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

If annual naming rights to UBS Arena at Belmont cost $15M+, the $10M Barclays deal seems a bargain. Will it be reopened? (Would public get a slice?) What about transit hub?

"Projects change, markets change," in the infamously laconic November 2005 phrasing of then-Forest City Ratner executive Jim Stuckey.

So--I speculate--surely the operators of the Brooklyn arena, who inherited a naming rights agreement that had been renegotiated to $200 million over 20 years are wondering if they can open it up. (The initial deal was $300 million, which was hyped to "nearly" $400 million, a figure that persisted in the press.)

After all, $10 million a year until June 30, 2033 is, relatively speaking, chump change when a jersey patch goes for $8 million-plus, when the Chase Center in San Francisco (home of the Golden State Warriors), went for an "estimated" $15 million a year, and when the new USB Arena at Belmont Park was named for (reportedly) at least $15 million a year.

Sports Business Journal 7/22/20 cited "sources" in claiming the UBS deal, with the New York Islanders as anchor tenant, was worth $350 million--at least $17.5 million a year--and could grow, thanks to incentives. SportsProMedia 7/23/20 said the deal was "reportedly worth more than US$300 million over 20 years," or $15 million a year.

Those numbers are not definitive, but they make sense, given the increasing value of sports franchises.

And it's hard to think that a suburban arena, however spanking new and a good place to watch hockey and/or concerts, is more valuable than an arena in Brooklyn, especially given the cultural prominence of the NBA over the NHL and the prominent location of the Barclays Center, at a key Brooklyn crossroads.

Revisiting the deal?

As I wrote in July 2019, a New York Post article claimed that Barclays was "looking to end its contract early because it is no longer building a retail banking presence in the US, sources said," but NetsDaily said there wasn't an opt-out clause.

As of now, the star-laden Nets surely make the naming rights more valuable, and if Barclays does wish to maintain its prominence, here they'd stick with the deal. 

But we can speculate. Currently Barclays only offers online banking and CDs, plus credit cards, to retail customers in the United States. (An effort announced in 2017 to start a consumer loan business is apparently still in beta.)

Is attracting more customers to a high-yield savings account--as in the oculus advertisement shown in the photo--enough? Do the Barclays Wealth Unit and Barclays Capital corporate finance business gain from an arena naming rights?

I wonder. Maybe--hey, it's all negotiable--they'd take a payout to end their deal early. Surely it's worth a significant sum for Joe Tsai, whose company operates the arena and owns the Nets, to pay Barclays to leave, if a deeper pocketed sponsor is waiting.

Public entity, private benefit

Let's recall the question I posed at a July 2009 Q&A session: "Why will [original developer/arena operator] Forest City Ratner get to keep the naming rights revenues for what the ESDC claims will be a publicly-owned arena?"

“It’s part of the financing for the project,” responded Steve Matlin, a lawyer for Empire State Development Corporation (now Empire State Development), the state authority overseeing/shepherding the project.

While it certainly was counted on by the arena developer Forest City Ratner, it was never, as far as I know, suggested to be part of the benefits or part of the sources and uses for the project. 

And that raises the question: if the naming rights value, for example, doubles, why shouldn't the public get some of the upside? 

Yes, the arena has not been financially successful on its own, but the presence of the arena vaulted the value of the Brooklyn Nets enormously, so the combo was a huge success for Mikhail Prokhorov, who sold the team and arena operating company to Tsai. (Slate's Ben Mathis-Lilly raised this issue upon the sale.)

And now Tsai looks--thanks to new ways to monetize the arena/plaza, sports betting, a new TV payday, a new uniform patch, and surely more (the international market)--to some bigger paydays in the future.

A note on deal value

Note: the naming rights deal for the arena is $10 million--see excerpt below from 2016 bond prospectus.

However, a September 2019 presentation to arena bond investors suggested that Barclays would by then be paying $10 million to the arena company plus $2 million seemingly to the Brooklyn Nets, a previously unreported element. That hasn't been confirmed, or discussed, elsewhere.

A wild card?

One interesting aspect to a potential arena renaming: the prominence, in the last year, of the Barclays Center--um, Brooklyn arena--plaza--um, Resorts World Casino NYC Plaza--in Black Lives Matter and other protests. That was initially handled poorly by the arena, which now more adroitly tries to swap in gnomic quotes about social justice, even as some protesters sound far more radical.

From one angle, the presence of the arena in news coverage might unnerve a risk-averse sponsor. From another, it's just more eyeballs, and more prominence. (And, especially, if the naming rights were for a cause, not a corporation, as noted below.)

Changing the subway hub

As I wrote, if/when the arena gets renamed, that obviously would change signage around the building and presumably would cause a change in the name of the adjacent subway hub, which was renamed Atlantic Av-Barclays Ctr after Forest City --remember, the arena builder, and original operator--bought naming rights for 20 years, matching the Barclays deal term.

It would then make sense to take the Barclays Center name off, but the Metropolitan Transportation Authority might be newly wary of adding a short-term private sponsor. Presumably the MTA would add a fee for all the revised signage and maps.

It's also possible that, just as the name Atlantic Yards has persisted for many, the name "Barclays Center" or, perhaps "New Name (formerly Barclays Center)" would persist.

A new trend: a charitable phrase, not a name

Consider the possibility of a new trend. As Bisnow reported 4/12/21, Following Jeff Bezos' Lead, David Beckham's Inter Miami Names Stadium After A Cause, Not A Company
On Friday, the soccer club and car dealer AutoNation announced a three-year deal that will rename the Fort Lauderdale facility DRV PNK Stadium, after AutoNation's ongoing charity commitment to fight cancer.
The inspiration: Seattle’s Climate Pledge Arena, with naming rights bought by the fabulously wealthy Amazon, whose fabulously wealthy founder Jeff Bezos said, "I don't need any more branding. What I need is to go save the planet."

Note that Amazon won't even have its name on the arena, while DRV PNK is associated with AutoNation.

So presumably other such deals might mix civic-spiritedness and charitable branding associated with a company.

And in Brooklyn?

Could there be, as I mused last year, a Jackie Robinson Arena in Brooklyn sponsored by a company? It's not out of the question.

As I wrote, academic Amanda Boston, who studies gentrification and Black Brooklyn, had some critical comments, suggesting that policy was more important than symbols. "In his final years, Jackie Robinson rejected the use of his legacy as a veneer for the racial inequality that pervaded sports and U.S. society more broadly," she commented on Twitter. "Renaming the Barclays Center -- of all places -- after him would do just that."

"Honor Jackie Robinson by making it easier for Black, poor, and other marginalized folks to secure quality affordable housing in Brooklyn," she added. "Or maybe start by making baseball more accessible to low-income Black youth (hello?!)."

I don't disagree, but the question is whether having there's any room for an arena like the Barclays Center to take on more of a civic purpose or whether it would be inevitably co-opted. 

If Robinson's name were added in some way, it couldn't--could it?--simply serve as a veneer for corporate branding or recount a deceptively simple story of racial progress. It would have to not only describe his important symbolic role, but also the disillusion about American racism that he expressed.

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