Saturday, December 05, 2009

Has FCR "refuted" the claim that the naming-rights deal was cut in half?

According to Sports Business Daily, the Nets Refute Claim That Barclays Naming-Rights Deal Cut In Half, as I and others reported yesterday.

The rest of the story is subscription-only, but yesterday Forest City Ratner spokesman Joe DePlasco claimed that the agreement includes "the arena, team and hospitality assets."

Maybe it hasn't been cut in half, but there's no reason to think it adds up to $20 million a year. In other words, they may be saying that recent reports are imprecise, but they're changing the subject by not answering the more important question: what the deal is worth.

According to the Barclays Center Project Preliminary Official Statement prepared by Goldman Sachs, a chart (p. 95 of the PDF) summarizes the allocation of certain revenues expected to be generated from the Arena Project between ArenaCo and New Jersey Basketball pursuant to various agreement.

As seen above, under ArenaCo, it allocates $10,000,000 annually in Naming Rights Fees.

Under New Jersey Basketball, it allocates only "Certain fees under Naming Rights Agreement."

If the latter sum were worth $10 million a year, wouldn't it be spelled out?

1 comment:

  1. If you were shelling out $10 million a year for naming rights, how much would you be willing to pay for food and drink ("hospitality assets?") on top of that? Wouldn't you insist on that being included -- except for Jay-Z's Cristal, perhaps?