Makes sense to me. I’ll go further and state that large tournaments attract new players by virtue of the publicity generated as opposed to the smallish local competitions which aren’t even on the local media radar screen.
At one time, I analyzed this by graphing attendance at traditional tournaments (held at the same time in roughly the same format) over a period of 15 years. The presence of a “big” tournament, like a U.S. Open or Software Toolworks, depressed attendance at all other tournaments for six to nine months. I have long since given up trying to convince people with mere facts, however.