For W&S Open, $18M Bill Came Due on Center Court Renovation
Tournament was required to repay outstanding loan balance this summer.
This weekend, the Western & Southern Open gets underway in Mason. It’s a world-class event but building it comes at a price. And this year, the price is particularly high.
That’s because, in 2017, Cincinnati Tennis LLC—the soon-to-be-former owner of the tournament—took out a $25 million loan to finance construction of the five-story South Building between the venue’s Center and Grandstand courts. The South Building features air conditioned box seats, which the tournament calls a “first in professional tennis.”
(The tournament has also boasted that the South Building is “one of the tallest buildings in Mason.” I think they forgot about the Eiffel Tower and Drop Zone1 at Kings Island across I-71, but I digress.)
By the end of 2018, the tournament had completed the South Building but owed almost $23 million, according to financial statements for the United States Tennis Association. (The USTA owns 93.8 percent of Cincinnati Tennis LLC.)
At that time, the terms of the loan required the tournament to begin making annual debt payments of approximately $1.6 million, which it did in the years 2019-21.
But this summer—June 30, to be exact—the balance of $18 million became due as a balloon payment. That’s half of the tournament’s 2021 revenue.
Did the USTA have 2022 circled on its calendar as the year to sell the tournament because of the balloon payment? It seems possible. Then again, USTA might have just recognized it was time to cash in; IMG just bought the ATP Masters 1000 event in Madrid for over $400 million, according to the Business Courier.
We don’t know how the USTA’s deal with reported purchaser Ben Navarro addresses the debt, or whether the bank has already been paid back. But assuming the sellers footed the South Building bill, the balloon payment alone would wipe out about six percent of their reported $300 million proceeds from the sale. That’s not nothing.
Report: Western & Southern Open “not expected to move locations”
I don’t want this newsletter to be simple curation of reported items, but because it’s very relevant to today’s topic, I wanted to pass along the (very good) news via Tennis.com that the tournament is expected to stay put.
The report did not cite any source for that tidbit, so don’t take it as gospel. I’ll worry that the tournament might move until we hear from Navarro himself that it won’t.
Newsletter mission
Writing today’s newsletter helped give me additional insight into why I started it: I want to help Cincinnatians better understand the community they live in. And I want to learn more about it myself.
Often, like today, I won’t have all the answers. But I hope we all learn a bit about how our city and the sports world connect.
For instance, now you can look up at one of the tallest buildings in Mason next week at the ATPs and know it wasn’t really paid for until this year.
Thanks for reading!
Drop Zone has apparently been renamed Drop Tower, but it will always be Drop Zone.