Skip to main content

Featured Post

Atlantic Yards/Pacific Park graphic: what's built/what's coming + FAQ (pinned post)

Forbes: value of naming rights deals plunges when venues go dark. (Is Barclays paying right now?)

The Changing Landscape Of Stadium Naming Rights Deals, Forbes contributor Tim Newcomb wrote 7/17/20, suggesting that the value has dropped enormously for arenas like Barclays Center:
As venues largely remain empty now for months on end across the United States, [marketer Eric] Smallwood says NFL venues are the ones best set up to hold their value if games are still played this fall in what will be a heavily watched season on television, while arenas — many that host more than 250 events per year with NBA, NHL, concerts and family entertainment and over 2 million visitors— have little to no value. Baseball, of course, if the season is played as now planned, will drop the value of its deals by 50 percent by eliminating roughly half the home games and removing fans from the equation.
I'm not sure the value of the name of an arena at a major crossroads in Brooklyn goes to zero value, but surely the absence of public events is an enormous blow. The announced MTV Video Music Awards ceremony, to be held Aug. 30, is worth something.

The Barclays Center just announced a rescheduling of a Justin Bieber concert to July 20, 2021, which suggests confidence that venues in New York City will be then be able to host crowds, whether full or partial.

Also note that, in a vote of confidence regarding the return of live events, UBS just signed a naming rights deal for the Belmont arena, home to the New York Islanders, expected to open next year.

Suspended payments?

Do naming rights contracts allow sponsors to pause their payments when the arena goes dark? Most likely, according to Smallwood. 

So a truncated or suspended payment from Barclays would mean that Joe Tsai, whose owns the Barclays Center operating company, has even less cash flow to cover required bond payments.

Unlike some companies (like airlines) tied to the consumer economy, banks like Barclays should be relatively healthy.

What next for Brooklyn?

Writes Newcomb:
The next wave of naming rights deals will come with a heavy focus on contract language and always a touch of curiousity about the longevity of the business buying the rights.
What next for the Barclays Center? The deal expires as of 2032, though an anonymously sourced New York Post report suggests that Barclays might want to exit earlier.  

If so, yes, there will surely be some focus on contract language--perhaps also including the potential for protests at the arena plaza.