The Village Voice-Russian billionaire Mikhail Prokhorov, who already owned 80 percent of the Brooklyn Nets and 45 percent of the Barclays Center where they play, completed his full set by buying the remaining shares of those two items from developer Bruce Ratner over the holidays. Prokhorov paid $75 million in cash and $210 million in promised future payments for the purchase; that’s way less than you’d expect based on the Ratner press release’s insistence that “the transaction values the team at approximately $875 million and the arena at $825 million,” but apparently he also took on a pile of debt in the deal.
The interesting part of the transaction, though, as uncovered by indefatigable Atlantic Yards Reportblogger Norman Oder, is that the financial documents released then show that the Barclays Center is apparently continuing to lose money:
The Barclays Center had a terrible year financially in the fiscal year ending June 2015. Net revenues plummeted, to less than half the total once projected, and the arena lost some $9 million in what was (roughly) its third year in operation… The arena’s net operating income (NOI) fell well behind expectations, to $38 million, due to declines in event and related revenues, while operating expenses remained high.
Surprising to almost no one in the area, Barclay’s Center can be described so far as a train wreck in Brooklyn. Not helped by the terrible performance of the Nets and the obstructed view seats for the Islanders, the site is continuing to burn money in Prokhorov’s pockets. Anyone with a brain would realize that building a huge spaceship-looking arena in the middle of Brooklyn would cost more money that it would make in the short run, but this deal is looking to be a bust for the future as well. More hockey games in Brooklyn due to the Islanders move has caused the arena to lose out on concert sales, and if ticket sales continue to be slow the arena will lose money on its NHL product for the year.
Although I like to laugh at Prokhorov’s misfortunes, its pretty sad to see a new arena and team to go up in NYC and have it be a complete disaster. The Nets are going nowhere with their KG and Paul Pierce trade from the Celtics, and the Islanders can’t get over the postseason hump a la the New York Knicks (most likely because KFC hopped on the bandwagon). I guess that it what happens when you combine greedy sports owners with mismanaged county and city officials.