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SONY ERICSSON OPEN

March 27, 2007

KEY BISCAYNE, FLORIDA

THE MODERATOR: Good morning, everyone. Welcome to today's Sony Ericsson WTA Tour announcement. With us today we have Justine Henin, Sony Ericsson WTA Tour No. 1; Larry Scott, CEO, Sony Ericsson WTA Tour; Dee Dutta, global head of marketing of Sony Ericsson; Butch Buchholz, founder and chairman of the Sony Ericsson Open; Steve Simon, tournament board representative, tournament director of the Pacific Life Open women's event and tournament council chairman; Jie Zheng, Sony Ericsson WTA Tour player; and Lisa Grattan, Sony Ericsson WTA Tour player and board representative.
At this time I'd like to turn it over to Butch to get some opening remarks.
BUTCH BUCHHOLZ: For somebody who's been around this game for a long, long time, I just want to say congratulations to Larry, to the Tour. Not everybody agrees 100 percent when you start something like this, but I really want to applaud the vision and the leadership and the diplomacy of Larry and the board and the Tour.
It's not easy to take steps that are very controversial, and I want to say that I believe that the board and Larry and the players believe that this is the direction that the sport should go, and it takes a little guts sometimes to make that step.
It's always easier just to leave it alone, so I just want to compliment the Tour and you for making this all possible.
Again, still some work has to be done, we all recognize that. But it's a step in the right direction. Personally, I hope it's a first step in seeing the game get together and do more things together, more with the ATP.
You've heard this speech before, but I truly believe that this sport is going to be better off when we're all under one roof.
Larry Scott, congratulations.
LARRY SCOTT: Thank you, Butch. Thrilled to be here for a historic day to announce major reforms to the Sony Ericsson WTA Tour circuit, and it's very appropriate that we're doing it here at the Sony Ericsson Open on a lot of different levels.
Butch has really been a pioneer in tennis, and someone that's led the way with big events like this one. He had a vision for what big stages could do for the sport. He's been a pioneer in terms of men's and women's tennis and pushing for equality, and a pioneer in terms of pushing for unity in the game, which are all themes which are carried through here today.
Already it's been an amazing year for women's tennis. It's been a year of quality so far with Roland Garros and Wimbledon going for equal prize money for the first time in their histories. But it's also been a year of unprecedented cooperation between the different governing bodies in the sport and the different stake holders in our world.
In this room today we've got representatives of obviously our sponsor, of our top players, of tournament directors from around the world. The different agencies, board members, and this process of developing the Tour's roadmap 20 10 has taken three years, and it's required an awful lot of consultation, compromise and shared vision amongst a lot of different people.
So I'm absolutely thrilled to be here today to announce that yesterday, the board of directors of the Sony Ericsson WTA Tour approved the Tour's roadmap 2010 plans. These plans have been in development for over three years, and they represent a dramatic reform in the way the circuit will be structured and in a way which will drive much greater popularity for the sport, improved fan experience, and will unlock a great value for the sport, which many of us have known for some time has untapped potential. This plan will help tap it.
The cornerstones of the plan include a healthier schedule and season for the players. What that will entail is a shorter schedule, so we will go from a seven-week off season to a nine-week off season. The Tour Championships will end in October for the first time in a very, very long time.
It will also be a healthier calendar during the Tour season with the number of player commitments being reduced down to ten and the placement of our events making a lot more sense in terms of the players' schedules so that the schedule of the future will not force on the players a situation like we have today when they're over taxed and we have the level of injuries and withdrawals that we have.
So the health and well-being of the players has always been our No. 1 priority, and finally we'll be up to deliver against that in terms of the structure of the Tour and the expectations in terms of what the players need to do.
An additional cornerstone of the plan is a streamlined number of top events. Currently we have 26 top events, Tier 1 and Tier 2 events on the Tour. From 2009, the premium tier of the Tour will be down to 20 tournaments in all the major geographies around the world. The list of tournament cities that will make up this premium tier of Top 20 events is up there.
But the cornerstone of these 20 events will include four mandatory events that all the players will be at, led by the Sony Ericsson Open here, which has really led the way in terms of this model: Men and women together, two-week event.
The Pacific Life Open, which is represented here today, a similar model. In Madrid we will -- Madrid will be the third of these events, and you'll see pictures of an amazing new facility that's been built, the Caja Mágica in Madrid, which will be the host of one of these four crown jewel events. And the fourth in Beijing, China, which is a very exciting investment for us in China to have one of our four crown jewel events be represented in such an important market, such a big country.
China is critically important to the future success of tennis. Tennis is lucky to be one of the truly global sport circuits in the world. The rise of our Chinese players led by Jie Zheng, who I'm thrilled is here with us today, and Na Li who's actually playing right now, and some of their colleagues has been some of the most exciting stories in women's tennis. To see the development of tennis in China is something that all of us in tennis have been very proud of.
With the Olympic games coming in 2008, we couldn't be happier that Beijing hosts one of our four crown jewel events.
And along with the ATP, who today is announcing that one of their Masters Series events will be going to Shanghai, together we have agreed on a coordinated approach to address the Chinese market in a way that we think is very exciting. Both Beijing and Shanghai are going to be represented with the top level events in professional tennis, and we're going to -- now that this first level decision has been made, we're going to be discussing ways that those events could be coordinated and combined perhaps in some way in the future.
We're going to see record prize money on the Tour. There's going to be unprecedented investment, not just in new facilities, we'll have over $200 million in development in new facilities amongst these venues and other new venues on the Tour for 2009, including a new Olympic tennis stadium in Beijing, including the new Caja Mágica in Madrid and other facilities.
But in terms of prize money, Tour prize money is going to be going up by 30 percent from 2008 to 2009, and that's going to take total prize money, including the Grand Slams and Tour events, up to over $70 million in 2008. So that's a very sizable jump in investment.
There are going to be enhanced rules and systems to ensure that fans get to see the players they want to see, and that these events can be highly successful for the sport. The players deserve a healthier schedule, a longer off season, reduced commitments during the year, and we believe our fans deserve to see our top players playing together more often on the world's biggest stages and being able to perform at their best.
So underpinning that will be new systems, including suspensions if players are unable to meet their commitments and aren't legitimately injured, that will help reinforce that as well as these financial incentives at a level we've never had before.
And those are some of the cornerstones of the plan. You have all the details in the press release that you have there. But without further ado, I'd like to turn it over to the Sony Ericsson WTA Tour world No. 1 player Justine Henin.
Let me just mention, I think women's tennis has been very lucky to have great leadership amongst the players, and Justine is certainly amongst that class of players at the top that I've relied on very heavily for advice and counsel and involvement and engagement. Some of the progress that women's tennis has made over the last few years certainly wouldn't be possible without the active engagement of our top players and their openness to change in support of it.
Justine has been amongst that leadership, which I really appreciate.
JUSTINE HENIN: Thank you, Larry. I'm very happy and very excited to be here with you today for this big, big announcement. It's going to be a new perspective for the players, for the fans, beginning with the roadmap in 2009. It's going to be, I think, easier for me to fill out my commitment, less tournaments, and healthier calendar, so I think it's going to be better for everyone, for the players. I hope we can play all the tournaments we are committed to play because we're going to be healthy, because we're going to have a longer break, which is very important to us.
We kept fighting a lot and discussed with Larry and the board to have a longer break in the winter, so I think it's great. It's great news. Like Larry explained, the fans deserve to see the best players in the world in bigger events, so we are all very excited about that. Two more years to wait and it's going to be very exciting for everyone. Thanks, Larry, for everything you're doing for the Tour. I hope it's going to be great.
I hope it's going to help women's tennis to improve again in the future, and I hope the fans are going to love it. I'm sure it's going to be a big success. I'm very happy to be part of it. I hope I'm still going to be on the Tour in two years (laughter) to experience that. I'm still pretty young, so good hope about that.
Yeah, I wish it's going to be a great thing for women's tennis in the future. Thanks.
LARRY SCOTT: One of the greatest things to happen to women's tennis has been Sony Ericsson, and they've been terrific supporters. The man sitting next to me has been a real visionary, and he's backed it up with a tremendous commitment, not just to the Tour partnership but titling this event.
You all have seen what's happened in terms of the makeover of this event, which is so positive, and many other great things happening around the world. I don't think we'd be here today, and I'm confident we wouldn't be here today with the momentum and the support to make these changes if we didn't have the active engagement and support of our title sponsor, Sony Ericsson, and without the support of Dee Dutta. Thanks for being here.
DEE DUTTA: From our perspective as title sponsors, we are very pleased to see the reforms and the changes. We believed when we came into this sport that the sport needed reforms in terms of making it attractive to the younger users, who are the primary consumers of cell phones.
We also needed to attract more new sponsors to the sport. So on behalf of the other sponsors, we see this very positively. We think this is not only a fair system which balances the needs of growth of tennis across the world, but because it's a global sport we needed to see growth of tennis not just in USA but also in Europe and in Asia, and this new roadmap reflects that.
The other great thing is the growth of tennis in China. China is an important market for our business and for businesses around the world, and it's great news that Sony Ericsson WTA Tour will be making a positive move towards improving its footprint in China.
We made three promises when we started our sponsorship of the Tour that we'll improve the player experience. I think the WTA Tour has delivered on that with equal prize money, campaigning for it, fighting for it.
We said we'll improve the fan experience, and Sony Ericsson Open and Sony Ericsson WTA Tour continues to drive that. What we built here in Miami has been hopefully very positively received. The third thing was to improve the viewer experience. With a shorter calendar, better quality tournaments, I'm sure we're going to generate better viewership and better audiences for tennis around the world.
So I'd like to congratulations Larry and his management team and all the people who have been involved in this right through getting through the detail to create what is a great improvement for the Sony Ericsson WTA Tour. Thank you.
LARRY SCOTT: Thank you, Dee. Not only will we have one of our crown jewel events in Beijing, but starting in 2008 the Tour is going to open up an office in Beijing. This will be our first ever Asia Pacific headquarters.
It demonstrates our commitment to the Chinese market, to our players that are emerging from China, and it will give us an opportunity, coordinating with the ATP and the other bodies there, to promote professional tennis in China in a way we've never had before.
I'm thrilled that we have one of our leading stars from China, Jie Zheng, here with us today, and I'd like to introduce her and invite her to say a few words.
JIE ZHENG: Thank you. I think this is a happy day of women's tennis as a Chinese player. And extending a big event in Beijing, it is also extending the WTA Tour's office in Beijing. Thank you very much for the support for the China tennis.
LARRY SCOTT: Thank you. Over three years this has been a very inclusive process with a lot of debate and discussion amongst our tournament and player members, and this wouldn't have happened without a tremendous involvement in leadership from the board of the Tour.
Most of you know our board of directors is made up of elected player and tournament representatives, representatives from the ITF, and I'd like to invite our board representatives to say just a few words.
First, Lisa Grattan, who's the chairperson of the player council and a board representative representing the players. Lisa?
LISA GRATTAN: Thank you, Larry. As Larry mentioned earlier, part of this deal was major changes for the players and agreeing to do some unprecedented things like suspensions and some tough responsibilities for them. But they understand that this is what we need to do to grow the business.
I'm really excited, because after three and a half years of working on this we were able to come up with a revenue-sharing deal with our tournaments, and this was a cornerstone for us. So as the tournaments grow and prosper, which we believe they will, the players will share in that growth.
So this is linking player commitment to prize money for the first time, and we think it's the right step for everyone. It was a lot of give and take with our tournaments, and Steve and I battled it out in the room for a few weeks, but we were very happy with the outcome.
I'm pleased to finally see this roadmap come to fruition and look forward to much success with it. Thank you.
LARRY SCOTT: Now Steve Simon, who's the chairperson of the tournament council and also tournament director for the Pacific Life Open, one of the four crown jewels of the Sony Ericsson WTA Tour.
STEVE SIMON: Thanks, Larry. I think my comments should be short, but I think they pretty much echo with what Butch started with and what Larry started his conversation with earlier today, in that the process has obviously been a long one, but one of the reasons I think it's going to be successful and a good process is that for the first time.
I have to compliment the player leadership as well as Justine and Jie Zheng that are here, on their commitment to this. Because through this whole process that we've gone through, it has been a collaborative effort. It's been a balancing of the business issues versus the player issues, and coming up with something that we thought worked on both sides of the table for the first time.
It certainly was -- there are tough issues and there are a lot of areas that we have to agree on really to balance the business and the player issues well, which I think gives us a great foundation for success going forward and an ability to really grow the game.
Really my statement here is really congratulations to the Tour leadership, the player leadership, the leadership of Sony Ericsson, and really, all the other tournaments that are in the back of the room watching, because it was a big change for everybody. But I think we're really set up with a strong foundation for the future.
LARRY SCOTT: Thank you, Steve. Happy to open up the floor to any questions.

Q. On the delicate question of suspensions, a couple of questions: First, what are the length of the suspensions and under what circumstances? Two, certainly players can be diagnosed with certain kinds of injuries, but exhaustion is a difficult problem to diagnose. How do you do that? Will there be special dispensation for older players, players over 30 or approaching 30 who perhaps are not physically capable of performing in each of your crown jewels? And finally, you have two players who had issues at Indian Wells. Are they going to be suspended if they don't play there?
LARRY SCOTT: I'll see if I can remember all the questions. But the overall approach -- we approached this from the perspective of what's the ideal schedule for the players and the ideal length of season and how do we right size the season so what the players commit so they can play and not just be there but play at the highest level, which is what the fans deserve, and the tournaments and the fans deserve to see the players when they're advertised to come to the tournament. So that's the basic approach.
This roadmap 2010 has delivered a calendar and a level of player commitment that after a lot of consultation with players we feel all players can meet, and we will have a system of suspensions if players are not legitimately injured and able to play, which will last the next two -- for the next two premium tournaments. So the players will have to sit out for the next two top level tournaments on the Tour.
There will, however, be an appeals mechanism for players that will be very fair. The details still have to be worked out. But there will be a process for players to appeal, and if they're not capable of traveling or if they're so injured that they can't play, there will be a mechanism there.
There is no suspension because there are a lot of details that will need to be discussed and worked out, but I'm confident that we'll come up with a fair system for implementing this.

Q. Older players?
LARRY SCOTT: Older players we have always had a system in place that gives reductions for years of service, and again, the actual rules need to be written, but I'm sure we'll continue that practice.
I think if I remember your last question, there will be no exceptions for individual player circumstances. This is a system that's designed for the future and hopefully long into the future, and it won't be designed around any individual player.
Having said that, I'm very sensitive to some of the concerns that Venus and Serena have had with Indian Wells. I've discussed this with both of them, and I think they understand that we can't design a system around individual issues that players have.

Q. Did they indicate to you that they would eventually play the tournament?
LARRY SCOTT: I think they understand that the rules can't accommodate any individual player situation or preferences, and I am confident they'll be playing.

Q. Dee, could you talk a little bit more about the Sony Ericsson objective involved in tennis?
DEE DUTTA: I think we went into women's tennis specifically because of the passion and innovation that we saw in women's tennis. I think today's roadmap is a good indication of that innovation that we have asked for, and that women's tennis has demonstrated throughout its history.
We also wanted to make sure that women's tennis had a global footprint, and I think that was one of the things that we have seen for the past few years: The extension of a global footprint in the market where we see emerging audiences.
So that's very exciting for us. And obviously I think that women's tennis has this amazing ability to travel many fields, not just the field of tennis but fields of entertainment, fashion, music, and this is one of the things that is attractive for a brand like ours in the mobile entertainment space.

Q. How do you feel about that whole aspect of entertainment and fashion and music and tennis?
LARRY SCOTT: Well, I think it's great. I think Sony Ericsson brought a lot of things to the game. And thank you, Dee, for everything you're doing for the sport. It's pretty amazing how things have changed for us since Sony Ericsson is a title sponsor of the Tour.
It's great to see innovation. We're all growing up, and it's great to see different things at the tournaments. I'm sure the fans love it as the players love it, so it's great news.

Q. Maybe I missed this along the way. Where do the crown jewels come from? What does that actually mean when you say these are the crown jewel events?
LARRY SCOTT: It's not a brand name for these events. We've got further work to do on setting our exact calendar and locating the placement of the other tournaments, and in terms of exactly what we're going to do the different events.
But that's really the four most prestigious events. These are the four events that will be mandatory play, so all the top players will play against each other. They'll have the highest level of prize money, over $4 million each, and like this event, this will be the premium level of the show.

Q. I heard Lisa say something about linking players to prize money.
LARRY SCOTT: Yes. As part of this, we have a huge jump in prize money and other financial development in terms of stadia, infrastructure, marketing, that are going along.
I think all this value is being unlocked by making the hard decisions and hard changes to the structure that have encouraged the tournament investors and the cities around the world to be prepared to invest in tennis.
It's sort of proved that proposition that many of us in here have always believe in: That tennis has untapped potential if we could figure out a way through our process to get people to be prepared to make the changes necessary to be made amongst the tournaments and amongst the players, and that's what today helps.
We're making the changes necessary to unlock the value the sport should have and to unlock the popularity the sport should have as a result. So these new levels are going to be achieved. But the players are making a lot of sacrifices to make this happen. They'll have a lot less flexibility in their schedule. There's going to be tougher penalties if they can't meet the commitments, even though the overall schedule is healthier.
But part of that deal is that they feel that through the sacrifices they're prepared to make, the business for the tournaments is going to improve greatly. And when it improves, we wanted to come up with a system like some of the other sports enjoy where future prize money increases are tied to how the tournaments are doing financially.
This has taken -- I think of the three years it feels like this has taken two and a half of the three years to figure out some of the details around this. But for the first time ever after 2009, if player commitments met and if the tournaments are growing financially, that will drive prize money increases through a formula.
To put that in context, up until now whenever prize money has been decided by the Tour it's been based on an arbitrary negotiation between the players and the tournaments at our board level. No longer. We don't have to spend any more time on those negotiations. It's now going to be set through a formula.
And the significance for our players, as well, is a sense of ownership and accountability in how our tournaments are doing and how the system is doing. This could be one of the most far reaching impacts of this from my perspective, the players having a direct financial interest in the tournament's success, and I think this is key to unlocking value, as well.

Q. What penalties? Penalties for players? Are there penalties for hecklers?
LARRY SCOTT: Yes, they get kicked out of our tournaments.

Q. Beyond that?
LARRY SCOTT: I don't think they'll be allowed -- they won't be allowed to have the privilege of coming to our tournaments. We have zero tolerance for what happened yesterday.

Q. Is he banned from future tournaments, or he just won't be back today?
LARRY SCOTT: We've got a system not only at this tournament but all our tournaments where the security at our different tournaments are advised of those people on the watch list, if I can call it that.
I do applaud the tournament and the tournament director here for their swift action yesterday in dealing with that situation.

Q. Given what I would call the imperfect state of women's rights in China and given your obvious plan to expand there exponentially and given the fact that you're one of the premier women's leagues in the world, what do you feel is your responsibility to try to address that through your business expansion?
LARRY SCOTT: Well, I think women's tennis is playing a very important role around the world in a positive and progressive way in leading social change. I think the announcement of equal prize money at Roland Garros and Wimbledon were very important milestones in sending a powerful signal to women and girls around the world that things are changing, that barriers are breaking down.
And as the leading professional sport in the world for women, our players have an important role to play as role models. Our whole sport has an important role to play, because there's no sport in the world where women enjoy the status that they enjoy in tennis. There's no sport in the world where women and men play side by side for equal prize money the way they do in tennis, so I think tennis is playing an important role on a global basis.
In specific markets around the world we've always been very proud of being the first women's sport at a very high level to play in some of the middle eastern countries where we play: China, India, other markets where the fact that we have women's events there.
The fact that our top players play there sends a very strong and powerful signal about the progressiveness of some of those places that I think is inspiring social change. So that's the way we've always looked at it, that we are -- our sport is a reflection of where society is at around the world in terms of some of these social issues, but it's also a catalyst for further effecting social change.

Q. Other than that top-down effect, does the Tour have plans to work on the grass-roots level in China?
LARRY SCOTT: Very early days, but I think a very significant step in that direction is our partnership with Unesco at our Sony Ericsson championships in Madrid we announced a partnership, helped putting it together with Unesco. Venus Williams was there, first player leader of that program.
Unesco is responsible for gender equality and is teaming up with us in their first ever partnership in a professional sport to take advantage of the celebrity and the notoriety our players have as the leading female athletes in the world, to extend it into educational and social delivery programs.
They've got a great delivery system around the world. What sometimes they need is more awareness. So it's a great partnership between the leading global sport for women and the U.N. Agency responsible at a grass-roots level for effecting that social change.
I think it's going to take some time to figure out how best to work with each other. We have got 30 events in 60 countries around the world. We've got players from over 70 countries. We've got a unique opportunity at a grass-roots level with Unesco to start effecting for change.

Q. Speaking of social change, you admitted to having Israel, and also Shahar Peer told me yesterday that the Israeli tournament was cancelled. So I have two questions about that. Number one, are there any plans about reestablishing Israel as a market? And No. 2, the old situation we talked about last year about Dubai, they don't allow Israeli citizens into the country or people of Jewish faith. Given the fact that maybe Shahar could enter the tournament but our fans can't join her, is there something you could do about that situation in Dubai?
LARRY SCOTT: First let me clarify in terms of Tel Aviv being cancelled. This is at the tournament's request due to social and economic instability in the region. But we're very keen to have a tournament in Tel Aviv. It was on our schedule the last couple years, and we're bitterly disappointed that the tournament is not allowing it this year. I know Shahar is, as well.
Vis-á-vis Dubai, our policy is also clear. No tournament in the world can deny entry to a player that's entitled to play based on their ranking. The only system of entry to a tournament is based on merit, and if a tournament cannot allow a player into their country, they're not allowed to be on our Tour.

Q. What about her coach and her family and others? This is where it gets complicated.
LARRY SCOTT: Where we draw the line is at the level of the competition.

Q. Are you saying these four tournaments are mandatory? What's the commitment for these other tournaments? And is it the same commitment for each of those tournaments?
LARRY SCOTT: Well, the commitment from the player side is the players have to commit to ten tournaments, which is down from 13 last year and 12 this year. The details of the players that will be at these other 20 tournaments, they will be top players.
Each of these events that you see up here will be supported and will be represented with top players in the world. Which tournaments are in exactly which categories, which levels of player commitment, there's still some details to finalize that. We're not ready to announce that. We're still working on the final calendar and those things.
But all these tournaments will get very, very strong support from top players at different levels.

Q. I see no tournament in Latin America or southern Africa. Is there any chance to bring back these regions into the world of tennis?
LARRY SCOTT: One clarification I definitely want to play is we have approximately 60 tournaments right now, and every tournament that has a spot now, including tournaments in Acapulco and Bogota, are on the Tour, will have spots on the calendar in 2009. What we're announcing today is the streamlined premium tier.

Q. I meant a big tennis tournament. No chance for the future?
LARRY SCOTT: At least for 2009, really no tournaments have risen to the level in Latin America to sort of make the top tier. But we are hopeful. We know it's a very important market for Sony Ericsson, for our players, and we're hopeful in the future.
But at this point in time no tournaments in Latin America have risen to that level. We do look at the Sony Ericsson Open here in Miami as sort of a gateway for Latin America, and it's obviously amongst our biggest tournaments. So we'll look forward to the future.

Q. Could you dumb it down for me a little bit? Why did San Diego, which is a pretty popular successful tournament, what happened exactly?
LARRY SCOTT: The owners of the tournament decided it was time for them to sell, and they decided to sell their sanction back to the Tour. So after 2007, San Diego is not on our calendar. You see the Top 20 tournaments.
Having said that, as I mentioned to some folks out at the Pacific Life Open, there are discussions underway still with the facility, with the sponsors, and with others about possibly having a tournament at the top level in San Diego. But those discussions are not concluded yet.
So I wouldn't say definitively that we won't have a tournament in San Diego, but we're not at the point where we can say we have one, either.

Q. I understand why the owners for whatever reason wanted to sell it, but why would the Tour want to purchase it and then kind of say, All right, it's not going to exist? Obviously it's the most successful of the California ones.
LARRY SCOTT: Well, the way we work is we have to have promoters and owners of these franchises in the different markets to operate a tournament. So we need a promoter with sponsors that want to operate there, and we don't have that right now.
But it is highly successful tournament with a sponsor that's been around for an awfully long time supporting women's tennis, and I guess all I can say is watch this space.

Q. Could ATP Shanghai and WTA Beijing happen the same week? And what are the marketing nuances of that with two tournaments going on the same week, if that's going to happen?
LARRY SCOTT: Well, our vision for some time has been four combined, mandatory tournaments at the top of both tours, equal prize money. That's been our vision and still is our vision, still is our ideal result.
But Etienne and I, as we have looked at developing these plans, have seen the tremendous growth in China, seen the opportunities in China. You look at the amazing facility in Shanghai and the successful Tennis Masters Cup, you look at what's being built for the Olympic tennis facility in Beijing, the support of the government, the support of that city, and it's remarkable.
The investment and the support in the two biggest cities in China. What we decided is in the best interests of tennis in China and tennis globally, we should be represented in the two biggest markets in China at our highest level as the first most important point. We're announcing it today together because it's very much a coordinated approach.
The second step, working with the Beijing municipal golf, working with the Shanghai municipal golf, working closely with the ATP. We're going to figure out together the best way to coordinate these events.
They could be in the same week, sort of a virtual combined. Could be the Canada model where we have one city one week, the other city the other week, or it could be combined -- actual combined event that alternates back and forth between Shanghai and Beijing.
There's many possibilities we're talking about, but given the unique opportunities in China, we thought a unique approach to have both tours go to China was warranted.

Q. Isn't it going to be difficult as I --
LARRY SCOTT: Is there any last question for Justine before she goes?

Q. Is that going to be a bit difficult to work on the Canada model, in that you've got two different entities owning the two different events?
LARRY SCOTT: It's going to require great coordination with us and our friends at the ATP and between the two cities, but we've already had a lot of conversations, and I'm confident we'll find a good solution.

Q. What would be the only one tournament that was downgraded at all from this group is I guess the Zurich Open. Why is that?
LARRY SCOTT: We're still in discussions with the promoters in Zurich about what's the best way that they fit into this future Tour calendar, and those conversations are ongoing.
I still think it's going to be a few months before we're able to announce the final calendar and exactly where Zurich fits in and we have that decided with them.

Q. Can you talk a little bit about the place in Madrid in the calendar, summer or fall?
LARRY SCOTT: We haven't finalized our 2009 calendar yet, but our draft calendar, our template, has Madrid two weeks before Roland Garros on clay and as an ideal lead up for players before they play the French Open.

Q. Where does Amelia Island Bausch & Lomb fit into the calendar?
LARRY SCOTT: A highly successful tournament for us with a long time sponsor, I think it's 20 plus years that Bausch & Lomb has been involved. Absolutely part of the -- will be part of the Tour in the same schedule. We're anticipating after this event the schedule stays exactly like it is with Amelia Island and Charleston, but as I said, at this stage we're really announcing what the Top 20 tournaments look like, and we now are going to work with Amelia Island and other cities to finalize those details exactly how they fit in. But great tournament and I expect it to continue.

Q. What are the draws for these tournaments, all the same or different?
LARRY SCOTT: These will all be in general big draw sizes, 56 or 64 draw size from Indian Wells and Miami, which are of course 96. There may be one or two exceptions for indoor tournaments, depending on the venue, depending on whether they're combined with the men.
But in general these are big draw sizes, big prize money, all the best players playing.

Q. Just getting back to Beijing/Shanghai and the original indication about it being a combined event like Indian Wells and Miami, and also knowing how important a market China is for Sony Ericsson, plus the new facility that's going to be used for the Olympics, how much suggestion was there from the Beijing municipal government that this women's event should go to Beijing?
LARRY SCOTT: Oh, this has created a lot of interest in China amongst Beijing and Shanghai, and both -- we're very lucky, I think, both of us in tennis, that a market the size of China tennis is so popular and that the government leaders are so supportive of tennis and so eager to build these magnificent facilities and have tennis at the highest levels.
Both governments at the highest level have been very involved in this process.

Q. Have you got a number that can speak to the level of popularity in China, about the growth? 10 percent of the country plays?
LARRY SCOTT: I wouldn't want to give you a wrong number, but we've got good data from the ITF about data, but I know the numbers are pretty staggering.

Q. Can you talk about this luxury tax issue? Let's say a lot of top players want to play New Haven. Is the tournament going to be in a position where they say, No, you can't play because we can't afford it?
LARRY SCOTT: This ties back to the question about the player levels at these tournaments. The tournaments amongst these 20 will have different prize money levels depending on the number of top players that they'll have. There will be sort of a sliding scale. We'll have tournaments at the $2 million level, $1 and a half level, $1 million level and on down.
We're going to go through a process over the next few months where we finalize those details with the tournament. Today is really about the structural changes we're making, the recategorizing the tournaments, the streamlining, the shortening. We're actually a long way off.
In tennis terms this is very far in advance. Normally we don't do this so far in advance, but we have nearly two years to work on some of those details individually on a case-by-case basis with tournaments about what their prize money level will be and what level of players they have.

Q. But hypothetically has the situation been addressed at all? Will there be any kind of -- anything that the tournament can do if they end up having entries that they don't want to put out the money for?
BUTCH BUCHHOLZ: Our understanding is because it's the week before a Grand Slam that there will be different considerations. We have a situation where somebody has been injured and they need to play, my understanding is it's not going to get taxed.
LARRY SCOTT: Are you asking about New Haven specifically?

Q. Not specifically but sort of as a specific scenario. That was the most obvious example from last year.

Q. You and AT have had discussions from time to time about combining the Tours' end-of-the-year championships. Is there any substantive progress being made in that area?
LARRY SCOTT: There's no progress being made at the moment vis-á-vis a combined end-of-year event, which does not reflect any lack of desire. I mean, we really share a collective vision that we would like to end the two seasons together.
Where the difference is right now is we've been so laser focused on getting a healthier calendar for our players and shortening the season that our circuit is going to end at the end of October right now, and we've been balancing different challenges.
We've had plenty of challenges in terms of reorganizing our circuit. Etienne is going through the challenges with his circuit, but I think at this stage it doesn't look like we can end at the same time, that we'll be a fair few weeks earlier and therefore we can't combine for the moment.
We've put a priority on our players' health and well-being at the moment.

Q. How would you characterize the tone of your discussions with the USTA given their concern about the US Open Series?
LARRY SCOTT: They've been great. We've had a lot of intensive discussions and the USTA has played a very important role in getting us here and helping us improve upon the plan. So this whole process has been about finding compromise with different tournament promoters, players, and getting the tournaments on the same page with representing progress.
I'm thrilled we've overcome the major challenges we've had in the spirit of cooperation, and as I said, there will still be some details we have to work out with all of our members about the sequencing of the calendar at different times of year. But we've been very constructive and we share the same goal, which is to raise the popularity of women's tennis and tennis as a whole, and this plan will do that.

Q. You've talked about China and their surge in popularity, but are they building public courts? Are they showing interest?
LARRY SCOTT: Yes. There's a huge investment going on. Dee may know more than I do actually, but there's tennis academies being built, there's tennis teams that are starting up and being supported, and I think there is a significant continued increase in the grass-roots popularity of tennis in that country.
DEE DUTTA: They have a very extensive university program, which is at both local and state government levels and at national government level. China sees tennis as a major priority for their kind of sporting ambitions, and I think right across the spectrum, China is looking not to just build players in the big cities but also in villages and towns. They see tennis as one of the sports that they'd like to make a big splash in the future.

Q. Why do you think that is?
DEE DUTTA: Because intrinsically tennis is one of those sports that has got the values that the Chinese admire. It's a gladiatorial sport. It's also a sport that's aspirational, and China is a fast emerging market. Aspirational markets have a high premium in many of the mass sports.

End of FastScripts

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