In discussing his hire of Sam Zussman to run BSE Global, Joe Tsai told Sportico he’s “confident” annual revenue generated by the Nets and Barclays Center could “get to $500 million over the next two or three years.”
It is a lofty goal — “audacious,” according to Jabari Young of Forbes — and despite all the various initiatives suggested to get there, the bottom line is that the Nets will have to win, keep contending. Without that, there’s basically no way to get there.
Charles Grantham, a sports management professor at Seton Hall University, suggested to Young that nothing beats winning in sports. “The key is: Do they win?” Grantham said. “I’m sure that’s what he’s counting on.”
Winning means a team can charge more for tickets and concessions in the regular season, can get a bigger chunk of game day revenues the deeper you go in post-season, command more dollars for sponsorship and endorsement deals and ultimately have a better hand when regional TV deals come up for renewal. It also give you a bit more leverage at the league level.
How can Tsai count on that with so much roster turmoil, including Shams Charania’s report that negotiations between Kyrie Irving are at an impasse? Without Irving, the Nets will not likely be seen as a competitor this coming season, depending on what they get back in a potential sign-and-trade. The mercurial Irving isn’t the only piece whose return is unsettled. The Nets have nine free agents at this point. Of course, they will still (likely) have Kevin Durant and Ben Simmons.
As Young and John WallStreet of Sportico note, the BSE Global revenue climb has been slow. Sportico wrote that the Nets will likely generate $343 million this fiscal year ending June 30. Forbes historical data shows that revenue dropped from $304 million in 2018-19 to $280 million in 2019-20 then $212 million in 2020-21, both of which were affected by the pandemic.
Tsai has said he’d like to see the Nets emulate the Warriors who pay out the most in luxury taxes — $170 million, well above the Nets $98 million — but also take in the most revenue with an estimated $589 million intake this fiscal year. Of course, they also win, win, win, going to the NBA Finals five times in eight years, winning it four times.
As Tsai’s counterpart in San Francisco said after the Warriors championship.
“We wouldn’t have spent that kind of money on the roster if we didn’t think we had a chance to win,” said Golden State governor Joe Lacob. “When you do think you have a chance to go far and compete for a championship, our belief is to do everything we can to use every last dollar. A lot of teams can’t do that, or won’t do that, I guess.”
So far, Tsai has gotten praise, both public and private, from basketball operations about his willingness to spend what’s needed. The Nets are second only to the Warriors in luxury tax payments since Tsai took over just before the 2019-20 season opener.
The Irving contract situation, if it escalates and he doesn’t return, would hurt the Nets in getting to those goals, particularly after their sweep at the hands of the Celtics in the first round. As Young wrote...
On the court, they’re a punchline after being swept in the first round of the playoffs despite being widely projected to go all the way. The new CEO, Sam Zussman, will need to repair the team’s image, fix an arena that’s good for little profit and navigate the Nets out of the joke mill. Tsai, who owns BSE Global, the sports company that operates the Nets, has decreed it.
Similarly, John Wallstreet of Sportico said there aren’t a lot of ways for the Nets to drum up more revenue locally if things so south on the court.
The organization certainly faces hurdles in attempting to add $150 million in revenue over the next two to three seasons. For starters, the team’s broadcast contract with YES runs for several more years. So, there is no imminent media-rights boost coming. And the club finished ’21-’22 third in the league in sponsorship and fourth in ticket sales revenue (behind only the Warriors, Knicks and Lakers). There doesn’t appear to be much low-hanging fruit left.
The Nets, like the other 29 teams in the NBA, will likely benefit from a huge jump in national TV revenue when those rights come up in three years and they will eventually reap part of whatever multi-billion dollar pot the league will demand for each of those expansion teams. Locally, the Nets could enjoy a windfall from arena naming rights. The $10 million Barclays pays the Nets annually is substandard at this point. The Nets were able to wring $30 million out of WeBull for just a jersey patch sponsorship.
Tsai has also spoken about other ways to enhance revenues, like in-arena technology, different events like e-sports at Barclays Center and of course gaming revenue, mostly in ad money. But the Nets winning gives him the best chance. It’s all about winning.
- Brooklyn Nets Owner Watches Warriors Win Title And Dreams Of Making $1 Billion - Jabari Young - Forbes
- Joe Tsai’s Billion-Dollar Revenue Plan for the Brooklyn Nets - John WallStreet - Yahoo! Sports/Sportico