Finances change the game for the China Open

Despite increasing attendance and tennis' roaring popularity in China, the China Open is still battling a financial deficit and lacks revenue streams.

While earning acclaim for its contribution to promoting tennis, the China Open is struggling financially. The massive investment for facility upgrades, prize money and operational costs have brought heavy burdens.

Chinese sports media giant Titan Sports has reported the annual cost of hosting the tournament reached 120 million yuan ($19.6 million) in 2011 and the total financial loss accumulated to almost 300 million yuan last year.

This financial anemia contrasts with the exuberance at the National Tennis Center, where attendance has steadily increased over the past nine years, while merchandizing sales are up 60 percent over 2006, the organizing committee reported.

However, the boom has not yet translated into profit.

Tournament director Alfred Zhang admitted the event has not achieved a financial balance despite the 20 percent increase of annual income.

"We are almost there, and we still have to optimize our income structure," Zhang said.

"Hopefully next year we will make ends meet."

A major problem is the lack of broadcast rights, organizers said.

The tournament must provide free rights to State-owned China Central Television.

Beijing Sport University sports industry professor Xiao Shuhong said watching free TV is the biggest obstacle for sporting events' profitability.

"Professional sports events abroad like the English Premier League and the National Basketball Association all benefit a lot from selling broadcasting rights. But it won't happen in China due to our special situation," Xiao said.

China Business Journal reported the tournament grabbed 125 million yuan last year. Nearly 80 percent of it came from 11 sponsors' endorsement revenues.

The report also cited the French Open, pointing out TV rights income contributed at least 45 percent of the event's revenue. It was the top provider last year. Sponsorship ranked third.