Buried in Forest City Enterprises' quarterly financial report released Wednesday is word that the Barclays Center has reached a milestone in guaranteed income for arena operations. According to the report, "51 percent of forecast contractually obligated income for the arena is under contract. Contractually obligated income...includes revenue from naming rights, sponsorships, suite licenses, Nets minimum rent, and food concession agreements."
What that means is the Nets have signed guaranteed deals that will pay out half of what the franchise projected in long-term income...two years prior the first game in Brooklyn. Such contracts normally account for about three-quarters of an arena's operating income.
The team, through its Brooklyn Sports & Entertainment affiliate, has sold various sponsorships for Barclays Center at between $1 and $3 million a year. FCE's report also indicates the team is still losing money, but that's now Mikhail Prokhorov's responsibility. Prokhorov has agreed to eat up to $60 million in Nets' losses while they remain in New Jersey. He recently told Forbes Russia that he expects his investment in the team to produce a profit of $20 million a year once they move into the Barclays Center...and be worth $1 billion in 2015.
- Forest City Reports Fiscal 2010 Second-Quarter and Year-to-Date Result - P.R. Newswire
Barclays Center wants to host tennis events - Mark DeCambre - New York Post