After huge uptick in ticket sales, Barclays Center reports significant (but lesser) boost in net revenue, pointing to modest profits after years of losses.

In a sign that the event business has rebounded, the Barclays Center operating company earned nearly 80% more from ticket sales in Fiscal Year 2024 (ending June 30), than in FY 2023, which itself was a big improvement over FY 2022.

As shown in the screenshots below, based on reports to bondholders, ticket sales reached nearly $205 million, compared with nearly $114 million in FY 2023.

It's not clear how much this should be credited to a more robust concert/event schedule, boosted by the return to ticketing partner Ticketmaster (allied with promoter Live Nation), more fans attending New York Liberty games, rising ticket prices, or all of the above.

Suite and sponsors down

That said, suite and sponsor installments actually lapsed, to $21.6 million from $26.8 million.

That may be both the reason for, and the effect of, constructing two new clubs, The Key and The Row, to replace 30 suites. And that may drive more revenue next year.

Then again, if the Nets tank, they'll have trouble pushing ticket prices, at least against non-marquee opponents.

What about net income?

All told, increasing cash receipts does not necessarily translate into net income, which is revenue minus expenses.

The arena operating company reported $71.8 million in revenue in the second half of the fiscal year, which is far less than the $97.5 million in ticket sales over the same period.

After all, the venue only keeps part of the ticket sales.

Over the second half of the year, ArenaCo reported nearly $53.1 million in expenses. That translates into more than $18.7 million in net operating income. 

Previously, in the first half of the fiscal year, the arena company reported some very similar numbers: $71.5 million in net revenue and $52.2 million expenses,. That translates into $19.3 million in net operating income.

Big boost, modest profit

A total of $38 million in net operating income represents a significant $21.5 million increase over the $16.5 million in the previous fiscal year. 

We'll learn more when the audited financial results are reported.

It likely represents a modest profit, of a sorts. The $38 million won't quite cover the estimated $39.5 million in required payments in lieu of taxes (PILOTs).

But only $27.7 million of the PILOTs actually pays off construction bonds. The rest, more than $10 million, going back to the arena company to pay for operations and maintenance. So that's money BSE Global, parent of ArenaCo, wouldn't have to cough up. 

Losses, in perspective

Billionaire Joe Tsai, owner of the Brooklyn Nets and the arena operating company (with the Koch family as new minority shareholders) had to backstop previous losses. He may not have to any more, other to ensure the accounting works.

Of course the losses, in terms of net revenue, have been amplified by larger losses thanks to the ethereal concepts of depreciation and amortization, which surely help in terms of taxes. 

Also, any losses attributed to the arena company ultimately are offset by the huge rise in value of the team and, yes, the arena company itself, as shown by the Koch transaction.