Skip to main content

Featured Post

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

New document confirms Barclays Center's brutal pandemic: $24.6M loss in second half of 2020 (and it needed $18M in profit for PILOTs)

Documents made public last week by Brooklyn Events Center, which runs the Barclays Center, confirm that the pandemic-related closure has hammered arena finances.

For example, a semi-annual report of unaudited revenues and expenses for the second half of 2020--the first half of the FY 2021 fiscal year--shows a loss of some $24.6 million.

It's actually worse. The arena must reap some $36 million in annual profit just to cover required payments in lieu of taxes (PILOTs), which include construction bond payments. 

So that means $18 million is required for a half-year, leaving--by my estimate--the arena nearly $43 million in the hole just for the second half of 2020. Fortunately, multi-billionaire Joe Tsai, who owns the Brooklyn Nets, New York Liberty, and arena operating company, is backstopping expenses.

Cash receipts

The arena company also disclosed quarterly cash receipts for the fourth quarter of calendar year 2020, or Q2 of its fiscal year. The document indicated nearly $7.3 million in cash receipts, including nearly $6.6 million from suite and sponsor installmeants, and nearly $700,000 in ticket sales.

Note that in the third quarter of calendar year 2020, or Q1 of its fiscal year, the arena company earned nothing from ticket sales and $4.67 million in suite and sponsor installments, as I reported in December.

Both those numbers are well below the typical figures when the arena is open to audiences.

Note: it's unclear why that nearly $12 million in cash receipts over those two quarterly reports gets adjusted down to just $5.5 million in revenue in that semi-annual report.

Some cash receipts are likely not fully booked as quarterly revenue, since those paying will be allowed to realize the value over a longer period of time. As ratings agency Moody's reported last November, the arena "is giving a credit toward future seasons, but operating cash flow is still coming in."