Tuesday, October 01, 2013

Barclays Center CEO Yormark: arena was "overstaffed" (so jobs to be cut); more "big events" (with high prices) sought; Nets' tickets cost more after "sampling opportunity" because "we are a business"

Bloomberg TV yesterday published Barclays Center: Growing Pains and Lessons Learned
Sept. 30 (Bloomberg) -- Bloomberg’s Stephanie Ruhle takes you inside the business of the Barclays Center in Brooklyn, New York with Brett Yormark, CEO of the Barclays Center and Brooklyn Nets, as the arena celebrates its one-year anniversary. They speak on Bloomberg Television’s “Market Makers.”
"It's exceeded our expectations, to brand the Barclays Center and obviously to drive the economics," Yormark said. "I think we have had an incredible first year. We can certainly get better."



Cutting staff, less marketing

"We now know how the building behaves, we know how to staff it more efficiently," he said. "It takes 12 months to understand really the dynamics of the building. We are looking for anywhere between 15% and 20% worth of cost savings for next year."

How get those savings?

"Staffing is a big way we can do it," Yormark said. "Because we overstaffed, both on the full-time and part-time.... 80% of people are coming in from the front entrance. So to have staffing levels at the other entrances, we do not need that anymore. We can deploy that staff to the front entrance."

That also raises questions about how many of the widely touted 2000 jobs, some 1900 of them part-time, would be kept.

"We do not need to market as much," Yormark continued. "We built this great brand. When we launched a year ago, we spent considerable dollars branding the Barclays Center as a destination. We have now arrived and we do not need to spend those dollars any more.

Hockey: Brooklyn fan base

"When you can have two major franchises that can provide you close to 90 guaranteed dates a year, that is good for the balance sheet," Yormark said of adding the New York Islanders in 2015. "We think hockey's going to sell. If you just about tonight, the first preseason game of the year. We have sold over 13,000 seats. Over 24% are coming from Brooklyn. There is a built in hockey fan base here in Brooklyn. Our research validates that."

More events? No, more expensive

"You had 200 events last year," Yormark was asked. "Do you need to increase the number of events?"

"Not necessarily increase," he responded. "Our goal was volume and variety. Let's test a couple of things. As we look at Year Two, we look at certain things differently. One thing that we want to consistently do is have big events. When you think about the stars that came here this year"--he cited Paul McCartney, Jay-Z, the Rolling Stones, Barbra Streisand, Beyonce--"those are the ones that really matter."

Nets tickets

"We did raise our [Nets] ticket prices in Year Two," Yormark continued. "We did decide that, after giving everyone a sampling opportunity, we are a business and we had to raise tickets, and we did,"  "We are mindful of that increase, but we did raise tickets."

Consider his rhetorical shift. (“We have 2,000 seats priced at $15 and under," Yormark told RealGM 6/15/12. "It’s been our goal from Day One to have affordable seating and pricing for anyone that wants to experience Brooklyn Nets basketball."

Somehow he didn't use the term "sampling opportunity." Now prices are $25.

This past June, Yormark was told by an unskeptical interviewer, "You're putting some reasonably priced tickets out there."
"We made a commitment," Yormark responded easily. "Michael [sic] Prokhorov and his team, obviously wanting to do right by Brooklyn. So when we moved to Brooklyn, we put aside 2000 seats every night and we priced them at $15 and under. So that anyone in Brooklyn that wanted to root on the home team, Brooklyn Nets, had the wherewithal to do that. Now we've modestly increased that $15 price for next year, but for that inaugural season, which we just concluded, anyone that wanted to see the Brooklyn Nets, regardless of their economic situation, had the wherewithal to do so. And we were very happy about that that, because obviously, we're all about the fan, and we're about the community."

In closing

In the Bloomberg TV interview, Yormark said, in closing, "It is all about the customer engagement and making them feel really good about the experience here and them wanting to come back," he said in closing. "They have to be treated the right way. And our goal from Day One was to make sure that every fan was treated like a celebrity."

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