Reports from Barclays Center operator suggest major rebound in ticket sales, which could (finally) lead to a modestly profitable year. Credit switch to Ticketmaster?

After several very lean years, the Barclays Center appears to be on a track for a modestly profitable fiscal year, thanks to a significant increase in ticket sales, surely for concerts and other events.

That could obviate the need for billionaire Joe Tsai, who owns the arena operating company, to keep putting money in to backstop the operation.

The arena has been struggling. As I reported in October, the arena company in Fiscal Year 2023, which ended June 30, reported $16.1 million in net operating income (NOI), or revenue over expenses.

It had to put up $21.1 million to pay off construction debt, leading to a loss of $5.1 million, as I've re-interpreted, and simplified, the calculations. (On paper, thanks to factors including depreciation and amortization, ArenaCo lost far more money.) 

Tsai put up $18 million to bolster the arena's finances, less than the $38 million he contributed in FY 2022 and the $52 million he contributed in the COVID-challenged previous fiscal year.

First half FY 2024 results

According to fiscal reports distributed to bondholders, ArenaCo took in $71.5 million in the first half of FY 2024, with expenses of $52.2 million.

That means--roughly--$19.3 million in net operating income. If results remain consistent, that translates to $38.6 million over the full fiscal year. 

That should be enough to cover net debt service for FY 2024, once estimated at $27.7 million. 

That would not, however, cover the full PILOTs (payments in lieu of taxes) required of the operating company, which could reach $39.5 million. 

Then again, since the remainder of the PILOTs not needed for debt service gets returned to help pay arena expenses, they're essentially paying themselves.

Ticket sales up

Also, the arena seems to experiencing a consistent stream of cash from ticket sales, which have rebounded from the FY 2023.

Is that a result of the arena's (contested) return to Ticketmaster, which then led to more shows being booked by Ticketmaster corporate partner Live Nation?

Is it a result of the live event business rebounding after COVID has receded?

Or maybe both, plus, perhaps, a boost in sales for the New York Liberty, which increased attendance over 18 home games by 46% (averaging 7,777, after 5,327 in 2022), then made it to the WNBA finals.

Quarterly comparisons

Well, in the first quarter of FY 2024, from July through September 2023, the arena reported $51 million in ticket sales and $4.8 million in suite and sponsor installments.

For the second quarter of FY 2024, the figures were $56.2 million and $4.2 million, respectively.

For the third quarter of FY 2024, the figures were  $47.5 million and $10.6 million, respectively.

Compared with FY 2023, ticket sales are way up, an 83% increase. After three quarters this year, the total is $154.7 million.

After three quarters last year, the total was $84.5 million.

Keep in mind that cash receipts from ticket sales do not translate directly into profits, given the costs of running the venue and compensating the performers. (Also consider Ticketmaster's cut, and the Justice Department's targeting of an alleged monopoly.)

So net operating income is a better metric.

Suite and sponsor installments down

Compared with FY 2023, the figures for suite and sponsor installments do not show a dramatic improvement but rather a retreat of more than 13%. (That could change after Q4.)

After three quarters this year, the total is $19.6 million. After three quarters last year, the total was $22.2 million.