Thursday, December 10, 2009

Forbes: Nets value keeps declining, 5200 free tickets a game distributed

The value of the Nets keeps declining, and an astonishing number of free tickets are being distributed.

From Forbes's The Business Of Basketball:
Several franchises are reeling from bad management more than a sour economy.... Then there's the New Jersey Nets, whose owner, Bruce Ratner, made the brilliant announcement after he bought the team in 2004 that he wanted to move them to Brooklyn as soon as he got a new arena. Talk about losing fans in a hurry. The Nets handed out 5,200 comp tickets per game last season to try and get fans to show up at their current home, the Izod Center. The Nets set an NBA record by losing their first 18 games this season and will not get a new arena in Brooklyn until at least 2011, if they ever do. The Nets are now worth $269 million, $31 million less than what Ratner paid.
The new arena wouldn't come until at least 2012--but it could significantly increase the value of the team.

Value declines, debt increases

Last year, according to Forbes, the team was worth $295 million, down from $325 million the previous year. The Nets are again ranked 26th out of 30 in value.

The Nets' debt/value ratio, last year a league-leading 71%, is now up to 77%.

Free tickets

If they are distributing 5200 free tickets a game--a number new to me--that's more than one-quarter of the house. (Ticket revenue last year went down 29%.)

Maybe that's part of why the team could give only 15% of total tickets away in the planned Brooklyn arena without incurring a license fee.

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