Sunday, July 11, 2010

In 20 months, Nets suite sales nudge from "about 30 percent" to less than 34 percent; top price has declined more than 21 percent

Either Nets Sports & Entertainment CEO Brett Yormark was spinning very, very hard back in 2008 or Nets suite sales have really slowed down--or both.

Since May 2008, 26 months ago, they've only sold nine suites, by my count, given that 26 were sold to insiders and the total sold is now 35.

(It's also possible that some who initially committed have backed out.)

Opening promises

On 5/5/08, Crain's New York Business reported:
Already, 20% of the 130 luxury boxes have been sold to “friends and family,” says Nets Sports Entertainment CEO Brett Yormark.
That's 26 suites.

In an 11/17/08 interview with the never-skeptical Alexis Glick of Fox Business News, Yormark stated, "We’ll be in Brooklyn for the 11-12 NBA season. We’ll probably be in Brooklyn actively in the summer of 2011. So give us a little time to gain some traction. We’ve presold our suites to the tune of about 30 percent."

That would mean 39 suites, if the total at that time was still 130. Or that would mean 30 suites, if the number had dipped to 100 (as was announced ten months later, in September 2009).

The percentage drops

But Yormark is what we might call an unreliable narrator.

On 3/13/09, Bloomberg News quoted Yormark as saying "We’ve pre-sold 20 percent of our suites." That suggests his previous statements were a serious overestimate.

That 20 percent number would mean 26 suites out of 130--remember, the reduction was not announced until September 2009--or 20 suites out of 100.

Well, Crain's New York Business reports, in an article today headlined Suite deals at Barclays Center:
So far, only 35 of the 104 suites are spoken for, as the arena, beset by delays, will be one of the last to market.
That's less than 34 percent.

Suites discounted 21 percent

Crain's notes the prices range from $215,000 to about $425,000 a year, "seemingly a bargain" when compared to other luxury product at area sports facilities.

Unmentioned: in March 2008, when 130 suites went on sale, the average price was $300,000 and the top price $540,000.

The decline from $540,000 to $425,000 represents a 21 percent discount.

In its December 2006 report to the Empire State Development Corporation, KPMG said the Nets' projected $580,000 top price for a suite appeared to be on the high end, and thus applied a discount, projecting $463,710 for the most expensive suites.

The Nets at that point were projecting 170 suites.

Looking at the bright side

Maybe the price drop is a recognition that the product on the floor isn't guaranteed to be compelling. And maybe that's why the Nets, according to Crain's, are offering suite buyers the opportunity to fly with the team on its private jet.

No word yet on reversible jerseys, though.

But the Nets did have some possible good news to float: they're trying to sign the Ringling Bros. circus.

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