TMS - STUTTGART

November 5, 2000

Ion Tiriac

MR. HENDRIKX: Yes, indeed, thank you very much. Indeed, this is our last event. We have been here for ten years. EUROCARD Open has been wonderful, been extremely successful. We have now a brand awareness here in Germany of over 90%, that is perfectly okay. All that has certainly worked for us. When you're the market leader, you not only look for brand awareness, you also look for brand sympathy. That is something very close to our heart. We hope this event has transposed some of that sympathy from tennis to our customers, our cardholders, and our merchants. A great time comes to a great end. I would particularly like to thank the press, the media, in total, particularly this year you have been enormously generous putting our brand into the newspapers, which we feel as a very nice personal handshake between you, as the media, and us, as the sponsor. I thank you very much for that. The whole concept has changed. This is now a Masters Series event, not a EUROCARD Open event anymore. The public TV networks also say good-bye. The agent marketing company that is in charge has decided to go for global brands. We cooperate, of course, with MasterCard on a global basis, and EUROCARD as a market leader here in Germany in that sense. We don't have a global brand. Just in the partnership it would be a global brand. I think it's been about three years ago that we first talked about using virtual brands, that is to say here in the stadium and on German TV, we would have the EUROCARD brand, and use modern technology to transmit the MasterCard brand around the world. I don't know precisely why we have not been able to get that act properly together. Never mind. We close down and say thank you very much. It's been a terrific partnership between the Messe, Ion Tiriac, the press, and ourselves. Let's see what we do next. We certainly have plans. Watch this space.

MR. HELDMANN: Thank you, Mr. Hendrikx, first. I can confirm that it was really a fantastic time working close together with you personally and of course your company. Besides that, also welcome from my side. Advantage for the sport in Stuttgart. Under this headline, I'd like to summarize the overall result of this year's tournament, as well as the agreement we reached this week for the upcoming years concerning world class tennis sports in Stuttgart. Ten years ago with EUROCARD Classics, the foundation was laid for a sporting development of the tournament coming to Stuttgart, becoming to the place of Tennis Masters Series, which is one of the best tournaments worldwide. Within this period of time in which we also always had the full support, as I mentioned before, from EUROCARD, we lived really through all sorts of highs and lows of the tennis sports, especially here in Germany, for instance, for the euphoria in Germany, triggered by the success of Becker, Stich and Steffi Graf. Then the post-Becker era, the interest for tennis remarkably dropped, at least here in Stuttgart found its climax with negative spectator numbers in '99. We reacted according to our possibilities. Consequently, we did not only carry out structural changes in our marketing strategy, which among others resulted in a new construction of the spectator stands, as well as in changed attractive price structure. But we also approached the youth to bring them closer to the tennis sports, whether it was through practice sessions with players in clubs or schools, or through fan activities which had an overwhelming feedback. However, this was only possible because many of the top players being now for the first time more open than in the recent years, and by them agreeing to give, for example, autographs or talks with their fans. This never happened before. Therefore, overall, positive impressions for the organizers prevail. Also because the first time within the last five years the negative trend of spectator numbers stopped. We actually have an increase of nearly 10% in tickets sold, amounting to a total of this year 44,000 spectators. Repeatedly the question was asked whether Stuttgart will keep this tournament or whether it will take place in another city or another continent. On the basis of this week's negotiations, we are pleased to announce the following: After clearing open questions, the parties to the agreement have concluded a contract January for the period 2001 to 2003. The lawyers of the partners were asked to finish the contracts for signing. Finally, I would really like to thank again our sponsors, especially EUROCARD, for more than ten years of more than cooperative partnership. I wish you all an exciting final. I would like to say bye-bye, and I hope to see you all again next year at the Tennis Masters Series Stuttgart in the Hanns-Martin Schleyer Halle. Thank you very much.

MR. TIRIAC: Well, Mr. Hendrikx talk about brand awareness, brand sympathy, about history, about numbers, and so on. About brand awareness, I just want to say that the Tiriac brand awareness has over 100%, because some people know me twice. The brand sympathy I am not so strong. Anyhow, it's a long time? It's a really long time. If I count it rightly, it's 12 years, if I count correctly what it was. Demonstratively, I am not going to give you back my EUROCARD, you know. You give it to me, and it's gold. I never pay. I mean, I charge every day with it. Please, take a card like this. You charge every day, but you never pay (laughter). It's beautiful. I wonder if that's going to go another 12 years from now on. By the way, I bought an airplane yesterday (smiling). Besides every joke and other things, it's not easy to find somebody, because not all the time is milk and honey. We had unbelievable times. Of course, going back to Boris Becker, Steffi Graf, so on, momentum like that, you have it once in a lifetime. But sport in Germany was a way of life and still is going to be. Is no way that the Germans are going to forget physical exercise or sport or whatever. Now, such a global event, because if you like it or not, it become global. It's such a big event that, without the identification that we had before, is doing more difficult today. Is tennis going to disappear? No. Is second or third sport still, if you like it or not, after soccer and after Formula 1. We have less, what you call einschaltqouten (television viewing figures). You have less spectators this year probably. How long is going to take? Probably as long as another year or two or three until is going to be stabilized. You have to remember that in 1984, Hamburg still had 12,000 spectators, and the high-ranked German was about 50, performance being 50. But coming back, I believe that we've been the smallest tournament of the nine the whole time. But on the other hand, we've been the highest tournament of the nine the whole time as a quality from every point of view, even before your Super 9 or Masters Series. We invented almost everything. We invented the ranking points when ATP invented the tournaments, single weeks, double weeks, so on. We were the first to jump with the prize money to have over $2 million prize money. We had more than one tournament in one year, our sponsor played with us. We had it in February, then we could have the big tournament in fall. They play with us. For that thing, I'm grateful. Nobody died yet. I think that everything is fine. It's a fact of life, Austria and Germany, Muster is somewhere in Austria flying helicopters. Becker is doing Internet and other things. Beautiful for both of them. Without Muster, Becker, Tiriac, Steffi Graf, somebody else, sport is going to go ahead. That's what we expect here. It is going to make a big impact and a difference if this site can have six tennis court for an indoor tournament. Is going to be the only site in the world that is going to have six courts if the new hall is coming. Two here, two there, and the other two. It's an indoor tournament made for ten days, men and women, so on. With six courts, we can do it, no problem. Is the place or not? We are going to see. Yes, we have an agreement. I understand they have an agreement. How they are going to go forward has to be seen. Are the Super 9 or the Masters Series working? I believe they are. I believe not only they are, but I believe that we are not realizing how much they working. When you make the bookkeeping of points, the bookkeeping how everybody's qualify and who's going to play in Portugal, you realize that these nine are the qualifying factor. I mean, I'm not going to compare myself with Grand Slams. I didn't want it, I don't want to. But go back and see who qualifies for the Masters Cup and in what segments, then you are going to realize if the Masters Series working or not. I believe I ask you to have your question addressed to any of us. We are not so rich like the Messe here or like the City of Stuttgart. We are just workers. As workers, we make a little gift to EUROCARD, to Mr. Hendrikx, who is something that say thank you. This is the history of everything that started 12 years ago, around 12 years. And if you want me to use your card, be careful, you better make it 13. I thank you again. I thank your people for supporting us for such a long time. Thank you.

(Presentation of History of EUROCARD in Stuttgart.)

MR. HENDRIKX: Thank you very much.

MR. TIRIAC: It's not a lot, but I think it's different.

MR. HENDRIKX: We have a gallery of events. This will certainly take a very nice spot in our offices. Thank you very much. Very thoughtful.

MR. TIRIAC: Mr. Gunthardt, questions.

MR. TIRIAC: I expect the question. Slowly, slowly, now I am beginning to be specialized in press, in answering, since Sydney. I have so many things to answer that I am almost a specialist. Unfortunately, I cannot become a diplomat and Olympian, you know, slalomist. It would be only speculation to say any more than Mr. Heldmann say. The tournament is going to be here next year for sure. It's an agreement that has to be signed. It was not signed. It has to be signed. For 16 years, both parties has a good enough word and handshake to keep it. I believe still that the trend of tennis has to change in globalization, not only Asia, but I believe that South America at one moment or another is a space for something that cannot be only United States and Europe. It's South America, is Asia - depends where you consider Russia, is in Asia or Europe, whatever. It's a huge market. Which Asia? It's Hong Kong? It's Shanghai? What is it? But is there. I say it in '85, I'd be interested to make another players. I think I had a little bit input in a new player that came in '85. Might be an interesting challenge to do even another thing, except what we doing here in Stuttgart. That's all I can say.

MR. TIRIAC: I am not close at all of going anywhere next year.

MR. TIRIAC: My English is not that good, I apologize (laughter).

MR. TIRIAC: I don't think that the EUROCARD was allowed to go. I don't think the EUROCARD is allowed to come. I believe that each of them, they have a certain moment in time, certain prerogatives or certain direction to go, certain goals. I mean, we talking EUROCARD. For me is very logical that is called EUROCARD in Europe. Why the hell you change the name? That's beyond my comprehension, I don't want to speculate on that. But look at MasterCard, it's a global player. Look at Visa, it's another global player in another direction of sports. I don't believe that MasterCard or EUROCARD, whatever, are going to disappear from sport, and eventually not from tennis. The flexibility they showed this year, not being a title sponsor, but being presenting sponsor at both tournaments, so on, I believe that EUROCARD did whaat they had to do in Germany. I don't want to go into the finances of Mr. Hendrikx and his private kitchen, but after 12 years I know enough to know that Germany paid for this tournaments, and they were worldwide, and only came from the budget of Germany. I'm not going to speculate what's going. Coming back to the story, I make a bet with you. If ISL can keep it another two years like this, they hit the jackpot. One positive thing is that they say, "I'm not going to throw it out and sell cheap. I think has a value, I think that's the value." They struggle here and there maybe. I am not an insider there. But on the other hand, it has a value. I mean, who in the hell would have thought ten years ago that we discuss for $1.2 billion. The bookkeeping of this tournaments were $1.2 billion, spread here, there, and there. Now, you can put it together, globalize it and copy Mr. Eccelstone? I believe you can. Mr. Eccelstone going to 25 weeks a year. I don't think goes to 18, and even 18 is too much. I don't think that we should go harder than that. But I think if they can keep it, I don't know. Is their problem, not mine. But I believe in the system.

MR. TIRIAC: What's first, the egg or the chicken?

MR. TIRIAC: I don't know. You tell me. The only intelligent tournament I saw in the last ten years was actually Roland Garros. Roland Garros say, French Open say, Television money in Europe, I give it to you, I have it on the screen everywhere. Was inflation, complete inflation. Germany was obscene number, hundreds of hours. Wimbledon always lost. Look at Wimbledon this year. Look at Wimbledon next year. Is not only Masters Series; it's tennis generally. Yeah, I would do otherwise if I would be the boss. I would be Donald Trump or somebody else with that money. But these people are business people, are working in sports since the ball was invented. They do World Championships, Olympic Games, so on. The money's money. If somebody's going to pay the money and is going to have less exposure, probably they are going to do it. Is the sport stronger enough to live with limited exposure for one, two, three, four, five years? I believe it is. But is that good for sport? I believe is not. But that's a private opinion. Is not the opinion of the specialists.

MR. HENDRIKX: It has worked for us very well. If the conditions were right, we would have had a look at it again. The expectation of ISL is to get a global brand into the system. We have the situation that we have a EUROCARD in Euroland, and we don't want to go MasterCard in Euroland. That is our position. We believe that the new currency in Europe plays for us extremely well. That's what we stick with. We are a little bit, I think Charles de Gaulle said, between the dog and the lamp post on this one. If the conditions were right, yes, we would have stayed. They were not, and we can't satisfy all the criteria.

MR. HENDRIKX: Same position, exactly same position. We did Hamburg this year, which is a wonderful tournament. You know it, of course, much better than I do. We won't be next year in Hamburg either.

MR. HENDRIKX: We have discussed it for three years, and for some reason we couldn't get it organized. It was my idea three years ago, I put it on the table, and it wasn't taken up. We have to make our plans. Three years is a long planning horizon, so that is that.

MR. HENDRIKX: No, I think it's the organizer's decision not to follow up with the technology.

MR. HENDRIKX: ISL was not on the table three years ago.

MR. TIRIAC: I can comment, but I can comment only on the philosophy, not on the technology. Technology is there. The technology was not perfect three years ago. The technology was not perfect five years ago when they start with it. We are the first ones ever to learn from the Lagardere Group, the first group that make that, then another group, and young men, used to be younger when he start looking at that. We work from A to Z. Then the cost those days were in hundreds of thousands for one camera to get it all around, hundreds of thousands, not of lira, but of dollars, was not applicable. Then was not so perfect and was almost like prostituting, you know, putting something. We always been very careful with an image. To be honest with you, remember that, we change colors, we put the color of the court, the color of the banners, we did everything with camera and television. We didn't want to ruin it at that time. Now, where is ISL today? The technology is much, much cheaper, much better. Probably you can do it all around the world. I would not wonder if you have BNP in Paris, CitiBank in New York, Shanghai, Hong Kong Bank in Asia in the future.

MR. HENDRIKX: Exactly.

MR. TIRIAC: Probably that would work with EUROCARD and MasterCard, for sure, for sure. My question is, if that's the case, why doesn't work today in soccer?

MR. HENDRIKX: It does work in soccer.

MR. TIRIAC: You are a big player in soccer.

MR. HENDRIKX: It does work in soccer. I was at the last Wembley match, England against Germany. When I saw it on TV, I thought it was in a different stadium. So it works.

MR. TIRIAC: Beautiful.

MR. TIRIAC: Everything is ISL. Everything is ISL whatever is television. Marketing is ISL. We are only guys. Then again, of course, we are very worried of the equity that it's in the thing. In two weeks, three weeks, you guys are going to be in Portugal. I wish I could be. Probably I won't be. But I would very much like to see where we stand with what we did for four years. We work, and that was not unfortunately the profits monetarily that we expected for us, not for the other entities who took their money, the events. We increased the equity in that event 400% in four years. Every year almost geometrically. It's a huge equity, but that equity was linked on the television exposure, you're right. So it's a mega event. I just hope it's going to continue like that.

MR. TIRIAC: Until now I didn't find anyplace to pay me, unfortunately. I was the only guy that I pay. Every time I had to pay. Man, oh, man. From Hannover to Stuttgart to Congo to everywhere else. Is not charity. I am talking philosophy. I am talking philosophy.

(Mr. Heldmann wiping tears from Mr. Tiriac.)

MR. TIRIAC: I am going to punish you, be careful. The story is philosophy here. You have the hardware to do a big event. You have it. I believe that the future of these events is Indian Wells and Key Biscayne. Whoever sold those events, I believe does the future. The hook to the Grand Slams, four, five, six, maximum seven events like that. That is the future of prime quality of tennis. After that, this tennis we going to pull all the other ones. The times when there were 80 tournaments, all of them, the World Championships. Bucharest would say, "I am the biggest tournament in the world." A promoter would say a million and a half dollars when the ticket is 25 cents. When you're still 400 million, you have a million and a half to throw it to the tennis, as well. When you have to work, the $250,000 is a little different. That tournament, even with $350,000 every year is losing a huge amount of money, in hundreds. That's charity. That's just goodwill. You don't find that much goodwill all over. So those events, in my opinion, should be local events, normal events. Who wants to play, please come play. How many points? Ten points, five points, three points. Give something. Accessible, acceptable local market. I mean, no joke now. Ion Tiriac Bank was the first bank that delivered the EUROCARD in Romania. Yeah, we have EUROCARD. We have about 20,000, 30,000, 40,000. We don't have two million. The day we are going to have two million cards in Romania, then we are going to have a tournament for $3 million prize money and EUROCARD is going to sponsor. If not, the bank is going to sponsor. It's not there, the markets. Coming back to these big ones, I believe that you have to find where you have the possibility to have 7,000 here, 15,000 there, 2,000 there, 1,000 there. Then when you have two halls, four halls, five halls, if it's indoor. If it's outdoors, that's even better. Without speculation, that's the case. Thank you. You have to eat fast, we have a final.

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