Friday, March 04, 2011

Media meme #1: why is the Barclays Center naming rights deal reported as "nearly $400 million"?

How exactly are sports reporters still reporting that the Barclays Center naming rights deal resembles the $400 million deal announced in January 2007?

Consider the cliche-ridden USA Today article headlined New Jersey Nets go global to help domestic image. (No, it's not about EB-5.)

The article begins:
New Jersey Nets CEO Brett Yormark looked at Brooklyn and saw the world, a melting pot of humanity.

He also saw a world of opportunity for the Nets as the franchise planned its move to Brooklyn starting with the 2012-13 season.

Yormark began an aggressive pursuit of international brands the Nets could partner with, scoring a lucrative 20-year naming-rights deal worth nearly $400 million for the Brooklyn arena with Barclays, the London-based banking and financial services giant.
How does the reporter know the value of the naming rights deal?

Because the $400 million figure was promoted relentlessly by the Nets and Forest City Ratner, and repeated dutifully by journalistic outlets like the New York Times.

What about the cut?

The cut in the agreement, to $200 million and unspecified "certain fees," got covered in a few media outlets. The Times barely covered the story; it referred to "an additional sum" and later reported the Nets claimed "that the bank’s total annual payments, including fees for other rights, remain unchanged."

No evidence was cited. The available evidence, as noted at bottom, suggests otherwise.

Repeating $400 million

A March 2 "Nets News" article from the in-house promotional team, NETS Present Barclays Center & Brooklyn Plan to Barclays Staff, didn't put a number on the naming rights.

Nets Daily blogger Net Income (aka "the Leni Riefenstahl of the New Jersey Nets") reported that "Barclays... agreed to a $400 million naming rights deal in 2007," but neglected to point to the current value of the deal.

Too many lazy sports reporters rely on Leni.

The official document

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.

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