AUSTRALIAN OPEN

January 14, 2003

Lisa Grattan

Peter-Michael Reichel

Josh Ripple

Kevin Wulff

KEVIN WULFF: To my far left we have Peter-Michael Reichel as our European representative on our board of directors. Also he is the tournament director for our Linz tournament. I think a lot of you know Josh Ripple, who's our COO of the tour. I think you all know Lisa Grattan, who is also a player representative on our board of directors. Let me just make a quick statement. First of all, we aren't going to take a lot of your time because we're all here for tennis - sorry to interrupt things. We don't want to dwell on this too long, especially after some of the great matches we've had yesterday and again today. So the myth that we don't have great matches in the first round I think is somewhat dismissed after what we've seen. So let's try to focus on tennis. But I wanted to spend a couple minutes, since everybody kept calling me at the Grand Hyatt Hotel where we've been having meetings and planning meetings, that there's been a lot of inquiries and been some media reports that have been inaccurate with regards to Josh and I and our future with the tour and kind of what's transpired with the tour. We thought it would be good just to spend a couple minutes, if there's a level of interest, to try to clarify that and make sure you have kind of an accurate representation. With regards to myself, as the statement here indicates, I've informed the finance committee of our board after I came back from the holidays that I'm contemplating for family reasons, but also professional reasons, looking at another opportunity. I had to make up my mind. I think the board's been very supportive in Los Angeles kind of at our year-end review in terms of our performance and what we're working on. "I need a little bit of time" and "What do you think?" So we've had some good discussions and some compelling, I think, reasons to stay and some great things we're working on that aren't completely finished but we made a good start on. Quite simply, I'm going to make that decision probably no later than the end of the Australian Open. And for a quick statement or whatever, since this thing seems to have gotten spun around in the press, I'll make sure I inform everybody. But that's what occurred. As it relates to Josh, I'll let him speak for himself. We've been talking for quite a few months in terms of what he would like to do in terms of his latest contract which did expire at the end of this last year, his interests and what he wanted to do. I'll let him comment on that at this time and let him tell you exactly what his thoughts were.

JOSH RIPPLE: Thanks, Kevin. Yes, Kevin and I had been in discussions for several months with regard to future with the WTA, in the current role or in other types of projects and opportunities. It just so happens from a timing standpoint that this seems to be somewhat coincidental, but in actuality we had come to a decision and we informed our board and we informed our staff that I would be actually at the end of my contract, going back to Los Angeles where I came from before being or joining the WTA, and that's what we planned to do. Kevin and I have agreed, and the board has also agreed, that I would stay on with the tour for a minimum of six more months as a consultant and work on a lot of projects that we currently are in the midst of doing, a lot of hard work with not only the two of us but many of the people on our staff. We'll continue to work with the WTA in whatever projects we have going over the course of the next six months and we'll then talk again to see if there is anything more that needs to be done or wants to be done by myself and the WTA. So it just so happens, and Kevin and I just wanted to make it accurate here, make an accurate statement, as it relates to Josh Ripple, I had made a decision that I was going to leave the WTA as its COO, as an employee, but I will be remaining with the tour as a consultant and will be doing that for the next six months.

KEVIN WULFF: We'd announce that in early December to our leadership team and our leadership team staff meetings and then sent out, right after the holidays, a notification via memorandum to our entire staff. So, again, we're pretty darn excited. I mean, you can't replace Josh. It's difficult to find the experience and the balance of player/tournament, and Josh is going to focus on WTA commercial, and assuming we move forward with that, in our board discussions tomorrow, Josh is going to play a critical role there, of helping that get up to speed, continue on with a lot of the COO roles, helping the transition. We're pretty darn excited to have Josh for another six months to make sure we, as most organizations, that we have an orderly transition. We've actually had a good year, probably have tried to do too much. I think some of the good things that had happened, some of the things that we're really proud of, we are going to end this year as probably in terms of recent records that we keep, as one of the strongest financial years we've ever had on the tour. One of our four goals was to really get our financial house in order since we were in a difficult situation as we ended last year. So this is our greatest year in terms of profitability, and our greatest year in terms of revenue. It gives us a nice cushion of reserve so we can continue to explore new opportunities and ideas that have come forward and have some flexibility for rainy days. I think all of you know in the sports industry, what's going on in the United States, for example, with women's sports, with the WNBA and four teams either calling it quits or trying to sell their franchises, some of the losses in women's professional soccer, and the fact that we've been able to increase prize money again this year, especially with our Tier I tournaments and our bonus pool, just a lot of positive momentum continues with the state of our sport, attendance, TV ratings, we've had some great highlights and set another record in attendance. We've been able to, in a very difficult environment, realizing the notifications last December with Bart and I, as we were making our tours, that we really had to start from scratch with sponsorships. We had a challenging situation with our championships. We had a challenging situation with our television contracts. So we've been able to bring in, you know, close to $20 million in new sponsorship over the next four years, which is an unbelievable foundation with great sponsors like Porsche and brands that we can really be proud of and help us market and build our tour. We've been able to restructure and extend our television agreement, which is our primary source of revenue, for three additional years in the range of $40 to $42 million. We're very excited about that. And, obviously, we had a situation, and our promoters who owned the rights to our championship for six years, came to us and were looking for a new situation. We evaluated that. Moving that to Los Angeles, I think, as any move would have been, is going to require a lot of work. But we've got two groups, Octagon, EEG, who have the financial wherewithal, the talent to really build our championships into something we will eventually be proud of. Like any other tournament, and Michael knows more than anybody here, any tournament is going to take some time to build. I think we've got the great team in place. We had some good momentum. We increased ratings quite a bit from a relatively low base of 50 percent. We were up about 60 percent in attendance from the prior year. We have sponsorship we're able to activate with ticket give-aways and promotions that would bring more people in. We had around 55,000 people, and they're all paid, we need to build on that dramatically, a lot of things we're going to work on. I can guarantee you our promoters, who have rights to this event for the next six years, are sparing no effort to try to make this what we all think we'll be very proud of. Amongst a lot of other things, in the new agreement, there are some other things that we're still working on. But we kicked off with regard to building our brand, our first-ever advertising, and working with our tournaments to continue to build on that momentum with a consistent brand and tournament look and advertising across the tour. So a lot of great things. I think everybody on the board, everybody on our staff, if you brought an outside consultant, I think they'd agree we're working on the right things. We're complementing our governance and our service with creating consumer demand through a lot of the initiatives we're working on. And in the future, I think with a lot of our new team we've brought in, some of our new skill sets, next year it's all about execution and taking it to the next level. We're pretty excited. I think the board's pretty excited with the progress. Yeah, we've done a lot of new things, we're trying a lot of new things. I think overall people have been responsive and I think we can build on that. So with that, I'd just like to throw it out for questions, any questions for our two board members who are at the Open, and Josh and myself, we'd be glad to clarify things and get back to tennis.

KEVIN WULFF: Yeah, I think we're concerned about it. I think also some of the mis-statements that have been reported are even more damaging to the tour. I think it's safe to say that we built a really strong bench, you know, we brought in some new people with skill sets. Whatever I do will be -- if I should make a decision, and I think there will be extensive transition time to make sure, like in any business, you are going to make sure your I's are dotted, T's are crossed and things are running smoothly. I think we all felt that it was just taking a life of its own. The time that was being devoted to it with our staff and the inquiries and all that kind of thing, let's just nip in the bud and get the true facts out and tell it like it is. This is exactly, you know, kind of what's occurred and what is occurring.

KEVIN WULFF: To my knowledge and our board member's knowledge, there's no truth to that. I think the support from the board's been good. I think one of the things I have brought, I think it's been exhibited in a lot of our decisions and votes is I bring a very neutral point of view. As in any vote, there's winners and losers, but I think overall, I think everybody's been pleased. I think in Los Angeles, kind of our year-end review, we received a strong show of support. There has been no board meeting, discussion, or anything to my knowledge with regards to either Josh and I, and there's definitely been no board mandate to push either one of us out, and I think a lot of the board is just being apprised of some of the discussions that are actually factual in terms of kind of the discussion I've had with the finance committee.

KEVIN WULFF: I moved my family down in a rental home, and over Thanksgiving. I mean, Florida is great. Our goal, obviously, is and for the family, you know, we would like to get back to the Northwest. I'm not going to say that's not the case. But I think overall, it's a lot of things that everybody considers, you know, the right opportunity, is this the best opportunity for me, is this the best opportunity for my family and myself? You know, where we're located is a part of that equation, but it's definitely not the overriding part of that. We've enjoyed Florida so far, and our kids are in school. They go to the beach every day and can't determine if they're on holiday or if they're living here yet. So far, it's been fun. So no major issues with Florida at all.

KEVIN WULFF: Yeah, we're very proud to announce that we're moving a tournament to Shanghai in 2003. It's one of the things we voted on at our board meeting. So the Tokyo tournament in the fall is moving to Shanghai, and we think China is one of the great opportunities. I think the men's championship is indicative of the support of tennis. We're really excited to be bringing our Tier II A-level tournament to Shanghai in 2003. It will be in the same week as the previous Tokyo event.

KEVIN WULFF: Yeah, those conversations are still so out there, even talking to Geoff Pollard last night. I mean, there's numerous commitments. We'll meet again on the second week, Thursday, as we normally do, and provide the Grand Slam committee with an update on ourselves and them an update with us. We'll have a brief discussion. But I don't think anybody feels it's imminent. I think some of the comments were a bit premature and I don't think anything has been formally decided, discussed. Again, I think it would be a more of a long-term view, and is something we'll definitely get updated on and have a point of view at the appropriate time.

KEVIN WULFF: I think it would take some work to obviously change. We'd have to work with our tournaments and make sure that if it is a consideration, and something they want to talk to us about, that we can make the changes and move some of our tournaments. Obviously, some of our strongest tournaments are in that time frame, whether it will be a benefit. There's a lot of reasons why it would be, to moving them a little bit earlier, and there's some negatives. Once we get a few more details, again, I think it's more of a longer term strategy and discussion, we can respond to that.

KEVIN WULFF: Yeah. We, as I mentioned before, for the first time are having great synergy conversations with the ATP. While a lot of the topics aren't as sexy as combining our championships, we have talked about it. Obviously their obligations, our obligations would mean we really wouldn't be able to do it until at least 2005. It's not on the front burner but it is conversations. We've been spending more time with how we make our IT resources more effective and can save money to all those unsexy type topics. But we have a wide range of things just from a day-to-day and little longer-term things and we're having some great meetings. We do talk about it, but obviously with each of our obligations, it's a little further away.

KEVIN WULFF: Yeah, we have had, immediately following -- I think it's safe to say our format has been a challenge since the last three years in New York as we went to Munich, then Los Angeles, that we're never going to get a lot of fans with the number of sessions on the Wednesday, Thursday start like we had here during the day and so on and so forth. It hasn't worked for a long time. It's not going to work. We made a very comprehensive recommendation that Lisa and tournaments have been a part of the process. We're sharing that with the players, getting their input and some of their thoughts and we're going to make a decision on that by the end of the Australian Open. But we are seriously considering a format change, and we'll wrap that up in the near future. We think it's just one of the components that will continue to build our championship.

KEVIN WULFF: There's some great things from their format and some great advantages. We're looking to some others; we're weighing those. As part of our process, working through Lisa and the players, once we get a greater consensus on that, we'll announce that. But it is one of the things we're strongly looking at, something similar to the eight-player, round-robin concept.