HOME DEPOT CHAMPIONSHIPS

October 11, 2002

Udo Cervellini

Tim Leiweke

Kevin Wulff

KEVIN WULFF: Thank you, very much. First of all, thank you for coming, and thank you for covering our Tour and, obviously, our year-ending championship. We certainly appreciate it. What I would like to do is just to kick off the press conference, and I'll soon be introducing some comments from our good friend Udo. What we would like to announce is we have agreed to a four-year extension and, actually, a four-year agreement with Porsche to be the North American presenting sponsor of our Tour. It's a very significant sponsorship. We're very proud of it. Strong brands attract other brands, and I really think the WTA will obviously prosper tremendously with what we view as one of the strongest brands in the world relative to performance and performance automobiles. Anyone who drives around Los Angeles, especially on a gorgeous day like this wonders that. The agreement is again a four-year agreement. It's a promotional sponsorship. It will be, obviously, a continued, very strong presence as a sponsor of the championships. I think, in time, the activation of that sponsorship will be very exciting for many, many years to come. In addition, we'll continue to have the Porsche Race Points Program, which again will be a very advertising-driven and exciting program as we continue to build that in future years. We have added a new element which will be the Porsche Player Patch Program. A lot of our great athletes in the world will be wearing a Porsche WTA patch, and again the players are very excited to be associated with such a great brand. Again, very extended commercial advertising program will also be a part of this relative to our United States as well as our Europeaan broadcast with Eurosport. Anyhow, we are excited and we're delighted, and what I would like to do is turn this over to Udo and have him introduce himself and make a couple comments.

UDO CERVELLINI: Thank you, Kevin. So we have a 26-year-old tradition and relationship with the WTA and it works very well, so we want to do the next step. The next step was the contract of four years with the championships in LA. We are very happy with this. The next step was the contract for a further four years in the original USA market. As Kevin told you, it's our main market in the world. For more than 50 percent we sell our cars in the States, and with television coverage, the print and media coverage, it's a good benefit for us. Porsche doesn't look at the benefits. They love the tennis and the players, and for this reason, we do the partnership with the WTA and the players. Thanks. Thank you very much.

TIM LEIWEKE: Good evening, and I want to welcome everybody to the Finals tonight. We want to just talk a little bit about our results to date and clearly want to make sure everyone understands the relationship that we have with the WTA. First, let me tell you we are very happy with the relationship we have with Octagon, our partner, and the WTA. We made a long-term commitment to this tournament. We're looking forward to it next year. There was never any consideration we would hit a homerun right off the bat. We knew this was going to be a work-in-progress, and as you've seen during the tournament, the crowds have grown. Clearly, there is room for improvement. Clearly, there are things we learned this year that we will be able to utilize now between today and the time we welcome them back next year. Clearly, those lessons are going to make this a better tournament for Los Angeles, for Home Depot and Porsche and for the players next year. We are committed to this tournament long-term. We plan on developing this and creating this as a true asset for tennis and asset for Staples in Los Angeles. We look forward to a very long relationship, and as this tournament grows, I think we'll see the same kind of attendance increase, same kind of awareness increase, that they saw in New York when they started this tournament many years ago. Kevin and the WTA have been good partners. We've enjoyed working with them. Again, we're committed to this tournament long-term and we look forward to growing this event each and every year.

KEVIN WULFF: I think from our perspective also, after our year in Munich and New York and again New York had a great season with our championships. It was not always perfect and not always well-attended, and I think anybody who's been involved in the sport of tennis realized we have great stars, we have great players. I don't think our stars ever have shown as bright as they do today. Any successful tournament relative to attendance and coverage, so on and so forth, takes time to build. We were delighted when AEG stepped up and replaced 50 percent of the partnership from Munich. In conjunction with Octagon, they've got a great history of building products, a great success record. We like what we've seen. We know we've got format problems. I think it's safe to say we have never had extremely well-attended events on any Wednesday or Thursday, whether it be New York, Munich and here. It is something the WTA intends to address in the upcoming month or so, to make sure we have a format exciting for the fans. We think what happened on Wednesday and Thursday, which again has happened in numerous years in the past, is unacceptable, and the format I think is as much to blame as anything else. If you have children, any of you who work, I think most of you do, and it makes it a very challenging situation. Anyhow, we're very pleased with the growth. It's taken off throughout the week, and I think personally, and I have been to over 21 tournaments this year, I have never seen a match like we have in the semifinals, to include the Australian Open finals, which again I think was one of the greatest matches of all time. We're going to have a great finals. We're looking forward to the future next year.

KEVIN WULFF: We're going to sit down immediately and to really kind of work through this and many other issues, but there has been a lot of talk about an 8- or 12-player round-robin, which obviously the 8-player round-robin is something the ATP has used effectively. I'm not going to say exactly what we'll do. We're going to sit down at our offsite location to come up with a program we think will be great for the rest of the world television, and come up with a concept that really sets these championships apart from the balance of our season. As the promoters of the championship, we'll obviously engage them in our thought-process and be getting input from them.

KEVIN WULFF: In our rule book, we will have the flexibility to look at those type of changes, and as we do in any major decisions that affect our sport, consult with a variety of player and tournament councils, and that will obviously lead into a Board vote, a teleconference Board vote, to develop some ideas.

KEVIN WULFF: This is my second championship. In Munich, it wasn't any better. To be quite honest with you, in terms of attendance the first couple of days, we had a lot of issues in regards to tennis in Germany and the September 11th we were struggling with. The format is a challenging format. I think there is great tennis fans in Los Angeles. I think we've seen that over the last three days or so. It's a challenging format. Here we have again -- I happened to see this match, and there is a lot of other matches I didn't see this week. We had Monica Seles and our hometown hero Lindsay, anyone of the great matches anyone of us has seen all year, from a technical standpoint and energy of suspense. I think there is a lot of fans who would love to see a match-up like that on the first day. I think the time of the year it's a challenging situation for us. It has been in New York, Munich and here.

KEVIN WULFF: To me it looks like over 8,000. It sounded like 12,000, which is what I think we're trying to sell this year. Is it acceptable? I think the first year, we were delighted. I think we were very pleased. And despite the article this morning, which was a little bit disappointing, I'll be quite honest with you, I think it was a great turnout. The fans saw a great match. As we talked about our expectations when we had our Board vote in Miami, we had six months to put together a product, and we think we have great promoters, we have one of the world's greatest venues. Our players loved the week, loved the hotels, loved the Staples Center and loved the production. We think there is just tremendous growth, and when you look at where we are and where we're going to end this tournament, obviously, in a very challenging year last year, we're going to do much better. As Tim mentioned, there is no reason why we're not going to grow this similar to the way it was grown in New York. This is a great tennis market, great sports fans. This is one of the rare tournaments. I would even challenge all the Grand Slams to say they've got a field like we have here. I wish these quotes would have been used more. I saw some of the transcripts. Serena talked about how this is another Grand Slam to her. You saw Jennifer play. You saw a lot of Jennifer's comments. She really viewed this as a special, special tournament. This is not a normal tournament. This is the championships. I think the fans will come quickly, and I think our partners will, obviously, do a great job in the next 12 months.

TIM LEIWEKE: We're going to make sure it doesn't rain next year. We've already made those arrangements and commitments to Kevin. I think one of the issues we had is we need to devote a full-time staff to this. We tend to have, like a lot of other people in LA, Attention Deficit Syndrome. We need to get more focused by adding a full-time group of people that do nothing more than work on this tournament. Clearly, the day sessions will be treated differently next year. The ability to lock in blocks of tickets to the downtown business community is going to be a much larger priority next year than it was this year. Not having 12 months in advance of this tournament to sell sponsorships was a hurdle. We're already working on it. We're glad to hear Porsche is coming back and we're dedicated to getting this better and better. We're going to work aggressively with Home Depot. New sponsors here tonight seeing this event for the first time, we expect to incorporate into the event next year. We at Staples didn't lock these series tickets into our premier seats or our suites. We will next year. We're going to have a larger base, no matter when the events occur during the course of the tournament. There have been learning lessons on our part, a few mistake we made going into this that we won't make next time. I think from a promotion, media group, sales standpoint, we will be much more aggressive, because we'll have a group of people, 12 months a year, every day making this a world-class event.

TIM LEIWEKE: Obviously, we'll spend more money on the newspapers. We understand obviously --

TIM LEIWEKE: We're going to spend more money in radio. I think overall, promotionally, we're going to do a better job. When we put the series tickets on sale, we did very well. In fact, probably as well as they have done in a long time. That gave us a false sense of comfort. What happened when we put the individual tickets on sale, we realized there wasn't as much momentum as we had. LA is a very competitive marketplace. It's a very big marketplace. It takes a lot to get people's attention, and it takes a lot, once you have their attention, to motivate them to buy. We need to put more of an effort towards an advertising promotion campaign next year. We also didn't have anyone working the tennis community on a day-to-day basis. That will change. We are going to have a group of people that do nothing but work the tennis community on selling those subscriptions next year.

TIM LEIWEKE: No, it's here. We're committed to keep this long here. I produced this great weather chart for Kevin four or five months ago showing the weather patterns in November, and I guess I cursed us.

KEVIN WULFF: We were saved by the dome and the roof.

TIM LEIWEKE: That's exactly right. We have other plans for Carson. I think you're going to hear about those in the near future. We're excited about the events that are coming there for the tennis stadium, but this is the right event for Staples Center during the time of year it occurs. This is the right place to host this event, and we're going to continue to make a commitment to host it here.

KEVIN WULFF: Yeah, I think, you know, for a lot of you that have covered a lot of great championships and season-ending Super Bowls in the States, players are hurt and tired, but the players always step up when you've got the championship on the line. I think it's safe to say every player that came in here gave it their best effort. Again, I've seen some matches where, if you know tennis, and I'm no complete expert, but the 21 tournaments I've seen, the level of intensity was great. I think, yeah, our players are very honest, and like in any sport, any season, it's been a long season. I think our season is very long. They do take breaks. They do have situations where, you know, it's a challenge with regard to time zones. Even our last tournament being in Australia does create a 9-hour time zone situation which creates some level of fatigue. I think the winners didn't talk about the fatigue quite as much as some people who didn't make it into the finals today. It's safe to say every sport has fatigued players. We're continuing looking at ways to enhance the calendar and rest weeks. Overall, we're very similar to a lot of other sports. It's a long season. They're great athletes. They train, they practice, they do everything it takes. They do a lot of performing for us. We have had tremendous PR success. They do a lot of off-court things that are great. They are great athletes and they all stepped up and did a great job.

KEVIN WULFF: Yeah, I think after two years in Houston, and we continue to have good discussions on a wide variety of issues with the ATP of how we can build the sport attendance and how we can work together with other governing bodies to include the ATP. We have talked about it. I think with the right financial model that allows it to build and allows a sponsorship brand as a whole to be built. I think there is interest in continuing to talk about that. Obviously, they've got obligations, we've got obligations, and probably one of the most commonly asked questions, are we going to have our sponsorships combined some day? I think it will be great for tennis.

KEVIN WULFF: We hope to have more announcements with other categorical type sponsors. We really wanted to deliver some of the strongest brands and marketing companies in the world. That's why we kicked off with that. In terms of the title sponsorship, our primary strategy is the regional presenting sponsor strategy concept. We're continuing aggressively working on the other parts of the world to include Europe as a region and the rest of the world, primarily Asia-Pacific. We're getting great response. More people will hear about this. I think it will be very exciting. As I mentioned earlier, strong brands would like to be associated with other strong brands. Porsche is going to be one of the greatest assets the Tour is able to secure. Yes, we're focused on regional presenting sponsorships. There is no current plans to pursue and aggressively secure a title for a strong brand situation. We felt we could continue to build our WTA brand.

UDO CERVELLINI: At first we speak about not the normal tournament. We speak about the championships. We have the best product in the world, best players in the world, but you cannot see these players maybe in the Grand Slam tournament the first week. You see the No. 3 against No. 70 or like this. And you have the best venue in the world, and we don't play with 20,000 spectators because the venue is flexible. They reduce it to 12,000 because this was the wish to start with not too much. And what we want and what we heard, we want to promote and we have a lot of ideas to promote the tournament better and better, and then I think the spectators will come in.

KEVIN WULFF: Yeah, I think one of the things we even talk about in our mission statement is we want to reinvent this great sport day after day, and every single day, part of reinventing our sport I think is broadening our support. I will say one of the most encouraging things I've seen is the level of diversity we've seen in this audience. The crowds have been animated and very diverse. I think broadening the sport of tennis is great, and we're very proud of it. It's one of the reasons we're out here. I mean, the championships have not been in Los Angeles for literally over 30 years. We've gone from $100,000 in prize money to $3 million, and what's also very exciting is the great diversity and new fans. When you take a risk like this, the risk is definitely worth it when you see the great audience and all the new fans are getting a chance to see these great athletes. Believe me, I think equal to or sometimes better you're seeing 16 of the greatest singles and 8 of the greatest doubles players playing in the art of tennis. We're very pleased.

KEVIN WULFF: Yeah, I don't think we've decided that. There is still a lot of work. We're getting a lot of questions. We have had a lot of our tournaments here also. As any NBA team owner, you have two of them here, and you always get at lot of great ideas from the staff. We've bounced around a lot of great ideas. We've got to look at television, as any sport does, but we'll look at some modifications and I think a format that will achieve a good European television objective as well as really an objective that fits the fans so the fans aren't missing some great matches and a little bit more conducive. I know I didn't answer your question completely, but the early day sessions are a struggle. We are going to do everything we can to fix that.