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When Barclays Center came clean: FY 2016 financial document, unlike 2015 version, cited Islanders opt-out

Something very interesting becomes clear when comparing the annual financial reports for the Barclays Center operating company covering fiscal years 2015 and 2016, which end June 30. (The documents were each released about six months later.)

Passages regarding the New York Islanders stand out, because only in the 2016 document--which appeared, of course, after talk of the Islanders leaving the arena surfaced--was the team's opt-out clause mentioned. That's not very transparent.

2015 document excerpted at left; 2016 document excerpted at right; arrows indicate added text re opt-out. Click to enlarge.
From the 2015 document
Agreement with the Islanders
Brooklyn Arena, LLC and Subsidiaries Notes to Consolidated Financial Statements
On October 24, 2012, the Company entered into a licensing agreement with the Islanders whereby the Islanders have certain and exclusive rights regarding the use of the Arena and the Arena is entitled to certain revenues. The term of the agreement is for 25 NHL seasons commencing on the first home date during the initial season, which is expected to be the 2015/2016 season. The licensing agreement requires the Islanders to pay an annual license fee of and provide for an operating expense reimbursement to the Arena subject to a per game cap. The Arena is required to pay Islanders an annual guaranteed season payment net of direct sales and management costs, which is subject to certain adjustments as defined in the agreement. The annual season payment is subject to annual increases of 1.5% each season over the term.
No amounts have been paid under this agreement for the year ended June 30, 2015.
(Emphases added)

From the 2016 document
Agreement with the Islanders
On October 24, 2012, the Company entered into a licensing agreement with the Islanders whereby the Islanders have certain and exclusive rights regarding the use of the Arena and the Arena is entitled to certain revenues. The term of the agreement is for 25 NHL seasons commencing on the first home date during the initial season, which was in September 2015. However, both the Company and the Islanders have the right, following the conclusion of the 2016‐2017 NHL season, to initiate good faith discussions regarding modification of the financial arrangements within the NYI License Agreement, with such discussion period expiring as of January 1, 2018. If the parties are unable to reach an agreement, resulting in an Opt‐Out Notice, either party may elect to terminate the license agreement effective as of the conclusion of the 2018‐2019 NHL season; provided, however, that, in the event that an Opt‐Out Notice is delivered, the Islanders shall also have the right to terminate the NYI License Agreement effective as of the conclusion of the 2017‐2018 NHL season. The licensing agreement requires the Islanders to pay an annual license fee and provide for an operating expense reimbursement to the Arena subject to a per game cap. The Arena is required to pay the Islanders an annual guaranteed season payment net of direct sales and management costs, which is subject to certain adjustments as defined in the agreement. The annual season payment is subject to annual increase of 1.5% each season over the term. For the year ended June 30, 2016, total payments to the Islanders were approximately $37,519,000.
By the way, that little-noticed $37.5 million figure--far lower than the much reported (and purported) $53.5 million baseline guarantee--was first reported by Newsday in a 1/30/17 article about the Islanders' possible return to the Nassau Coliseum. I'll address that issue in another post.

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