Barclays Center again reports modestly profitable year (putting aside paper loss), though with downtick from FY 2024. Capital contribution down from $51M to $15M.

The Barclays Center in fiscal year 2025 had another modestly successful year, for the second year delivering a moderate profit: $11.5 million, at least by my alternative calculation, though the arena operating company still declares significant--if dubious--losses for tax purposes.

Last year, as I wrote, the figure was $15.5 million. Both numbers significantly lag the original projections offered to bond buyers.

As shown in the annotated screenshot below, from a report to bond buyers, Brooklyn Events Center, the name of the operating company, had about $146 million in revenues and $114.4 million in operating expenses. Both were slightly up from FY 2024, though with a larger increase in expenses.

Net operating income (NOI) was $31.6 million, an 11.7% decrease from last year's $35.8 million, but far more than the $16.1 million in FY 2023. Still, that's way below the original NOI estimates, which started at $70 million and were downgraded to $55 million, but were never met. 

Still, the arena's part of a financial success, since the availability of a Brooklyn venue, in the world's media capital, has allowed the value of the Brooklyn Nets (and the arena company) to soar.

The 2024 Koch family minority share investment valued BSE Global at a reported $5.8 billion, after Joe Tsai, in 2019, completed a purchase--without the later-acquired and increasingly valuable New York Liberty--valued between $3 billion and $3.3 billion. 

Paper losses

As noted in my previous coverage, keep in mind that the Brooklyn Events Center fiscal reports present the arena awash in red ink, albeit less so this year: a net loss of $44.8 million, versus $34 million in FY 2024 and. $76 million in FY 2023.

That's thanks to calculations of depreciation (how much of a tangible asset's value has been used up) and amortization (similar to depreciation, but for intangible assets like Goodwill), thus ensuring accounting losses and tax benefits. 

Drilling down 

Interestingly, while the arena company saw upticks in revenue for the three largest categories--sponsorship and suites; events and other income; ticketing, facility, and related fees--it saw a 19.2% decline in concession revenues. It's unclear why.

Those total revenues of $146 million are a notch above FY 2024's $144.4 million, a significant jump from $99.1 million in FY 2023, which as I wrote was surely attributable to a busier concert schedule achieved by the return to the vendor Ticketmaster, allied with the booking company Live Nation. 

What about the Liberty?

Does an increase in attendance for the New York Liberty, which won a WNBA championship in 2024, have a significant impact on the arena's bottom line?

Maybe not, though given significant (though now incomplete) overlap between the owners of the arena (BSE Global) and the Liberty, which last year sold a minority stake, the owners get the boost through their Liberty ownership.

A license agreement requires the Liberty to pay the arena company $77,250 per game in 2024, $78,750 in 2025, $80,500 in 2026, $82,000 in 2027, and $83,750 in 2028, plus "other reimbursable game day expenses." The arena company recorded $6,969,224 of revenue from the Liberty in FY 2025, a small increase from $6,645,704 in FY 2024.

What about PILOTs?

Instead of paying taxes on a tax-exempt site, the arena redirects Payments in Lieu of Taxes, or PILOTs, to, in part, pay off tax-exempt construction bonds. (Note the double bonus: tax-exempt site plus lower-cost financing.)

Those PILOTs are composed of three components: principal repayment, interest expense, and operations & maintenance (O&M) funds.

In other words, while the arena company made $40.1 million in PILOT payments in FY 2025, that included $6.9 million in principal repayment and $21.5 million in interest. The remainder is O&M funds, which go back to the arena company.

Though the FY 2025 $40.13 million in PILOTs does exceed the Net Operating Income of $31.6 million, that doesn't mean a loss. 

 

From the PILOTs, the $11.7 million for O&M funds, which can be used by the arena operating company to reduce any costs that were previously out of pocket, but otherwise simply go back to the company.

 

Note that principal repayment is not attributed in the annual operating numbers excerpted in the above chart, so I've omitted it when calculating other expenses.

 

Capital contributions

 

Last year, I noted that, for the first time in his ownership, billionaire Tsai did not need to supply capital or draw on a reserve fund to bolster operating finances.

Still, subsequent to the June 30, 2024 end of the fiscal year, "a parent company" supplied $51 million "to fund ongoing capital projects at the Arena and support the Company’s operations," according to the report.

It's likely a large portion of that BSE Global expense went to convert 30 suites (of 87) for club-like spaces called The Row and The Key, accommodating a total of 436 seats.

The $51 million is cited in the chart below, from the FY 2025 report. Almost all of it, $49,3 million, apparently, was invested in the arena.

In the 2024 report, the commensurate figures were a $17.4 million investment in the arena, not $49.3 million, with no contribution from Member.

 

The new report cites an additional $15 million, allotted after the end of the fiscal year, to fund "ongoing capital projects at the Arena and support the Company’s operations." Apparently renovations--or at least payments for them--continue.