Try free tournaments. I run a free 3 strike tournament every second Friday of the month. Do it at 8 pm and new people come out the woodwork to play. If it's free they don't feel pressure. I know 5 bucks is nothing but I've tried that. Free actually added to attendance.
Also. Come up with awards for people other than the winners. I give out a prize to the first person knocked out. I also give a prize to the person with the most kills (get a kill if they issued someone their third strike)
I also think it helps that my location isn't frequented by the best players in the world. Everyone down to the newest newbie has a shot.