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On podcast, Yormark spins Atlantic Yards, drops Islanders hint, evades an arena financial question

There are a couple of revealing moments in a 9/20/18 podcast interview on Bloomberg with Brett Yormark, CEO of the Brooklyn Nets and BSE Global, formerly Brooklyn Sports & Entertainment.

Beyond spinning the longstanding claim regarding the mixed-use development, Yormark hinted that the Islanders might play fewer games in Brooklyn in the next two years, and evaded a question about the arena's finances.

What was the Atlantic Yards impact?

At about 12:40 in the podcast, after Yormark points to the upcoming sixth-year anniversary of the Barclays Center, one host--I believe it was Scott Soshnick--said he was "living right in the shadow of the Barclays Center when it was going up. We were so excited about going to sporting events," but the landlord raised rent significantly "the moment it opened."

Yormark was unfazed. "The building has a been a bit of a catalyst for the renaissance of Brooklyn," he said.

"It's always sold that way," he was told, "but it's not always the result."

"That's correct," Yormark continued, still on message. "Y'know our goal was not just the venue, it was about job creation, it was about affordable housing, y'know, the mixed use development was the vision that Bruce Ratner had. it's probably taken a little longer for it all to come to fruition."

(A little? It was supposed be done by 2016, but now could take until 2035. That reminded me of an October 2008 quote from housing advocate Bertha Lewis. Atlantic Yards "is gonna be built,” she declared. “It may wind up taking six months more than originally stated.")

"But when go you down Flatbush today," Yormark said, "to that intersection with Atlantic Avenue, we've created a community, and one that we're very proud of." A community with 11 future building sites?

"It should be an economic engine for the downtown area," Yormark said. "Retailers experience growth like they've never had"--well, some--"housing, if you go down Flatbush Avenue, there's rigging everywhere." Well, that construction was in play well before Barclays, thanks to a rezoning.

"Just job creation generally speaking," he continued. "We have over 2,000 part-time jobs that we've been able to create at Barclays Center, as well as many full time jobs."

Um, how many full-time equivalent jobs? The official estimate was 1,240, but that's never been confirmed. And what about that promised quarterly reporting on the workforce (see screenshot)?

In 2015, workers facing a contract renewal protested that too few hours meant they couldn't quality for health insurance. (No update on the terms of the renewal has been announced, but there have not been protests.)

Making a difference

At about 16:20, after claiming, "In many respects, we are the new Dodgers," Yormark suggests the arena has "hopefully elevated the glamor and meaning of going to Brooklyn," spurring kids to think of performing on that stage.

Soon, he said, was "our second annual Barclays Center Cares gala, we support many charities in Downtown Brooklyn," Yormark said. "Our biggest mission is to make a difference." Well, Barclays Center Cards and the Brooklyn Nets Foundation did rebuild a playground at the Gowanus Houses, at a cost of $324,000.

About those Dodgers, who played in an era where team rosters were notably stable, the New York Times recently posted an article about the Nets, which began:
The N.B.A. is a business.
It is a concept tossed out by players around the league whenever the subjects of trade rumors or contract extensions come up. And for the Nets, a team that seems to be in perpetual transition, it is something of a mantra.
The pervasiveness of the phrase — which, roughly translated, means players have to distance themselves emotionally from off-court decisions — has rarely been as strong as it was on Monday, when the team held its annual media day in Brooklyn.
Going global

The recent rebranding of BSE Global is "working out just fine," Yormark said, with an easy transition to new Nets minority owner (and future majority owner) Joe Tsai.

"Our goal, starting with ownership, is to do business everywhere," Yormark said at about 18:49. "We've got a nice footprint here in New York metropolitan area, when you think of our venue business. Our goal is to expand beyond that. I think London is our next horizon, something we've been looking at for quite some time... an entertainment venue... small to mid-size."

"Our vision on the entertainment side is in many respects to create a progression ladder up to the Barclays Center, and to a lesser degree NYCB Live," he said. "In order to do that, we've had to diversify our portfolio. About two years ago, we acquired Webster Hall, with our partners AEG. We also have the Downtown Paramount in Brooklyn."

"And the goal is: how do you connect with artists early and often in their careers. Let them start at Webster, then go to Paramount, and make their way right up to Barclays. So, to the extend we can replicate that that progression ladder, in great markets around the world that are nurturing great talent, we'd like to do that. We think the UK's a natural next step for us."

He suggested the Nets have "a bit of a global presence," given the global brand of Brooklyn and the Nets black-and-white design. "When we were thinking about our color palette, we spent a lot of time, did focus groups, black and white resonates," he said.

Focus groups? I thought it was all created by Jay-Z.

What Barclays offers artists

At 26:45, Yormark was asked how the arena approaches musical acts that are considering a New York venue.

He noted that there was an untapped market, given that Madison Square Garden was already busy.
"MSG remains MSG, they're a legendary venue," he said. "Barclays has been very additive to the marketplace... The market's big enough for both."

"When you think about Brooklyn, there's a hip, cool factor" that Yormark said appeals to "that young artist." He also cited the arena's customer service.

And then he said what I suspect is the prime reason: "they make money in our building, which is also factor." That means either the arena's costs are lower than MSG, and/or Barclays Center operators set more generous terms.

Where the money is

At 28:58, Yormark was asked, "What do you make the most money on?" and he didn't quite answer.

"Y'know, our business is quite healthy, obviously the anchor tenant is the Brooklyn Nets, so I think most buildings would say their anchor tenants drive the most revenue," he said.

The Islanders' move

Is that, Soshnick asked, why it's better to have the Islanders play elsewhere, "because you can make more with the concerts, the family entertainment"?

"Well, the Islanders I think is a totally different scenario," Yormark responded. "When you look back at the whole Islanders move to Brooklyn, it's been met with mixed results."

That's an understatement. Yormark, um, might be blamed for alienating fans.

"We had hoped for more, I think the fans had hoped for more," he said. "At the end of the day, Long Island is the core marketplace, where their fan base resides."

"The fact that we've been able to move 20 games back there this year," he said, "and who knows how much that grows to over the next couple of years, was the right move." That phrasing suggests that even more games might be shifted to Nassau in the following two years. (Currently, 24 per year are planned, including pre-season.)

"It's great for the [Nassau Coliseum] building, it creates purpose for that building," Yormark said, in an indirect admission that the building operators will have a challenge if and when the Islanders move to the planned new Belmont arena.

"Big picture, that's where the fans are," he said. "I think the fans found it challenging to commute to Brooklyn, especially those weekday events."

Nets improving

At about 34 minutes in, Yormark says the Nets have an opportunity to improve, given that it's the "first time since 2013 when we control our first round draft pick." (That's the legacy of the disastrous gamble to acquire aging Boston Celtics stars.)

"When you think about the fans, they want to see a blueprint," he said. "We're in a position where we can sell that blueprint, that hope, that vision."

"By the way, fans are responding very favorably, revenue is up almost 20%, year over year, for us," he said.

I suspect he meant this year over last year because, given the significant drop in attendance in 2015-16, revenues could not have grown steadily.