AY down the memory hole: recapping the Barclays Center naming rights saga

As Barclays Center prepares to celebrate its tenth anniversary, having opened 9/28/12, it's soliciting people to "Submit your favorite photos of you from an event at Barclays Center and you could be a part of a very special mosaic inside our arena."

Meanwhile, there will likely be a series of articles reflecting on that anniversary, and it's not unlikely some will contain myths and/or errors.

A book cites naming rights

On 9/12/22, Sports Business Journal tried to recap the Barclays Center naming rights saga, anticipating the arena's ten-year anniversary, in Closing Shot: Cashing In On A Cold Call, relying significantly on David J. Halberstam's book The Fundamentals of Sports Media and Sponsorship Sales: Developing New Accounts.

"It was the ultimate cold call," writes SBJ, transposing Halberstam's line about "Sports' richest real cold call."

It was 2006, and CEO Brett Yormark of the New Jersey Nets, eventually to be the Brooklyn Nets, needed a big player to pay for arena naming rights. 

He had his administrative assistant, Jeanette Neary, call her counterparts for some major CEOs and sought meetings for their bosses. And while Gerard LaRocca, then Barclays' chief administrative officer, thought the Nets wanted to sell a suite, he got a much bigger pitch, wrote Halberstam:

Theatrically, the two protagonists painted a long-term vision of a deeply embedded partnership, replete with omnipresent visibility and pervasive goodwill. They talked ‘partnership’ — two organizations working in lockstep to end the malaise in downtown Brooklyn and doing so just a short distance from the powerbrokers of Wall Street. They portrayed a larger-than-life opportunity, one with unprecedented depth and unequaled presence.”

Hmm, to "end the malaise in Downtown Brooklyn," which had just been rezoned?

Ultimately, Yormark and Chief Revenue Officer Neil Davis got a meeting in London with Barclays President Bob Diamond, an American who was aiming to have Barclays open branches in the United States.

On 12/20/06, Barclays cited a letter of intent for a naming rights deal, which was announced the next month. (The book but not the article makes the point that the signing was after the overall Atlantic Yards project got final approvals.)

Changes, and renegotiations

From the article:

The subsequent recession, the sale of the team by Bruce Ratner, and a change in architects would delay the start of construction until 2010 and force the renegotiation of deal terms. Still, the final agreement to name the arena Barclays Center was reported to be worth $200 million over 20 years when construction started.

That's a rather blinkered summary of a far more complex saga that does not get full treatment in the book, either. 

"The team signed a reported $400 million deal for 20 years of naming rights," wrote Halberstam, but, as I've written, "reported" does not mean actual. Rather, Barclays told the Wall Street Journal it would pay $300 million.

The book does break a little ground in quoting Davis as saying that developer Bruce Ratner's switch from starchitect Frank Gehry's arena to an off-the-shelf one from Ellerbe Becket "didn't sit well with the decision-makers," which meant the deal had "to be vastly renegotiated." 

Also, "Barclays itself was fighting the great recession," so it was less generous. 

Wrote Halberstam, "When all was said and done, Barclays maintained its commitment although the original $400 million deal was pared to a reported $200 million." 

Wait--it's not the same commitment if they're paying a (reported) half, though it was actually from $300 million to $200 million. And why does the author have to say "a reported $200 million" when he could check documents or ask his sources?

The ironies

As the book notes, Barclays never expanded its retail banking to the U.S., so "it doesn't have ATMs in the Barclays arena" but rather "uses the sponsorship for its wealth management services, philanthropic undertakings and online banking."

Unmentioned: this raises the question about whether they will continue the sponsorship, especially since $10 million a year is below market, and the arena operating company might want to pay Barclays for an early exit.

Another irony: Barclays' Diamond had resigned before the arena opened. (Unmentioned: for overseeing sketchy banking activities.)

Some other lapses

The book buys into the Yormark/Ratner narrative, saying they "had grand plans for decrepit downtown Brooklyn. They included housing, a shopping center, a park, a promenade, and a world class arena."

Well, not actually a park ("open space") or much of a promenade, and definitely not a shopping center but rather neighborhood retail.

The books notes that the team "was still working feverishly on a basket of approvals: politicians, variances, financing, environmental issues, community boards and more." 

Well, community boards had no role, other than to ventilate some local opinion, and a gubernatorially-controlled state process--run by the Empire State Development Corporation (now ESD)--took care of variances, since the state can override zoning, and the environmental review.