Saturday, March 14, 2009

In unskeptical Bloomberg News article (in the Times), Yormark asserts 2011 arena opening; Newark's Booker still optimistic

In publishing a Bloomberg News article quoting Nets CEO Brett Yormark's prediction of a 2011 Brooklyn arena opening--an article in which Yormark was not challenged, nor was his dubious record of predictions noted--the New York Times sports section today has sunk into the swamp.

[Update: Despite an online statement that "A version of this article appeared in print on March 14, 2009, on page D2 of the New York edition," it's not in my copy. Perhaps it appeared in the early edition, before the Knicks game report came in.]

The article fails to include the disclaimer that the parent New York Times Company is business partners with Atlantic Yards developer Forest City Ratner; such a disclosure might have served to alert editors to add a dollop of skepticism.

The Bloomberg News article is based on a Bloomberg Television interview; it's the Bloomberg way of repurposing news in different media.

But if Newark's public radio station, WBGO, had an associated news service, it would've produced its own sole-source article, quoting Newark Mayor Cory Booker as saying he's optimistic about bringing the Nets to the new Prudential Center.

Suite sales static

The article, headlined Nets Have Sights Set on Brooklyn in 2011-12, begins:
The Nets are committed to moving to a yet-to-be-built Brooklyn arena for the 2011-12 season, overcoming economic concerns and legal opposition, Brett Yormark, the team’s chief executive, said.

“It will happen,” Yormark said in an interview for Bloomberg Television’s “For the Record.” “We’ll be there for the ’11-’12 season. We’ve presold 20 percent of our suites. We’ve got 8 of our 14 founding partnerships already completely signed. Next week, we’ll announce our ninth.


NoLandGrab observed that, last May, ten months ago, Yormark was boasting about having pre-sold 20% of the suites, to "friends and family"--which means no one else has signed on. (Here's more from DDDB.)

He wasn't asked about the 32-month construction schedule, which, to my mind, makes 2012 a more likely best-case scenario.

Lack of skepticism

Oddly enough, the interview is conducted by Scott Soshnick, who elsewhere has demonstrated notable skepticism about sports team hype.

The interview opens with shots of admiring press coverage of Yormark--sans, of course, that Newark Star-Ledger article in which he claimed little knowledge of P.T. Barnum--which is a sign that there will be few tough questions.

"At the end of the day, I am judged with how much revenue we can generate," Yormark tells Soshnick. "When you really break it down, it's tickets and sponsorships."

Translation: he's willing to do what it takes to generate that revenue. Including making things up. And, as he tells his interviewer, putting corporate logos on uniforms: "I think it would be a great thing." After all, they do that in soccer, and in NASCAR, which he formerly ran.

The fundamental paradox

Consider that Yormark has been selling sponsorships and luxury suites for the Brooklyn arena, and no one knows what the arena would look like. Is this still Frank Gehry's arena? What does it mean to severely cut costs on Gehry's once-$950 million design?

Yormark's challenge is to paper over that difference.

More stretchers

"You've got to have price integrity," Yormark tells his interview. One thing season ticketholders said is that they don't want to have to pay for preseason games. Unmentioned: the Nets are essentially giving tickets away.

"I spend a lot of time in Brooklyn," he adds. "And I meet with kids all the time. I meet with thousands of kids of every day. And this project is going to enable them to dream a little bit bigger and bolder than they ever have. It's going to create jobs. It's going to create affordable housing. It will happen. We'll be there for the 11-12 season."

Thousands of kids every day? Is that like getting up every day at 3:30 a.m.?

Breaking ground in summer?

The article states:
Yormark said the team is awaiting resolution of an eminent-domain lawsuit before breaking ground on the Barclays Center. That may come in late spring or early summer, Barry Baum, a spokesman for the team’s owner, Bruce Ratner, said in an e-mail message.

“The table has been set,” Yormark said. “We feel very confident about the financing. We feel very confident about just the project in general, and once we get through this final piece of litigation, we’ll be in the accelerated mode to break ground and get ready to open.”


Well, while it's likely that the pending eminent domain case will be dismissed by a state appellate court, we don't know how long it will take for appeals in that case and the case challenging the environmental review to be addressed by the Court of Appeals. Nor do we know whether legal challenges will emerge if and when the Empire State Development Corporation (ESDC) pursues eminent domain.

But there's a good chance that, just as Yormark's predictions in the past have been proven wrong, this one will be too.

Keep in mind that the developer has reportedly been seeking federal funds to pay for a new railyard, and until that railyard is dealt with the project is stalled. Meanwhile, the ESDC's Modified General Project Plan states:
FCRC shall be required to consummate such purchase prior to or contemporaneously with the first acquisition by ESDC of a parcel within the Project Site not owned by the MTA.

What about Newark?

In the interview, Yormark continued to say that the Prudential Center was not an option:
“Would it make sense for another tenant to share that venue with the Devils? Maybe, but it won’t be the Nets. As much as we respect Cory [Booker] and everything he’s done for the city of Newark, we will not be there.”

Of course, three months ago, Forest City Enterprises said it was committed to Fresno.

Well, Booker was interviewed Thursday, March 12, on Newark Today with Mayor Cory Booker, a public affairs show on WGBO, Newark's public radio station, hosted by Andrew Meyer.

At about 12:45, Meyer asked what was going on around the Prudential Center, where relatively little development has occurred. "We've got an arena now and it is generating a tremendous amount of visitorship to our city. I'm working assiduously to try to make sure that we get more things in our city to drive even more, most particularly the Nets, frankly."

At 15:33, Meyer again brought up the Nets, noting that they'll play two preseason games in October. "How do you feel about this?" he asked the Mayor.

"I'm excited, but this is not the goal which I seek," Booker responded. "I really do seek to find a win-win for our entire state, to keep the team here in New Jersey. I'll be blunt, that there's a lot of conversations and a lot of work being done on it.... trying to make sure this happens for our city. We don't want to lose the Nets from New Jersey and we do believe Newark is the place they should play. We know the bottom line is the team could make more money. New Jersey could keep the tax revenue... Newark could generate more excitement around our arena."

Whose advantage?

At about 17:47, Meyer again brought up the Nets: "What is the latest with the Nets? We've asked you about this the last couple of shows. You said 'I might have a couple of ownership groups interested.' With each passing day, with each passing week that there's nothing really said, movement to Brooklyn or movement to Newark, whose advantage does that work out to, ours or New York's?"

"I want to say it works to New Jersey's advantage, not to parse between the Meadowlands and Newark," Booker responded. "Look, the Ratner project is not making progress. I think we're seeing a lot of legal challenges there. I think we're seeing a lot of problems. To build an arena in this economic climate, especially along the lines of what they've said is going to be a very difficult thing to do, and it makes me more optimistic that we'll be able to keep the team in New Jersey."

Well, those legal challenges are diminishing. I think the economics--and, ultimately, the effort to issue bonds--will loom even bigger than the legal challenges.

At about 21:00, there's some more discussion by Booker about cooperation between Newark and the Meadowlands, home of the Izod Center. "As a matter of months ago, there was a lot of tensions and disagreements between the Meadowlands and Newark... We're going to find a way to work together."

2 comments:

  1. Great re-cap and analysis, norman.

    Bloomberg-ny times-ratner: the unholy alliance.

    Don't be surprised if mayor booker starts pulling strings ... if he hasn't done so already ... with his close pal, president obama. Booker, as well as governor corzine, seem very confident about keeping the nets in jersey.

    Obama will be making a lot of high level judicial appointments in the coming years. I'm sure that new york's appellate judges are well aware of that, and wouldn't want to disappoint obama with any of their pending or upcoming rulings.

    Again, great re-cap and analysis, norman. Love your work.

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  2. I don't think judges work that way... but if you have evidence that they do, send it on.

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