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May 14, 2014

Dave Haggerty

Patrick McEnroe

Gordon Smith

CHRIS WIDMAIER:テつ Good afternoon, everyone.テつ This is Chris Widmaier, managing director of communications for the USTA.テつ I'd like to thank everybody for joining us on this call.
So you know, we have the USTA chairman of the board and president, Dave Haggerty.テつ The USTA executive director and chief operating officer, Gordon Smith.テつ And the USTA general manager of player development, Patrick McEnroe.
Earlier this morning here in Orlando, Florida, within the Lake Nona development area, the USTA announced its intention to build a state‑of‑the‑art model tennis facility that will focus all of our resources across the complete competitive pathway from the youngest players through high school, adult leagues, collegiate tennis and the building of future pros.テつ We were joined by the governor of Florida, Rick Scott, the respective mayors of Orlando and Orange County, among others who were very excited to be welcoming the USTA to the 63‑acre, 100‑court plus state‑of‑the‑art facility.
At this point I'm going to open it up to questions.

Q.テつ How does this affect the USTA training site in Carson and at the National Tennis Center in Flushing Meadows, or does it affect it?
PATRICK McENROE:テつ We're obviously going to look into everything that we're doing.テつ I think it's safe to say we will have a presence still in New York at the home of the US Open, at the National Tennis Center there, and we will have some presence in Southern Cal.テつ We'll have the next year or so to really look into that and evaluate what is going to work best with the resources we have.
But we're very happy with the arrangement we've had with the Evert Academy.テつ We'll be there for a couple more years as our lease arrangement will be up in a couple of years.テつ We've been very happy with our arrangement there and will continue to do that the next couple years until we refocus ourselves here in Florida to Orlando.

Q.テつ Do we know the cost of this project and how much land is actually being used?
DAVE HAGGERTY:テつ The cost of the project is around about $60 million.テつ It's a 63‑acre land use with a little bit over a hundred courts.

Q.テつ Has that land been donated?
DAVE HAGGERTY:テつ It has not been donated, but we are paying a lease at a very nominal rate, a long‑term lease.

Q.テつ An unknown tennis fan?
DAVE HAGGERTY:テつ Might be.
GORDON SMITH:テつ I think one of the important things to note about this is this is based significantly on some very good incentives to us on the Tavistock Group in Lake Nona and the local governments here to attract us.テつ Part of those incentives include the land and other incentives.

Q.テつ In general you say you'll be moving away from the Evert Academy so player development would be moving.テつ I guess New York probably wasn't the best place for that anyway.テつ Does this just feel like a better fit to put all of that in one place?
DAVE HAGGERTY:テつ I think that once our lease is up and once the facility here is completed, we'll be closing the Boca facility and relocating that here, building on what Patrick said earlier.テつ We think that will be a place where we think we'll be able to have all of our player development.
We see this as a really inclusive area where touring professionals will be able to come, we'll be able to have top players bring their personal coaches and work alongside our player development team.
We really see a great advantage for not just player development but developing players, American players, which is why we've given it a working name of the Home of American Tennis.
GORDON SMITH:テつ I think the important thing is not to emphasize the player development piece, although that's very important to the development of the future of American champions.テつ This will be a much broader facility that will address American tennis broadly from community tennis.
Our entire community tennis department will move here.テつ We'll be doing events here, league championships, we'll have a collegiate facility, we'll be doing all kinds of training here.
This is really a game changer not just for player development but tennis at large.

Q.テつ Will there be a significant number of people who will move from the New York base down here?
DAVE HAGGERTY:テつ Yes.テつ Around 150 people will relocate to Lake Nona from White Plains and from Boca all told when we're done.
GORDON SMITH:テつ We're still doing the analysis on those numbers, but those are the numbers we're analyzing right now.
CHRIS WIDMAIER:テつ To reiterate, this is really giving the USTA its first year‑round outdoor tennis facility where we can grow the game and develop the game year‑round, which was not really possible to do in New York.

Q.テつ You're kidding me.テつ You couldn't have played through this winter (laughter)?
CHRIS WIDMAIER:テつ We tried.テつ We shoveled a few courts, but...
GORDON SMITH:テつ Let me also make clear we will have a substantial continuing presence in New York.テつ Obviously the US Open is our jewel.テつ We will continue to have substantial staffing for the US Open, for the tennis center, for many of our shared services, for our sponsorship and marketing areas.テつ We will continue to have a substantial commitment to New York.

Q.テつ Can you give me a bigger picture of how you've been spread out.テつ Sounds like you've been spread out into different locations and you're bringing a lot of things together in one place.テつ Can you explain how you're bringing them here.
DAVE HAGGERTY:テつ In many ways we're really starting something new.テつ There isn't a facility like this in the world.テつ What we're really trying to do is harness everything from a grassroots level where youngsters start out 10‑and‑under playing on a short court to leagues to adult tournaments to professionals.
Bits and pieces of that may be done all around the country, and will continue to be.テつ But we see this as being a place where people can come and gather together.テつ This will be an inclusive facility that will allow them to really work with one another, have tournaments, have events, as well as training, coaching, programming.
We did talk a bit earlier about the three facilities that we have for player development.テつ I think Patrick had mentioned the New York presence, the NTC, and that will continue.テつ We'll have a presence in Southern California.テつ We have a facility there in Carson.
The main change in late 2016 will be the relocation from Boca up here to Lake Nona.
GORDON SMITH:テつ To add briefly to that.
Basically we've been delivering on our mission, which is to promote and develop the growth of tennis from a glass office building in Westchester County.テつ Now we're going to be delivering the mission from Orlando, Florida, with the finest facility in the country to do it.テつ It will be a real game changer in our ability to deliver on our mission.
PATRICK McENROE:テつ From a player development standpoint, we'll now have the ability I think to do what we've been doing in Boca, what we still do in New York and California, but do it a lot better, service more people, service more coaches, more players that can come with their coach or can come and train with us or alongside us.
Because of the amount of courts, facilities, obviously the weather, all the things that we'll have here, I think it will enable us to do that job a lot better.
It's going to be great to have little kids show up that are just beginning tennis and walk a hundred yards and see our best players in the country practicing, training.
I think it's sort of a watershed moment for all of us in tennis that we're going to be able to hopefully inspire people to get into the game and bring our best talent together more often into one place.

Q.テつ Are you bringing your headquarters here also to Lake Nona?
DAVE HAGGERTY:テつ Actually, we talked a bit about the community tennis piece.テつ The community tennis division will relocate here.テつ One of the benefits of that is we're going to be close to the customer.テつ We're going to be here being able to see the programming that's taking place with all the different adults, juniors.テつ That will be the division that will relocate here, the number that Gordon mentioned a little earlier.テつ That will be the relocation.
In addition, the player development piece will be moving from Boca here, as well.
GORDON SMITH:テつ The corporate headquarters will remain in New York.

Q.テつ Do you have a figure how many people you expect to use this per year?
DAVE HAGGERTY:テつ We're hoping there will be more than 100,000 people that will be programmed here throughout the year.テつ We've done a program analysis where we've looked at what events, whether it's collegiate events, high school‑type events, adult, juniors, and gone through a pretty rigorous analysis.
We also will be inviting our sections to bring their players in, leagues.テつ So as we go through it, we have a pretty detailed analysis of the number of players that can be impacted.

Q.テつ I know in Boca there's about two or three of your kids left in the dorms.テつ Will this reinstitute a dormitory situation once you get to Orlando?
PATRICK McENROE:テつ We will have some dorms on‑site.テつ We won't have that many kids as we have now in Boca that are full‑time there.テつ We will have that availability for special circumstances.
What we've begun to do in Boca the last couple years is we'll bring in a lot more kids on a rotational basis so that we're not bringing them away from home for the entire year, but they'll come, they'll train for a couple weeks.テつ They can bring their coach if they so desire.テつ If not, we communicate with their coach and with their family what they're doing.テつ We will use the dorms for those players that are coming in.
But we're going to be able to be even more inclusive than we've been, which we've made a big push to do that a lot better in the last couple years.テつ We think we're doing a lot better.テつ This will enable us to do a much better job and not only touch a lot more players but I think touch a lot more coaches, as well.

Q.テつ I know at one point the ATP tried building a facility in Ponte Vedra.テつ I know they didn't have the advantage of having an international airport like Orlando.テつ How do you think you'll entice the pros to come and use the facility?
PATRICK McENROE:テつ All I can tell you is we don't have enough courts and facilities currently in Boca to take care of the pros, especially the young pros, that we'd like to.
We're pretty confident that the best players will come.テつ There are obviously always going to be some that are in other areas, but they can come and use the facility for one, two weeks, or 50 weeks a year.
We'll be able to service those players at whatever level they deem appropriate.テつ I believe, based on the amount of players that are already in Florida close to Boca, that we'll have plenty of them come here.

Q.テつ I know you have some employees that span from pros to the community tennis and everything.テつ How are you going to decide who is going where?
GORDON SMITH:テつ We're still two years plus out from that.テつ Those are things that we're analyzing.テつ We really don't have an answer for that at this point.

Q.テつ I understand from the release you're going to have 12 courts that are dedicated strictly to collegiate tennis.テつ Are you considering a bid for the NCAAs and any other sort of tournaments that would be related to college?
DAVE HAGGERTY:テつ The fortunate thing is the University of Central Florida is here, as well.テつ The 12 courts that we talk about will be their facility.テつ They'll be using them for their tennis matches.テつ They'll also continue to have some practice courts on their campus.
We think that gives the opportunity to really have a couple of dual matches at the same time.テつ They can have their men's and women's teams playing simultaneously.テつ Many schools don't have the capability of doing that.
Could this be a place down the road for a college event?テつ Absolutely.テつ But I think first we have to take it one step at a time.テつ We'll work with the University of Central Florida and see what might happen there from any event scheduling that makes sense.

Q.テつ Patrick, is there some idea there will eventually be national junior tournaments maybe from all the age divisions like we saw at the Easter Bowl that will be scheduled to take place in Orlando?
PATRICK McENROE:テつ We're not looking to take any tournaments from already great locations.テつ What we do think is possible is to have new tournaments and create some new tournaments for kids, again, I think down the road, just like the collegiate question that you asked.
Certainly we'll have the ability to host big tournaments, whether that's adult leagues, junior events.テつ So all those options will certainly be on the table.テつ I think it's very exciting for junior tennis that we'll be able to do that.
Like you said, there's not many facilities that can have multiple age groups in one location and we'll have the capability to do that at Lake Nona.
DAVE HAGGERTY:テつ To add to that, we don't see having every event at Lake Nona every year.テつ But I'll give you an example.テつ We know that parents have to fly to multiple locations with their children around holiday periods at times.テつ There may be an 18s and a 16s event, there may be a 14s and a 12s in a different location.テつ Parents aren't able to be with their kids, there's multiple locations.
This could be an opportunity every couple of years to have an event like that here.テつ I don't foresee Kalamazoo or SanDiego or places like that coming here.テつ But I think that will be part of our transparency, part of our communication that we'll have in the upcoming months as we begin to do the planning for the future.

Q.テつ It sounded like maybe the Winter Nationals, or haven't you gotten any specifics?
DAVE HAGGERTY:テつ No.テつ I use that an example of timing.テつ Certainly that could potentially be one, but we have no plans at this point to say that the Winter Nationals will be here in 2016, for example.テつ We don't have that, no.

Q.テつ What is your timetable for starting construction?テつ When would you expect the facility to be completed and open?
GORDON SMITH:テつ Our plan is to start construction this fall and have completion in the fourth quarter of 2016 and be operating shortly thereafter.

Q. テつDid you look at any other sites in Florida or anywhere else in the country?
GORDON SMITH:テつ We considered and had discussions with sites in Florida, in the southwest and other areas in the southeast.

Q.テつ Can you be any more specific and can you tell us why you picked the Lake Nona area?
GORDON SMITH:テつ I won't be specific about other locations.テつ We had some great conversations with some outstanding communities.
Frankly, the combination of government support, University of Central Florida, the type of development that the Tavistock Site Group has here at Lake Nona, the combination of all of those things really set Lake Nona and Orlando apart from any of the other competitors.
In the end, it was a very easy decision for us.テつ We're very excited about it.

Q.テつ Jim Loehr, Loehr Groppel Etcheberry, has been at Lake Nona for years.テつ Are you going to be involved with him?
GORDON SMITH:テつ They're great friends of tennis.テつ We have great respect for them.テつ We haven't had any specific discussions with them, but I'm confident we'll be working closely with them going forward.
DAVE HAGGERTY:テつ I did have a conversation with Jim.テつ When we first began to look, Jim reached out and said, I am here.テつ I couldn't tell you a better place and a better group of people to be working with.
Again, as Gordon said, we don't have any specific working relationship other than an endorsement from someone that we have a high regard for.

Q.テつ Obviously you're going to have hard courts, I presume clay.テつ What about grass and any covered or indoor courts?
PATRICK McENROE:テつ We're going to have red clay, green clay and hard courts.テつ We will have some indoor courts, as well.
We decided to not go with grass courts.テつ I've never really played on a grass court in this country that's similar to what we play on at Wimbledon.テつ So, to be honest, I didn't think it was really worth it to us to do that.
Most of the players will like to practice on hard courts and then go to Wimbledon and practice in England where the grass is a lot more similar to what it is at Wimbledon.
It's pretty hard to get grass that's really, really good in this country.テつ It's obviously very costly to do that.テつ I didn't think that was a necessity for this particular project.

Q.テつ Has there been any discussion with the Sony Open down in Miami, any possibility of it moving there sometime?テつ They always have trouble with lawsuits over the site.テつ Any discussions at all?
DAVE HAGGERTY:テつ No, we've not had any conversations regarding that.

Q.テつ Could that be a possibility if they have trouble trying to get through battles in courts down here?
DAVE HAGGERTY:テつ It's hard to predict.テつ Certainly we could have a conversation.テつ We don't own that event.テつ I think they probably would have to think about exactly what makes sense for them.
One of the drawing factors for the players is Miami, as you well know, the feeling that the players have in Miami, being in an international destination.テつ But we've not had any conversations.
Who knows, it's certainly something we could be open to.テつ We're not in a position to control that discussion.

Q.テつ Have you named a head director or head professional for the site or will you at some point?
GORDON SMITH:テつ The answer to that is no, we have not.テつ And the answer to that is yes, we will.

Q.テつ What kind of business arrangement did you have with the Evert Tennis Academy and were they taken by surprise at all that you would be vacating their premises?
GORDON SMITH:テつ We've had ongoing discussions with them for some time.テつ We've been in need of additional space.テつ There's no way to expand their facility to provide that space to us.テつ They've known for some time that we've been looking.
We've had a very positive relationship with them.テつ I think it's worked to the advantage of both.テつ They really opened their doors to us in a very positive way.
But we both realized that what we needed and the facility they had, there wasn't a way to move forward after this lease was up, so this is why this happened.

Q.テつ You've been renting space from them up until now?
GORDON SMITH:テつ Exactly.

Q.テつ What are the players' reactions?テつ Some bought homes in Boca.テつ I assume you've reached out to them.
PATRICK McENROE:テつ I think their reaction is going to be extremely positive.テつ Tennis players are used to moving around a lot.テつ Many of the players that have moved to Boca have done it right out of college, or in the case of some of the young females, have been living in Boca in the dorms.
For them to pick up and move quite honestly is not that big of a deal.テつ I've done it before.テつ Many players have done it.
They know that we've been stretched as far as the courts, our training facilities.テつ As Gordon said, we've been really happy with what we've been doing at Evert.テつ They've been a great partner for us.テつ At the same time we have been limited in some of the things we've been able to do and the amount of players that we can service.
We think that Orlando is a great place to live.テつ There's lots of opportunities to find homes at all different levels, whether it's condominiums, houses, et cetera.テつ We believe that many of the players will jump at the opportunity to come here.
GORDON SMITH:テつ When the players see the training facilities they'll have here with red clay, green clay, hard courts, indoors, physical training, therapy, they'll be so excited that they'll be tremendously positive about it.

Q.テつ When did this first start?テつ Who had the first idea?
DAVE HAGGERTY:テつ Actually, this all started with a meeting in December of 2012 here in Florida, in Orlando.テつ We had a meeting to discuss possibilities and opportunities.テつ It started from something that could be perhaps simply a relocation of player development.
It evolved into a game changer, something that is for the USTA, from community tennis, from the grassroots level, to player development as well.テつ It started back then.テつ We've had some great developments and conversations with many partners here over the 18 months to come to the place where we are now to be able to make an announcement.

Q.テつ Who was in that meeting?
DAVE HAGGERTY:テつ It was a combination of Patrick, Virgil Christian, a few others from the USTA, some people from Tavistock Group, the Chamber of Commerce of Florida.

Q.テつ Can you give us more information about the incentives in general.テつ What is involved?テつ What is the cost on the land?
GORDON SMITH:テつ There are a variety of incentives.テつ I can't give you chapter and verse on all of them.
With regard to the Tavistock Group, basically we are getting a long‑term lease on the land for a nominal payment, essentially free.テつ We are getting incentives, tax incentives, from government agencies.テつ We're getting some grants from the state for transportation construction purposes.テつ We have signed a sponsorship deal with Visit Orlando so that Orlando will be connected to the US Open and to tennis in a visitation way.
It's a variety.テつ It's actually eight different entities involved with the incentives.

Q.テつ What kind of involvement are you going to be having, if any, with the so‑called cluster of sports and human performance businesses out there?テつ Nearby, Lake Nona got biomedical research groups to come there.テつ What is your involvement with the sports cluster?
DAVE HAGGERTY:テつ Our vision is that this would be a fantastic place for other tennis‑related companies or sports companies to relocate because of what is here in Lake Nona.
In a few days we will be having a conference call with some of our allied organizations and companies in the Tennis Industry Association to make them aware of what we're doing, which may be of interest to some.テつ Again, I think that's how we are going to proceed.

Q.テつ Is that part of the deal that you then go out and promote to these people that you have relationships with that, Hey, you might want to come and move here, too?
DAVE HAGGERTY:テつ I wouldn't say it's part of a deal.テつ I would say we see the synergy.テつ In a past life that I was involved in, the ski business has an awful lot of companies in the Park City, Utah, area.テつ You saw a lot of talent in that area.テつ It was close to mountains where skiing and snowboarding happens.テつ It was attractive to companies to locate there and have synergy.
There could be.テつ May not be, but there could be that same sort of synergy that could happen here where tennis is developed.テつ We'll do some things with the University of Central Florida.テつ We could see a professional tennis management that could happen.テつ There are lots of possibilities.
But, again, I think we'll take that a step at a time.テつ We'll talk collaboratively with the industry and see if there's something that makes sense to them.

Q.テつ When you were doing the research, did you turn to the world of golf and see how they run the TPC courses, specifically the TPC in Ponte Vedra, how they open it up to pros to come in there and work on things?
GORDON SMITH:テつ I think that's a much narrower issue.テつ That would be almost a purely player development issue.テつ Again, the emphasis here needs to be that this may have been started being driven by needing to move our player development, but it's really changed and morphed over time into an overall community tennis facility that will address not just the professional piece of tennis but tennis from 10‑and‑under all the way through juniors, adult league players, collegiate, and then to professional.
I don't think golf has anything remotely approaching a model like this.

Q.テつ Will there be a technology component to the facility, as well, a place where video analysis, motion capture?
GORDON SMITH:テつ I'll start with the facility and let Patrick add on.
The beauty the Lake Nona is it is as digitally a cutting edge a community as there is.テつ We'll take full advantage of that throughout the facility.
PATRICK McENROE:テつ Certainly part of our emphasis in player development is always on getting better and trying to use technology to help us.テつ We know that most of the work is done on the court, hard work, et cetera.テつ But we use some of that technology already.テつ Certainly the opportunity to do it here, the opportunity to use the indoor courts, which obviously is a big part of us wanting to do that in a controlled environment, we'll be able to do that here.
The other part of this is also being able to further educate coaches and be part of that process.テつ We think we'll have some great technology available to us to help us do that, as well.

Q.テつ Will there be an expansion in the number of national coaches?テつ Will you be hiring more?
PATRICK McENROE:テつ We haven't done that analysis yet, but we've got a pretty good number of coaches at the moment.テつ Again, we're going to be an inclusive program here so we're going to be inviting a lot of outside coaches and section teams to come and train with us.
That doesn't necessarily mean we'll need to hire more coaches for our own staff.テつ But that's something obviously we evaluate every year and we'll continue to evaluate over the next couple of years.

Q.テつ Was there an element of being in a medical community that was a draw for you, knowing there is high‑level medical care within Lake Nona?
GORDON SMITH:テつ I think the fact that Lake Nona is very environmentally friendly, it's all about healthy lifestyles, the symbiotic relationship between all of that and tennis, the medical center, all of that was a significant factor in us being attracted to Lake Nona.

Q.テつ It was mentioned Jim could help with the development program.テつ Wondering why you haven't gone in that direction in the past on a full‑time basis when we hear so often that mental toughness is what separates the European players from the Americans?
PATRICK McENROE:テつ We've been using Jim Loehr for years.テつ He's a great resource for us.テつ He's a great friend to us.テつ We've had him come and do workshops for us, for our coaches, in the last couple years.テつ He works individually with players that we think he can help.テつ Having him in closer proximity to us, we'll hopefully be able to use him more.
He's been a great friend to the USTA, player development, and tennis in general.テつ We expect that to continue and even do more for us.

Q.テつ Maybe just having a general sports psychologist on an everyday basis.
PATRICK McENROE:テつ We have a full‑time person that works with us in our program.テつ Jim is incredibly busy and successful with what he does.テつ To be quite frank, I'm not sure we could afford him.
But we have a mental skills specialist on staff that we've just hired in the last 18 months as a full‑time person.テつ Trust me, he uses the expertise that Jim has available and has developed for many years to his advantage, as well.

Q.テつ As far as the Orange Bowl in Plantation, are you happy with that?テつ Are there contractual arrangements for the future?
DAVE HAGGERTY:テつ I can tell you that I was at the Orange Bowl this year.テつ They did a terrific job at Plantation with the event.
Again, I think we are going to be looking at a lot of different things.テつ We've had no discussions, made no plans that are concrete.テつ But it's certainly something that we'll be able to consider over the next couple years.
We're still a couple years away from having the ability to even contemplate hosting any event.
CHRIS WIDMAIER:テつ I'd like to thank everybody for taking the time and showing the interest in this historic announcement of ours.テつ I'd also like to thank Dave, Gordon and Patrick.

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