Friday, July 31, 2015

Hockey News: Islanders' deal in Brooklyn is unique, as arena guarantees annual sum; fan base shifting to Brooklyn (as with Nets)

The New York Islanders, from a business perspective, will not mirror the Brooklyn Nets, but they are reframing their fan base, as have the Nets, as the hockey team moves from Long Island. Not so many fans will move with them, but there are enough people in Brooklyn and New York City to pay new, higher ticket prices.

Essentially, the hockey team no longer administers or controls its own business operation, a highly unusual situation.
The agreement to move the franchise includes the provision that the arena pays Islanders ownership an annual sum to play at Barclays Center and, in exchange, Barclays Center acquired all ticket and suite sales, sponsorships, marketing and promotions and their revenue.
While Barclays Center (and Brooklyn Nets) CEO Brett Yormark confirmed that, the Islanders wouldn't comment. Nor would anyone confirm the sum, though last year the New York Post reported, using unnamed sources, that the guarantee was $50 million annually.

Reports Hackel:
“We did make a revenue guarantee – I’m not going to discuss what the number is – but the number, when we hit it, would only put us 20th in the NHL in revenue,” [Yormark] said.
If so, that number would be around $100 million, using Forbes’ most recent listing of the 30 NHL club revenues. After that number is reached, Barclays Center ceases sharing and keeps the surplus.
Glenn Gerstner, chairman of the Sports Marketing Department of St. John’s University in New York (and a longtime Islanders fan) told Hackel that Islanders owner Charles Wang has essentially outsourced his team’s business department, thus saving overhead.

Hackel suggests it's unclear how the arrangement will work for the team, especially since they can't raise ticket prices to pay for new players. (Current payroll is under $67 million.) Still, he notes that Forbes estimated the most recent team revenue figure at $83 million, with losses of $2.5 million, less than 2012 losses, according to the Times, of $8 million.

The $50 million is by no means the only team revenue. There's a TV deal worth an estimated $20 million a year, and rising, plus league revenues, perhaps $20 million a team, plus sponsorship and licensing fees. Thus, Hackel suggests, the $90 to $100 million annually would trump previous losses, as well as the previous $83 million, which counted overhead.

More expensive tickets, a new fan base

Reports Hackel:
Yormark says Islanders tickets at Barclays Center are roughly twice the price of a ticket at Nassau Coliseum, although the premium tickets include free food and other inducements.
That's a bit unclear, since the premium tickets are only a fraction of the total. About 25% of ticket sales "come from the established Long Island fan base, a larger percentage than he expected." (Maybe not a larger percentage than Islanders' fans expected?)

People from Brooklyn represent 33 percent of the total, with 21 percent from Manhattan. That's similar to the strategy with the Nets, which got a significant Brooklyn boost and fewer New Jersey fans than originally expected.

Indeed, unlike the family-friendly Nassau Coliseum schedule, with many games on weekends, the new schedule is oriented to weeknights--a corporate crowd, one expert tells Hackel--with four home games on Saturdays and three Sunday or holiday Monday matinees. 

That also cuts down on weekend traffic problems in Brooklyn but also kills some fan traditions.

The comments on Lighthouse Hockey's coverage included this message from a frustrated fan:
Abused By Barclay Already
I was a 25 yr Full Season Tix holder who got sucked into an 8 game package at Barclays. While I am not happy about it, I understand that I am paying $70 a game for the same seats that sell to full season tix holders for $55.HOWEVER, they never told me one of my 8 games would be an exhibition, excuse me, "preseason" game. That is BS!!! You can’t give those tickets away. I see them forcing the full season ticket guys into paying $55 for them but itSUCKS that they are ripping me off for $70. I see the legalese in my contract that says they may use a "preseason" games but I am not an attorney, I’m a Hockey Fan! But not a Barclays Fan! I am trying to get out of my contract, doubt they will let me, and I will never go again!!!!!. Already taking a lesson from Mr Dolan at MSG and abusing their most loyal fans…. I’m PISSED!!
by Dr Gary on Jul 20, 2015 | 12:29 PM 
Introducing the new home

The Times reported, 7/9/15, Islanders Still Touching Up Their New Home:
Water dripped from high above the ice on at least one row of the makeshift press area Wednesday, and the 10,000-square-foot space that will include the new locker room for the Islanders, who announced in October 2012 that they would begin playing in Brooklyn in the 2015-16 season, remains at least a month from completion.
Still, General Manager Garth Snow and Steve Rosebrook, the arena’s general manager, were beaming before the team’s rookie scrimmage as they led members of the news media on a tour of the still-under-construction rooms for the player lounges and fitness areas.
...Fans will need to carve out new routines. Saturday games — a Nassau Coliseum staple — will be nearly gone; the team has only four such contests next season, with two of them in early April, in the season’s closing weeks.
Most games will take place on weeknights, although there will be several Sunday afternoon games, including one against Edmonton on Super Bowl Sunday in February.
Then there are the quirks of Barclays Center, which features an off-center scoreboard, several hundred seats with obstructed views and the overall feel of a basketball arena.
...Barry Baum, Barclays Center’s chief communications officer, said 8,000 full-season Islanders ticket plans had been sold. On Thursday, tickets for all games go on sale to the public

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