BSE Global CEO Zussman: Barclays Center should offer a "Brooklyn DNA-based experience." (OK, sure.) Says Tsais are "long-term builders."
A recent brief interview on the Bloomberg Businesweek Daily podcast featured BSE Global's CEO Sam Zussman. The summary:
BSE Global, the parent company of the NBA's Brooklyn Nets, the WNBA's New York Liberty, as well as their home arena, Barclays Center, has built a business model across sports, entertainment, hospitality and media. The company believes that its array of multiple businesses enables it to enjoy operational leverage and extract cross-functional synergies.
Sam Zussman, CEO of BSE Global, explains how Brooklyn's unique culture and history make it the ideal home base for the "experiential" powerhouse. Sam speaks with Tim Stenovec, Emily Graffeo and Randall Williams on Bloomberg Businessweek Daily.
They didn't explain cross-functional synergies, but perhaps we'll see that as, for example, the Planet Brooklyn festival emerges next month.
Event total
Zussman described the arena as "open roughly 190 nights a year." Is that accurate? Well, it's in the ballpark. Counting ticketed events only, not private events like graduations, the 2024 total was 176, in part thanks to a long New York Liberty playoffs run, and championship:
Given summer renovations last year, I noted nine more dates in July this year, which would've gotten them to 185, closer to 190. So if it's an exaggeration, it's minor, far less than the "285 days" promised in 2019 by short-lived CEO David Levy.
Gross, not net
Zussman noted, "We are the third highest-grossing arena in the world." That means they sell a lot of tickets to sports and other events. B
It does not, however, mean the arena is significantly profitable, though it's finally moving in that direction. Don't cry for them; the presence of the arena has vaulted the value of the Nets and the parent BSE Global.
Also, the arena gains all sorts of public assistance, including a tax-exempt site, tax-exempt financing, direct subsidies, eminent domain, and and override of zoning. So, I'll ask again: Why shouldn't BSE Global be required to pay for Ticketmaster Plaza?
The "Brooklyn Way"
At one point, Zussman sounded like he was reading from the overhyped prospectus for BSE Global's new media brand, Type.Set.Brooklyn.
"Our goal at Brooklyn Sports and Entertainment"--he used the original name--"is to create bold and unique experiences the Brooklyn way, meaning Brooklyn DNA, right? If you sort of think about what Brooklyn stands for globally, not just nationally, for creativity, for relentless hustle, for authenticity, for diversity, we represent about 150 different cultures."
"And so we want to make sure that when you come to an experience at Barclay Center, whether it's a concert or a game, you have a unique... Brooklyn DNA-based experience that might be different from the experience you would have with the same game played at a different arena or the same concert played at a different arena," he said.
"And we manifest that with food, with with service, with ancillary entertainment, with how the venue is and the fan experience," he said. "The audience experience is sort of first, and we manifest that." All this manifesting!
What exactly is that "Brooklyn way"? That's a little precious. What about the Qatar Airlines Club? Or Toki Row, named for a blended Japanese Whiskey?
Remember, "Brooklyn" is being used as a shorthand for authenticity, but that can go a little too far. What happens when you cross from Bushwick to Ridgewood?
Surely the poobahs at BSE Global headquarters in Industry City can walk in Sunset Park to Latino Fifth Avenue and Chinese Eighth Avenue look a little different from the refurbished warehouse buildings in the former Bush Terminal.
Long-term thinking
Though Zussman credited those who came before, he stressed "long-term thinking... I consider us and the ownership group to be long-term builders."
"Everything that we do is with with the long-term goal," he said. "We're focused on building generational fandom... the service that we provide, the training that we put in, the selection of vendors, the selection of entertainment, the selection of concerts."
That would differentiate owners Joe and Clara Wu Tsai--plus the 15%-owning Koch family, perhaps waiting in the wings--from developer Bruce Ratner, who bought the New Jersey Nets to leverage a real-estate deal, and Mikhail Prokhorov, the Russian oligarch who, it seems, bought the team and arena company to ultimately cash out.
Recent renovations
As NetsDaily noted, Zussman claimed the arena renovations, with more new premium spaces planned, will cost $150 million, not the previously stated $100 million. (He also said it would be $150 million over four years, though BSE has called it a five-year plan.)
One of his interviewers observed that venue operators have to renovate, but "you guys obviously got out ahead of that... there's a world where the Tsai family could have waited 20 years down the line."
"It is because we're long-term thinkers and it is because we're audience- and fan-focused," Zussman replied, explaining that they were converting suites into "bowl-facing clubs."
"The reason we did that was not the utilization," he said. (Well, we don't know their statistics.) "The reason we did that is that we noticed that the consumption pattern and the preference of the audience has shifted. People like less to run from their seats to buy something and run back and miss the game and so on."
Fair enough. They did their research. "We're not doing this because things are getting old, because we want to give things a facelift," he said. "We're doing this because we want to satisfy the patterns of what we hear people are wanting."
But that is because, in a way, "things are getting old." Old patterns change.
The Liberty and the WNBA
An interviewer noted that the WNBA's New York Liberty have been valued at $450 million, "at least by Sportico," and "Is it possible to get to $1 billion," as Clara Wu Tsai has said is their goal.
"I think it's not just possible. I think it's highly likely," Zussman said, pivoting to say that the "the race is to win another championship, to be a dynasty, to give fans a great experience, to have the best players, to to take care of our players."
"You also don't dictate the valuation," he said. "The valuation comes because you do all these things, right? But yes, I do think that it will happen." He noted that, in three years, the team averaged just 2,000 fans a game and now can sell out the Barclays Center.
(Attendance this year is averaging 16,104, after last year's 12,729, though the post-season averaged 15,046 and the WNBA finals 17,956, which exceeds stated arena capacity of 17,732. In 2023, attendance averaged 7,777, and in 2022, the average was 5,327, and in 2021 it was 1,757. So that's quite a trend.)
"All the key performance indicators"-- attendance, ticket prices, season ticket holders, sponsorships--"have gone up "tens of percentages a year," he said.
The question, perhaps, is how much that can keep increasing, and whether the league as a whole will gain bigger media deals and revenue-sharing.
Comments
Post a Comment