Usually, the owner loses money anyway, especially in rooms where the regular daily trade is already decent. The more players a good room draws to a tournament, the more money they lose because they have to displace normal business that would have been there without the tournament. Tournament players just don't spend the kind of money that social players do.
Roger
Right, and if I hear your pool room is having a tournament, drive to your pool room on Saturday and am told I can't play because I didn't sign up a week in advance what kind of an impression do you think I have of your pool room? Do I have to sign up a week in advance to get a hamburger and fries?
The tournament can be two things. It can be a way to promote the room to more than just the regulars who are in there every day or it can be limited to the regulars and unfriendly to outsiders. If the room is swimming in cash from the regulars then by all means make it difficult for outsiders to play there.
I remember the first 9 ball tournament I played in - handicapped tournament. My opponent was a regular in the place and he was explaining the rules of 9 ball to me. I was rated a stronger player than him. Every week a regular won the tournament. Eventually the only people who showed up for the tournament were the regulars and it went from a weekly to a monthly tournament because they couldn't attract enough people to have a tournament every week. If there are options people will go to the place where they are treated the best.