How A Tennis Tournament In Queens Generates $500 Million In Annual Revenue

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Friends,

The 143rd edition of the U.S. Open kicked off on Monday at the USTA Billie Jean King National Tennis Center in Flushing Meadows, Queens, New York.

This is the fourth and final grand slam of 2023, as Novak Djokovic looks to extend his grand slam singles lead over the injured Rafael Nadal.

Most Men’s Grand Slam Singles Titles

1. Novak Djokovic: 23

2. Rafael Nadal: 22

3. Roger Federer: 20

But the business behind this historic event — the U.S. Open started in 1881 as the U.S. National Championship! — is even more fascinating than the play on the court.

For example, this year’s players will compete for $65 million in prize money. That’s an 8% increase from 2022 and more than any other Grand Slam prize pool in 2023.

2023 Grand Slam Prize Pools

1. The U.S. Open: $65 million

2. Wimbledon: $57 million

3. French Open: $54 million

4. Australian Open: $53 million

This money comes from the U.S. Open’s 24 sponsorship partners, $75 million annual broadcast deal, and the event’s $472 million in annual revenue, including nearly $9 million from 400,000+ sales of the tournament’s famous Honey Deuce cocktail.

So today, let’s dig through the money and business behind the 2023 U.S. Open.

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U.S. Open: History, Location, And Prize Money

The U.S. Open started in 1881 and is one of the world’s oldest tennis tournaments.

It was initially a national men’s singles and doubles tournament that was only open to U.S. National Lawn Tennis Association members (USLTA, now USTA). But women’s singles were added in 1887, women’s doubles were added in 1889, and mixed doubles were brought aboard in 1892.

The event is now run by the United States Tennis Association (USTA), the national governing body for the sport of tennis in the United States. In simple terms, the USTA is a not-for-profit organization designed to promote and develop the growth of tennis from the local community level to the professional level.

USTA Membership Stats

• Individual Members: 680,000

• Organization Members: 7,000

Under the USTA’s guidance, the U.S. Open has grown every year.

Take the stadium, for instance. From 2011 to 2018, the USTA completed a $600 million renovation project on the Open grounds, including a $150 million, 6,500-ton steel retractable roof for Arthur Ashe Stadium that can be closed within six minutes.

Arthur Ashe Stadium also fits 9,000 more spectators than the biggest courts at every other Grand Slam venue, according to Forbes.

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Celebrating 50 Years Of Equal Prize Money

The U.S. Open increased this year’s purse by 8%, with players now competing for $65 million in prize money — the largest of all four Grand Slams.

2023 US Open Prize Money (singles)

• Winner: $3 million

• Runner-Up: $1.5 million

• Semifinalists: $775,000

• Quarterfinalists: $455,000

• Round of 16: $284,000

• Round of 32: $191,000

• Rounds of 64: $123,000

• Round of 128: $81,500

But the real story behind the U.S. Open’s $65 million purse is that it’s equal for everyone.

In 1973, defending U.S. Open champion Billie Jean King rallied her fellow women to threaten a boycott of that year’s tournament unless women got the same pay as men.

It was later announced that summer that the men’s and women’s U.S. Open champions would each receive $25,000. And while it took the other Grand Slams 34 years to follow suit, all four tennis Grand Slams now offer equal prize money.

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Increasing TV Rights, Tickets, And Total Event Revenue

The 2022 U.S. Open generated $472 million in revenue, a 112% increase from the $223 million the U.S. Open generated a decade prior.

The U.S. Open works with 24 sponsors, including iconic brands like Rolex, Cadillac, Polo Ralph-Lauren, J.P. Morgan, American Express, Grey Goose, Emirates, Chase, Deloitte, IBM, Moderna, Ticketmaster, Evian, and more.

And while we don’t know how much each sponsor pays, 90% of the USTA’s annual revenue comes from the U.S. Open, so it’s safe to assume that the vast majority of the organization’s $106.7 million in 2022 sponsor revenue comes from the tournament.

(U.S. Open Revenue Growth Chart from Forbes)

Sponsors are certainly a big item for the U.S. Open — but TV rights are even bigger.

ESPN has been the broadcast rights holder for the U.S. Open since they acquired the rights from CBS (after 46 years) in 2015. The worldwide leader in sports is paying the USTA $825 million over 11 years, or $75 million annually. And the Top 5 largest audiences at the 2022 U.S. Open were between 2.4 million and 4.8 million viewers.

The other two big revenue generators at the U.S. Open are tickets & concessions.

In 2022, the U.S. Open set a tournament record with 776,120 attendees across the two-week main draw event. This translated into more than $150 million in ticket revenue, with luxury suites for the semifinals and finals commanding $100,000+.

And if you have been to the U.S. Open (or follow tennis), you probably know about the Honey Deuce.

The Honey Deuce is one of the most famous cocktails in sports. It was born out of a 17-year partnership between the U.S. Open and sponsor Grey Goose beginning in 2007 and inspired by the Mint Julep of the Kentucky Derby.

The drink is raspberry lemonade infused with Grey Goose vodka that is then garnished with three honeydew melon balls. It sells for $22 during the U.S. Open, and 405,000 were sold last year — equating to $8.9 million in Honey Deuce sales alone.

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Conversation Starters:

• In addition to a $3 million payout, each winner of the U.S. Open will receive a trophy made by Tiffany & Co. Tiffany has been making the trophies since 1987, with the singles trophies taking 4.5 months to make and 5 months for the doubles.

• USTA pays the city a percentage in rent for using its facilities in the public Flushing Meadows Corona Park, which amounted to $5 million in 2022. 

• The U.S. Open has been played on three surfaces: Grass from 1881 to 1974, Clay from 1975 to 1977, and DecoTurf (hard court) from 1978 to today.

• The U.S. Open fired 250 line judges after implementing Hawkeye Tech in 2020, an optical system that uses 12 cameras to track whether tennis balls land in or out in real-time.

• The U.S. Open requires 7,000 seasonal workers to run its 2-week event, including 350 ballpersons who work an average of 25 to 45 matches each.

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I hope everyone has a great day. We’ll talk on Friday.

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Extra Credit: Novak Djokovic Ditches NYC Hotels For A New Jersey Home

Novak Djokovic is back at this year's U.S. Open. But rather than staying at an NYC hotel like the other players, Novak and his family are staying at a New Jersey home.

The home belongs to former professional tennis player (and friend) Gordon Uehling. And the 40-acre, $40 million property has hard, clay, and grass tennis courts.

Although, the commute does require Djokovic to cross two bridges and cover 25 miles.

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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.

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