free cash flow.

“I assume within the next 10-15 years you will see the majority of [the bonds] paid off,” says Zausner.

It is serendipity that the completion of the five-year project, which happened to begin in 2013, aligns with the tournament’s 50th anniversary celebrations. “If someone said to me we’ll give you seven years to do it rather than five, it would have been a saner approach but we’re getting it done and it’s in the best interest of the event to do it quicker rather than longer,” Zausner says. “It’s perfect that it ends with the 50th anniversary. It’s taken years off my life, but it’s been fun.”

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