Arlen Kantarian keeps a low profile. So no one really knows who this remarkable sports manager really is

U.S. tennis’s chief enabler

The U.S. Tennis Open is a phenomenal occasion and is the world’s single most profitable sporting event on a standalone basis. It throws off cash like no other event and for every two dollars taken in, a dollar is pure profit. It’s as unprecedented as its chief executive is capable. Meet Arlen Kantarian.

When Business Week magazine published its ‘Power 100’, a list of the most powerful people in sport last October, the front cover screamed “meet the most influential people in the business of sports”.

Business Week is arguably the most influential business magazine in the world and its naming of the 100 most powerful people in world sport was a big event. But inexplicably it left Arlen Kantarian, the American tennis supremo, completely off its list. It was a huge own-goal for Stephen Adler, the editor-in-chief and a man who takes these things very seriously indeed.

Kantarian was reportedly momentarily miffed but then laughed unworried at his exclusion. If any sports executive’s record stood for itself, it was his. It was a fact that he ran what is the most profitable sports event in the world by some considerable margin, the U.S. Tennis Open. And inarguably the best organised and promoted.

But like many people, Adler had seemingly dismissed Kantarian as an ‘empty suit’, a hired hand with a head for marketing and little else. Kantarian is far from just a glorified head of marketing.

Ever since the Armenian-born 54-year-old left Radio City Music Hall to become the United States Tennis Association’s commercial supremo, the sport of tennis in the USA has prospered mightily and in the process shed its old rudderless, self-destructive image. It has literally been transformed into a slick corporate organisation that any sport would be proud to be associated with. A few years ago, The New York Times said of Kantarian that he had “more spin on tap than a spider”. He was said to be highly flattered by that description.

So who is this man who has done so much to push the game of tennis forward in North America? Kantarian was introduced to tennis when he used to sneak into the U.S. Open tournament when it was played at Forest Hills in New York. When he became chief executive of the United States Tennis Association (USTA) eight years ago, the first question he asked was whether security had been improved.

Kantarian hails from a tight-knit Armenian family which shared a one-bedroom apartment. His father was a truck driver and as a child he used to help load trucks. His father recognised his talent from an early age and put him through business school. He attended Georgetown, then received his MBA from the Stern School at New York University.

After early careers at Colgate and Pepsi he joined the NFL organisation and marketed pro-football, before switching to the entertainment industry at Radio City, where he spent nine years. He left after Cablevision bought the company, and became chief executive of an internet company before he was headhunted by the USTA – in retrospect the best day’s work the association ever did.

Kantarian says he learned his skills, and trade, from the five formative years spent selling toothpaste and beverages at Colgate-Palmolive and Pepsi-Cola. The two jobs gave him the self-belief he could ‘package’ anything and sell it. His task at USTA has been simply that.

Eight years ago, Kantarian set about transforming the U.S. Open at Flushing Meadows, until it was beyond the recognition of what it used to be. Now the two-week extravaganza is more than just about tennis, it is a major entertainment event that attracts the cream of New York society and a host of celebrities like magnets to the action. The two-week tournament is recognised as far and away the best-organised and run sporting event in the world.

In recent years success has just fed on success and Kantarian has brought what Tennis Week magazine described as “sizzle and savvy to a once sleepy game”.

As well as transforming the Flushing Meadows event, Kantarian created the U.S. Open Series, a simple marketing concept that saw him take a handful of 10 existing summer tournaments across North America and link them together in a neat series that seemed to rain down money on the USTA.

That success has brought him little recognition, the BusinessWeek debacle notwithstanding. But insiders believe he is the best marketing executive in global sport operating today.

His talents, however, are still basically unrecognised. He doesn’t even have his own entry in the ubiquitous online encyclopaedia, Wikipedia.

But his record is huge even if no one wants to chronicle it. The Open Tennis made a US$110 million profit on US$220 million of revenues last year. No other single competition event comes close to those revenues. Only month-long series events like the NCAA Basketball and Fifa’s World Cup earn more than the Tennis Open. And considering tennis is a second-tier sport in the United States, it is nothing “short of amazing” according to The New York Times. Kantarian has succeeded by managing to position it as the premier luxury sporting event of the New York summer by – according to one observer – “injecting vigorous doses of entertainment”.

A staggering 750,000 people pass through the turnstiles at Flushing Meadows over the 14 days, and 23,000 spectators crowd the Arthur Ashe central stadium each day. That is 150,000 more people than when Kantarian took over eight years ago. He says: “People want to be here, they don’t ask who is playing anymore.” He has a point. In the year after big draw Andre Agassi retired, after 21 years of continuous performance, ticket sales broke the record.

The revenue growth that Kantarian has overseen has been his biggest achievement. In 1999, gross revenue was US$139 million and profits were US$60 million. Both those figures have nearly doubled. As soon as he arrived, Kantarian recognised that  the event was undersold. The 80 per cent increases have come from non-media; the growth is being driven by new fans buying tickets, merchandise and concessions, and sponsors aligning with the event.

The only dark cloud on Kantarian’s horizon is declining television ratings. Television is still the most important revenue contributor. It is responsible just under half of the revenues, with gate receipts contributing around a third. Sponsorship is 20 per cent and sales of food, beverage and merchandise around seven per cent.

Despite the record numbers and profits, most people know him as the man who turned the hard courts at Flushing Meadow from dark green to light blue. The story of how he did it is apocryphal. For the first five years as chief executive he looked at the courts and sensed something was wrong. He always assumed there was a basic reason for them being green. When he finally got round to asking why, realising that there was no explanation, it was just a tradition, he immediately changed the colour. It proved a breakthrough live and on television.

He makes light of it now, but the change at the 2005 tournament was a huge break from tradition. He believes the only reason the courts were green was to mimic the colour of grass. He figured that was no reason at all and after researching what the best could actually be, he finally alighted on light blue, as he explains: “This court should have been blue for the past 50 years. You look at tapes from even two years ago, and it looks like they’re in the 1940s.”

No one can deny the light blue courts have been a revelation and he was proclaimed a true visionary at the time. He dismisses talk like that. “Look at the contrast between the player and court,” he says. “Look at how much better it looks for spectators and television viewers. This wasn’t visionary – this was a no-brainer.”

There is no doubt that the now famous blue courts make it easier for spectators to see the ball, aid electronic line calling and enhance the opening night ceremony. He explains: “Part of what we tried to do is instil a sense of this event as being where today’s most popular things in today’s culture all come together,” he said. “It’s certainly sport, it’s certainly fashion, it’s certainly entertainment, and it’s celebrity.”

As well as the colour of the courts Kantarian has paid attention to everything from restaurants, to new food kiosks, display fountains, a walk of fame, and video boards on-site and in-stadium. One insider described the restaurant area as being like ‘Disneyland‘. Another said: “It’s a totally different environment, even from five years ago. Arlen’s vision of bringing entertainment and innovations is a huge advance, and all of these things are what makes the U.S. Open such a unique event.”

The blue courts are a visible element of the changes Kantarian made after he brought in a team of crack executives from outside tennis. The new people had a totally new view on tennis. The USTA had previously considered its competition to be other tennis events. Kantarian’s men viewed the competition as other sports and entertainment events.

Some critics have called his success ‘the Kantarian shuffle’ and ‘pure marketing inspiration’. 

But most of it has been attending to the basics and pure sweat and tears. He has added and upgraded seats and installed luxurious hospitality, in fact anything to make the Open “an entertainment spectacle”. A significant, but difficult to achieve breakthrough was to install large video screens on which the games could be replayed for the benefit of fans in the upper seat levels. This innovation, common in other sports, was prevented for many years by players, until Kantarian got his way. The upper levels have a very poor view of the play, so the video boards on either end of the stadium are a great enhancement.

In the process of all this change, Kantarian has had to oversee a cultural makeover. In 1999, tennis was a sport that adhered to tradition. He found that making any fundamental change, or any change at all, was very difficult. Changes were deemed impossible if they affected what was widely called ‘the purity of the game’. Kantarian didn’t understand this phrase, as no one loved the ‘purity of the game’ more than he.

Kantarian basically dismisses the so-called purists: “Tradition in this sport is tremendous, but we can’t let tradition handicap us. Going from a white to a yellow ball caused tremendous unrest 35 years ago. We went to the tiebreak and had a couple of players who didn’t want to come out of the locker room.”

Kantarian said. “Our only intention is to come up with the type of entertainment that is right for this audience and this sport. We’ve tried to ‘up’ the entertainment level.”

But Kantarian is not pursuing change for change’s sake, and above all he believes in the basic game of tennis: “I’m not sure you need to change the game itself. Its simplicity is almost its strength. We’re just finding new ways for people to watch and appreciate tennis. Those things don’t change the game itself; they just change the way people can enjoy the game.”

Kantarian spends all his waking hours thinking about what he does. He is not only a good operating executive, but also possesses a very creative mind, a rare combination. He benefits from being able to have influence on the basic rules of the game even though he is often frustrated by the progress. He recognises in himself those talents, as he says: “We have to keep all those elements that we benefit from, and we need to stay focused on the fact that this is the 21st century. In this day and age, running successful businesses is about staying ahead of the curve, about making quick decisions.

“Historically, this has been a sport where you’re not typically able to do those two things, partly due to how the sport is governed. We’ve got to do the best job possible within the environment we’re in. Once you get all those constituencies on the same page – the power of partnership is a concept I believe in. Now the winds are at our backs; we’re going downhill. Once you get that force on one page, it becomes an advantage.”

Another big innovation was the wholesale adoption of night tennis under floodlight, to increase the spectacle and the range and type of entertainment on offer. It was another ‘no brainer’ for Kantarian.

Kantarian is a huge fan of night tennis and feels it gives Flushing Meadow a real edge on other sports: “Night tennis gives you that gladiator impact and that sheen you get on TV from the lights. It’s the crowd. It’s a New York thing. There’s a Broadway element, a celebrity factor, a Wall Street factor. The high drama of seeing two gladiators under the lights is something New Yorkers really take to.”

Aside from the huge screens and blue courts, his other big change has been the introduction of Hawk-Eye technology. There is no doubt that Kantarian was one of the prime movers in introducing Hawk-Eye to the game, which has made it so much more entertaining and has now been adopted by almost all tournaments, including Wimbledon in 2007. He had longed for it for many years. It was, as he calls it, “a collision between sport and entertainment”. He summed it up by saying: “There were a lot of constituencies we wanted to help: the players, the officials and the fans. It meant more help for the officials, more strategy for the players and more intrigue for the fans. We need to marry tradition with innovation.”

But he is adamant that the purist and traditionalist in him knows exactly what it is doing when introducing radical changes like Hawk-Eye which impinge on the outcome of the games: “‘I want to get from Point A to Point B in a straight line, but I’ve never come close to crossing what I call the carnival line. I’m not about changing tennis. I’m about changing the ways that people enjoy it. Tennis is still the main event.”

For some his real and most visible success has been attracting a celebrity audience to consistently come and watch the tennis. Celebrities from all walks of American life – from Diana Ross to Whitney Houston to Simon and Garfunkel to Harry Connick Jr to Larry David and Jerry Seinfeld – literally crowd the courts and are frequently photographed and appear on television. All the pictures seem to reflect just one thing; that they are all having a really good time. When they are transmitted and printed throughout the world, the free advertising it generates for the event is incalculable.  Kantarian argues that these people are big draws in themselves and he loves the “energy” they generate: “Tennis is always the main theatre, but that doesn’t mean you can’t create what we call sideshows to capture a broader audience. We’ve had everybody – we’ve surrounded the grounds with more energy.”

For all the glitz, Kantarian realises that it is the tennis playing stars that create the real demand. The battles of the stars on court is clearly what really turns him on. Every decision he makes is based on that sensation, that feeling he gets when watching such a contest.

Surprisingly, he says nationality has little to do with it in the bigger picture. “People care about players in tennis, not nationalities,” he says. As as example, he reveals that   demand for tickets went through the roof after the great American stars Pete Sampras and Agassi retired. He says: “Great stars make you look like you’re doing great marketing. And that’s cyclical. The NBA went through a tremendous run with Magic Johnson, Larry Bird and Michael Jordan. We’ve had some of that. The way the characters present themselves in any sport is what’s going to rule short-term popularity. Our goal is to create long-term popularity and get through those years where we might not have as many stars.”

But whilst Kantarian may have managed the live event without stars and continued to grow revenues, TV ratings have fallen as Agassi and Sampras have exited. That ratings have not held up is the one area of criticism of Kantarian. Kantarian himself doesn’t see it as a real problem, but it does provide fodder for the critics. He says: “I don’t sense a problem. But we do need stars, whether they’re from Russia, the U.S. or Europe. Right now we have a mix of young stars, plus some veteran 30-somethings who lend themselves to compelling stories – players who transcend their own popularity in any one country. Do we want to see a better mix of better stars every year? Absolutely. But you can’t manufacture a Sampras, Connors or Roddick. So we need to be better at promoting all of our stars. Seventeen ago, after Connors, McEnroe, Evert and Navratilova, everybody said, “What now?” Along came Pete, Andre, Courier and Chang.” But for all his thoughts about nationalism, he is not averse to exploiting it when he gets the opportunity. And one such gift of opportunity came when the American-born Williams sisters first fought their way through to the Women’s Final in 2001. It was the answer to his marketing dreams for promoting women’s tennis. He immediately hustled everybody involved and moved the 2001 Women’s Final to a prime time slot on CBS on Saturday.

Despite his ability to make change quickly and be opportunistic, Kantarian also sets great store by consistency: “We’ve also learned that success is marked by consistent TV packages, where the viewer knows to tune in at a certain time every weekend.” His other talent is packaging and he believes that all the assets of the property have to be correctly packaged. “The other important thing is packaging or bundling assets: taking the TV, sponsorship and merchandising rights and packaging them as one.”

The word “packaging” means everything to Kantarian. If he was struck dumb and could choose just one word to be left with, that would be it.

He believes sophisticated packaging is the biggest breakthrough sport has made in the modern era. But he doesn’t believe in global packaging, as he explains: “That tennis is global is both our advantage and biggest disadvantage. We’ve got to capture the advantages of both. There are very few TV companies, very few sponsors, who want to buy the world. They want to buy the U.S., or Australia or Europe. Otherwise it’s difficult for any TV entity or sponsor to wrap their minds around. That tennis is global, with stars coming from every country and consistent worldwide rules is a huge advantage globally, but the sport needs to be packaged on a regional level.”

As 2008 dawns, it is becoming very clear that Kantarian’s efforts are having a very basic effect on U.S.

tennis. His efforts are feeding right back into the grassroots game as one observer said: “More and more we feel there is a direct link in people watching tennis on TV and in the stands, and people coming onto the court.”

And Kantarian has one area he wants to innovate. He is now turning his attention to the television show, searching for ways to televise tennis more effectively. He believes there is much that can be done because of the advances in camera technology and high definition. He wants to employ smaller cameras and install many more of them. He wants to mount them on the nets and be closer to the players and their faces. As he says: “We have to get into players’ faces.”

For sure BusinessWeek’s Stephen Adler, having got over his embarrassment in 2007, will not be forgetting Arlen Kantarian’s name again.