Tuesday, December 08, 2009

According to bond deal, Nets in Brooklyn could only give 15% of the tickets away (without paying a larger license fee)

Well, we all know the Nets paper the house at the Izod Center in New Jersey, but now we know how many tickets the team could reasonably give away in a new Brooklyn arena: 15%.

From the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs):
Except as otherwise described, New Jersey Basketball shall have absolute discretion in determining the ticket prices for admission to the Arena for all Home Games and Playoff Games. However, in no event shall New Jersey Basketball issue complimentary tickets representing more than 15% of the Arena’s aggregate seating and standing room capacity for any game played on a Home Date. In the event that New Jersey Basketball exceeds this 15% limit on the number of allowable complimentary tickets for a particular game, the value of such excess tickets shall be included in Net Ticket Revenue. For the purpose of Net Ticket Revenue calculations, the value of each such excess ticket attributable to a particular game shall be deemed to be the lowest priced ticket available for that game.
Why is Net Ticket Revenue important? Because the team (New Jersey Basketball) would be obligated to make payments each year to the arena operator (ArenaCo) for the use and occupancy of the Arena, and one formulation of that license payment involves 10% of Net Ticket Revenue.

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