Friday, October 26, 2012

Why will Islanders move to Brooklyn? Revenue from luxury suites and premium seats (& TV)

At a press conference two days ago regarding the New York Islanders's planned move in 2015 (or sooner) to Brooklyn, team owner Charles Wang stated that "our goal from the outset was to have the Islanders play in a local, world-class facility that possessed the amenities that our fans deserve. And I'm happy to announce that we've achieved that goal with today's announcement."

Translation: we need to make money from well-heeled fans (and, unmentioned, TV revenues, as Forbes's Tom Van Riper has noted).

It's the same reason the Nets moved from New Jersey. And it again raises questions about why public agencies didn't try to negotiate a better deal, especially when Forest City Ratner got concessions in 2009, while offering nothing in return.

$35 million more

The New York Times's Jeff Z. Klein last night explained one major reason why the Islanders would move from Nassau County to Brooklyn, even though they'd still be tenants: new revenues from those fans.

He wrote:
A. The short answer: $35 million in extra revenue per year. That goes a long way toward wiping out the club’s current operating deficit, estimated at $8 million per year.
The main benefit in this move “is not in the increased revenue the Isles will get from the average fan; it’s in the huge increase they’ll get from selling luxury suites and premium club seats,” said Tony Knopp, chief executive officer of Spotlight TMS, a company that manages corporate tickets at Barclays Center and other sites around the country.
The Coliseum, built in 1972 and barely renovated since, has 31 luxury suites and a relatively small number of high-priced premium seats. Knopp estimates that the suites generate about $3 million a year and the premium seats about $16 million.
Barclays Center, which is far more geographically convenient to corporate customers than the Coliseum, has 104 luxury suites. Knopp estimated that those suites would generate about $21 million for the Islanders, while premium seating would generate an additional $33 million. That comes to $54 million from suites and premium seats — $35 million more per year than what the Islanders generate at the Coliseum.

No comments:

Post a Comment