Tuesday, April 22, 2008

Newark option gets more realistic, even as Nets seek Euro companies for Gehry arena

Forest City Ratner has no intention of moving the Nets to Newark, not even as an interim solution while the Barclays Center is being built. However, suggests the Newark Star-Ledger's editorial board in a blog commentary headlined Newark hoop dreams, the New Jersey Sports and Exposition Authority may be willing to make a move--though not an interim one--easier.

The Authority owns the Izod Center at the Meadowlands and, if the Nets were to leave for a venue other than Brooklyn (or Queens), the penalty this year would be $12 million (though it would decline in subsequent years).

Long-term solution?

Comments the Star-Ledger:
That clause was generally considered to be anti-Newark. Considering that the authority is a state agency, the provision seemed as hideous and out of place as a giant, psychedelic Ferris wheel in a swamp.

Something has happened. The hateful clause is being explained as a nonhostile means of preventing the Nets from pitting the Meadowlands against Newark. It was meant to avoid a bidding war for a short-term contract while the Brooklyn arena was built.

In fact, sources have told The Star-Ledger editorial board that if the Nets sign a long-term deal to play in Newark, the sports authority would waive that clause and happily cooperate with the Prudential Center for the greater glory and profit of both New Jersey venues.


A long-term deal is not, however, an enticement for the Nets to "test" Newark for three or more years while the Brooklyn arena is under construction, assuming that happens.

Even if the Nets consider the Newark option--and surely they must have a spreadsheet detailing potential new revenues, new costs, and the limits of being the tenant in someone else's arena--Newark doesn't become realistic until and unless Atlantic Yards finally implodes.

So, if the Nets move to Newark, as the commentary suggests, it will because they are sold to some local investors.

Showing confidence

Indeed, despite the record-setting $950 million price tag for the Atlantic Yards arena, Nets officials are confident they can piggyback on the Barclays Center naming rights deal and entice some more European companies to investment, reported the Record yesterday, in an article headlined Can the Nets afford to move to Brooklyn?

And starchitect Frank Gehry, with his international reputation, is the secret weapon.

Paying for it all

And there's some calculation behind all the marketing moves. The Record reports:
Chicago-based sports marketing consultant Marc Ganis, who calls the Brooklyn arena cost estimate "mind-boggling," said pro teams can obtain financing against reliable revenue streams, such as naming rights, sponsorships and advertising partnerships. This "contractually obligated income," including suite and premium ticket sales, means it may be somewhat less daunting to build an arena these days than other development projects.

And that's why the arena's moving ahead, while Miss Brooklyn awaits an anchor tenant.

Arena, 2011?

The article suggests that critics like myself are right when we suggest that 2011, not the 2010, is the likely best-case scenario for a Brooklyn arena:
The Nets will remain at the Izod Center in 2008-09 and 2009-10 and probably will play an additional season in East Rutherford unless an appellate court ruling on an environmental challenge to the plan is reached quickly this fall.


Nets attendance

Another article from the Record reminds us that official attendance and gate count are not necessarily the same thing:
The Nets ranked 21st of 30 NBA teams in attendance this season, with an official tally of 15,656 per game. The average turnstile count — the number of fans actually in the Izod Center — was 12,673 in a building with a 19,990 capacity for pro basketball.

1 comment:

  1. In regard to reticence about "the limits of being the tenant in someone else's arena", let's be clear here. The City of Newark, not the Devils, owns the Prudential Center, just as the NJ Sports and Exposition Authority owns the Izod Center. The Nets don't own the Izod Center. The Devils don't own the Prudential Center. I'm sure an accommodation could be worked out between the Devils and Nets. After all, they don't compete in the same sport nor even for the same fans. I am equally certain that the penalty built into the NJ Sports and Exposition Authority contract could be entirely eliminated by renegotiation, since the State of New Jersey has every reason to see the Prudential Center succeed and very little hope that the Izod Center, an outdated facility, will suddenly experience a magical renaissance. The State of New Jersey is not the enemy of the City of Newark. We're all on the same team.

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