Arena company reports $18M in profits in second half of FY 2022; that won't pay construction debt. Sponsorship revenue seems down (give-backs?).
The Barclays Center operating company made an $18 million profit, of sorts, in the first six months of calendar year 2022, according to financial documents recently disclosed to bondholders. See screenshot at right.
But that result, coupled with a stagnant first half of the 2022 fiscal year, won't be enough to cover the arena's construction debt in FY 2022, which ended June 30.
So that means that owner Joe Tsai will have to dip into his pocketbook to cover the payments, as he has pledged.
Limited schedule
So even a busy season for the Brooklyn Nets, with high ticket prices, didn't make up for a slow schedule for other events, including concerts.
As I wrote in February, the arena company barely broke even in the first half of the fiscal year--see screenshot at left--but needs some $37.8 million for required PILOTs, or payments in lieu of taxes, of which $26.2 million goes toward debt service on arena construction bonds.
Most of the rest goes back to the arena company to be used on operations and maintenance (O&M)--but it still must be paid. Billionaire Tsai has committed to backstopping any losses.
Note that these statistics do not address the bottom line for the Brooklyn Nets, also owned by Tsai, who has a huge payroll but also new sponsorships and other revenue sources.And Tsai surely gets tax write-offs, whether or not the arena seems profitable, thanks to amortization and depreciation.
FY 2019 cash receipts
The New York Islanders played part of their season at the Barclays Center, and there was a busy schedule of other events., leading to $204.6 million in revenues. Still, the arena didn't make a profit that year.
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