The administration of Gov. Dannel P. Malloy has agreed to pay $618,000 for the rights to the New Haven Open at Yale tennis tournament in what a top state official says is an unprecedented government investment in professional sports.
The purchase was announced Thursday in a conference call by Ben Barnes, who oversees the state budget as secretary of policy and management. It commits the state to an investment of at least $1.4 million over two years, including operating subsidies.
The deal will be formalized later this month when the Capital Region Development Authority, which was recently granted statewide authority by the legislature to invest in sports, votes on an arrangement to stablize a tournament that has struggled at times for sponsors and revenue.
The Malloy administration gave its blessing to the investment as a promoter in Winston-Salem, N.C., was trying to buy the tournament rights. Barnes called the purchase an investment in economic development.
The nine-day women’s tournament drew 45,000 spectators in 2013, down from a high of more than 100,000, with just 4,000 at the final in a stadium that seats 15,000. It lost money on revenues of about $4 million, and the state will contribute $400,000 this year and next to subsidize the tournament, Barnes said.
The U.S. has a long and mixed history of subsidizing professional sports, primarily through the construction and operation of stadiums and other venues, but Barnes said officials could find no example of a government entity owning a tournament or other sporting event.
Barnes said the downside risk was minimal, saying the purchase price “is apparently a bargain in the world of owning tennis tournament,” and the tournament rights are an asset that the state could sell.
He quoted a 2008 study as saying the tournament generates $25 million in annual economic activity and 300 jobs.
“We are overjoyed by this new partnership,” said Anne Worcester, who will remain as the tournament’s director.
Worcester said event’s five major sponsors — First Niagra, American Express, Aetna, Yale and Yale-New Haven Hospital — are committed to continuing their support.
But the Connecticut Policy Institute, the think tank founded by Tom Foley, the Republican who opposed Malloy in 2010 and is exploring another run for governor in 2014, attacked the purchase.
“Running tennis tournaments is not the job of state government for the same reason managing restaurants is not government’s job — taxpayers should not be subsidizing entertainment services for which there is no demand,” wrote Ben Zimmer, the Yale graduate who runs the institute.
Zimmer said the 2008 study that found a $25 million economic impact was conducted when the attendance was nearly double.
“There is a reason private sector sponsors were not willing to pay enough to keep the tournament here without a government subsidy — attendance has dropped from more than 80,000 in 2008 to below 50,000 in 2013,” Zimmer wrote.
The tournament is played at the Connecticut Tennis Center at Yale, which was built with state funds during the administration of Gov. Lowell P. Weicker Jr. on land leased from Yale University.
Next year’s tournament is scheduled from Aug. 15 to 23.
The Capital Regional Development Authority is already a sports landlord as the owner of the XL Center in Hartford, where minor-league hockey and UConn basketball are the major draws, and Rentschler Field in East Hartford, home to UConn football.