Wednesday, January 11, 2012

How many Nets fans from NJ will cross the river (and bring new tax revenues)? "You’re not going to have a lot of people from New Jersey following us," CEO Yormark acknowledged in 2009

Despite claims from fellow boosters of the Nets' move to Brooklyn, team CEO Brett Yormark, in a moment of candor, more than two years ago acknowledged that relatively few Nets fans from New Jersey would make the move to Brooklyn.

That won't necessarily affect the bottom line of the team and arena, since new fans from New York surely will buy seats and suites.

But it does diminish the argument for city and state arena subsidies, which were based in part on expectations of new tax benefits to the city and state from out-of-state visitors.

In other words, poaching a team may not be worth what it's cracked up to be.

How many current fans will go to Brooklyn?

Analysts of the team's move have assumed that about half of those attending Nets games at the team's previous home at the Meadowlands would attend games in Brooklyn, thus representing new activity in the local city economy.

However, the fuzziest piece of that cohort involves estimating how many current fans from New Jersey--as opposed to those from New York--would make the trip. And that estimate is suspect.

Sports economist Andrew Zimbalist, in his June 2005 report for Forest City Ratner, Estimated Fiscal Impact of the Atlantic Yards Project on the New York City and New York State Treasuries, asserted that 30 percent of New Jersey fans of the Nets will also attend games in Brooklyn.

In a 2/26/09 article, I explained why Zimbalist's figure was questionable. Among the reasons: arena attendance figures were likely overstated and the long goodbye may have soured a larger percentage of the fan base.
    The implication? More New York-based fans would be needed to fill the new Brooklyn arena, thus driving down local tax revenues.

    The evidence from suite sales

    On 11/4/11, the Bergen Record's John Brennan, in New Jersey left behind when Nets move to Brooklyn?, suggested that preliminary numbers from suite sales at the Barclays Center pointed to a lack of interest from New Jerseyans.

    Brennan recalled how Bruce Ratner, then the team's principal owner, said "he thought he could retain a good portion of the New Jersey Nets fans once they move to Brooklyn."

    However, only 36% of suite sales so far come from outside Brooklyn and Manhattan, including those from other boroughs, Connecticut, and Philadelphia, as well as New Jersey. No statistic for New Jersey alone has been announced.

    Now suite sales are not necessarily a complete proxy; after all, there are many more suites to begin with. The interim move to Newark surely has reconfigured the fan base somewhat, with a larger percentage of New Jersey fans living closer to New York City and more habituated to use public transit.

    And the Nets, Brennan noted, can always draw New Jersey fans on weekends, and recruit new fans in New York.

    So it's not their worry. But it should be on the minds of New York City and New York State officials.

    Yormark's pessimism about New Jersey

    In a 4/16/09 session at the Argyle Executive Forum, before the Atlantic Yards eminent domain case had been resolved and the Nets had announced an interim move to Newark, Yormark took a question about whether season ticket holders would be expected to follow the team.

    His response:
    I think the reality of the situation is you’re not going to have a lot of people from New Jersey following us just because even though it’s twelve miles from the IZOD Center, it’s a very challenging trip. I mean it could take you twenty minutes or two hours. But I do think those old time season ticket holders will buy partial plans. Maybe it’s a weekend plan because hopefully we’ve given them enough reason to follow us. Obviously the people in the five boroughs on this side of the river –I mean our trading area of influence is massive. I mean we have ten subway lines and the Long Island Railroad converging at the foot of our new building, the Barkley [sic] Center in Brooklyn. So we can market those season tickets to a lot of people.
    So hopefully that answers your question but we’re doing everything we can to get the folks from Jersey to follow us. If they do, great and if they don’t, that’s okay.
    Yormark didn't put a number on it, but I'd bet that "not... a lot" is somewhat less than 30 percent.

    What a booster says

    Yormark's remarks also contrast with one of the team's most unswerving fans, the pseudonymous Net Income (aka Robert Windrem), chief editor of Nets Daily, who wrote 5/14/11:
    A lot has been made in some circles about the Nets' move to Brooklyn being a dramatic shift, geographically, for the franchise, but the reality is different.  The team will cross two rivers, the Hudson and the East, the former a state boundary, but the move is similar to, and often a lot less dramatic than, a number of others made during the 28 years the Nets spent in the Meadowlands.
    His examples: moves made in the regions of Los Angeles, Cleveland. Detroit, and Baltimore/Washington. He has similarly made that contention in comments like this and this.

    Yormark, who presumably has access to better survey data, apparently disagrees.

    Somewhat similarly, another Nets official commented 1/8/12 on the travel distance between the interimthome in Newark and the new home in Brooklyn:
    “It’s about 10 or 15 miles, but it can take about an hour driving,” Nets general manager Billy King said.
    Now, public transportation would make it easier for New Jersey fans who, for example, work in Manhattan and would have a one-seat ride to Brooklyn. But it would be a two-seat ride home to New Jersey, via a bus or train, and thus less attractive.

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