Friday, March 27, 2009

The Barclays naming rights deal may be well under $400 million after all

Maybe, as British news report with an unnamed source indicates, Barclays Capital would pay much less than the reported $400 million for the Atlantic Yards arena naming rights deal

One of the lingering questions of the AY saga is why Barclays has stuck with the deal so steadfastly. Sure, they believed--not without evidence--that a Brooklyn arena might be a way to splash their name across America.

But they signed up in January 2007 for a Frank Gehry arena, not an "inspired by Frank Gehry arena" or a "Frank Gehry arena produced by architects who happen to work for someone else."

So as New Jersey Nets CEO (Chief Exaggeration Officer, to NLG) Brett Yormark does damage control about Gehry's role, maybe Barclays has already renegotiated the deal downward.

Reports the Independent:
The deal is a 20-year commitment, originally valued between $300m and $400m, but the bank is believed to have renegotiated the cost down since then.

A theory about the leak

The financially savvy British-born Brooklynite who goes by (on the Internet) Gringcorp suggests an explanation:
I'm going to speculate a little about why this little nugget got out there at this moment in time. If you have the time, go read my earlier rant about the relationship between financial journalists and their PR handlers. I'm guessing that the reporter, not unacquainted with matters of reporting hygiene, went to Barclays for comment. Now when a US-focused scumbag (I use the term fondly) asks Barclays PR about their deal, they're bound to say "we remain fully committed to the fragrant Mr. Ratner..." The intention here is to keep the heat off Ratner and his political catamites in New York.

But the Indy doesn't have that many readers in the US... So one assumes that if their man in New York goes to the PR, the PR will guess that the bigger story for the Indy readers is why a venerable UK high street bank is flinging money at a second-rate sports franchise in the middle of a financial nuclear winter. I imagine the bank PR might have said something like "this is strictly not for attribution but we're not on the hook for anywhere near as much. We're not that mental".


Questions pending

He could be wrong, he admits, but the questions should be flowing.

What sum has Barclays committed?

What exactly is Gehry doing on the project?

Less money from Barclays would make it ever more important to shave arena costs down, and/or extract new subsidies.

1 comment:

  1. Gumby may be correct. makes a lot of sense.

    But i think it is safe to say that at this point, over two years after announcing the naming deal, nobody outside of Ratner, Barclays and maybe their good friends Goldman Sachs really knows what is involved in their deal.

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