Tuesday, April 14, 2009

As Newark mayor takes swipe at Izod, facility glut in NY area must make Brooklyn boosters a tad uneasy

Last week Sports Business Journal reported that the Izod Center at the Meadowlands might be getting an upgrade, equipping it for the unlikely future of an ever-extended Nets residency.

Yesterday, Newark Mayor Cory Booker fired back, sending a forceful letter to Gov. Jon Corzine:
It is fiscally irresponsible, particularly in these difficult economic times, for the State of New Jersey to expend a single additional public dollar or incur additional debt to support an outdated facility to retain the Nets when a state-of-the-art, world class center already exists in Newark. I urge you to veto the NJSEA minutes and not let this project move ahead.

The comments on the Star-Ledger web site run the gamut from opposition to support. Corzine, who's trying to get re-elected, didn't immediately respond; any decision on the rivalry between the Izod Center and the Prudential Center in Newark may wait until after the election.

Crowded marketplace

Meanwhile, an article yesterday in Sports Business Journal focused on the rivalry for sponsorship and attendance among the new and coming sports facilities in the New York area.

The Prudential Center is portrayed as in reasonably good shape:
“First-mover advantage, baby,” is what Devils owner Jeff Vanderbeek says when asked about the benefit of opening 1 1/2 years ahead of the ballparks and even further ahead of everything else.

The longer the recession drags on, the more thankful he is to have broken from the gate first. His major sponsors are locked in long term, and all of his club-seat and suite leases run at least through 2010. And yet, even Vanderbeek turns queasy when contemplating the fallout if the recession were to drag on.

His season-ticket base of about 8,000 is 5 percent to 10 percent short of where he thought it would be this year. He expected to fill about five more suites and book another $1 million in sponsorships. He worries that next year could be worse.

“We’re OK so far, but, look, the risk is there,” said Vanderbeek, who headed private equity and strategy for Lehman Brothers before buying the Devils. “We have 4,000 tickets less than $30, but at a lot of levels this is a high-priced ticket. And the higher end is where the question is. What will hold up? Who will hold up? We’re going to find out.”


What about Brooklyn?

The Newark arena needs the Nets, but the article does not try to evaluate the chances for the Brooklyn arena and, in fact, gets some basic facts wrong:
And then there is Nets owner Bruce Ratner, still angling to build a $950 million arena as part of a $3.5 billion project in Brooklyn...

As approved, the project would cost $4 billion, with a $637.2 million arena. The price tag did go up to $950 million, but the developer is said to be drastically cutting costs. So any arena price tag is very speculative.

The article makes the point that facility builders were lucky to lock in sponsors. That may mean the Nets are in good shape. But did Barclays reaffirm its deal at full freight? We can't be sure.

1 comment:

  1. According to published reports, the pru center turned a profit during it's first year of operation and was one of the busiest arenas in the country. And that was despite facing a national economic recession which began in december of 2007, shortly after the pru center opened for business.

    So i disagree with your statement that pru center "needs the nets". Pru Center WANTS the nets because they would undoubtebly improve the pru center's bottom-line, but that's quite different than NEEDING the nets to survive.

    Mayor Booker wants the nets at pru center because they would bring fans, businesses and national attention to newark and jump-start the economic revitalization of the city, which has already begun under his leadership.

    ReplyDelete