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Report: Barclays Center not making nearly as much money as expected

Oct 21, 2013, 10:25 PM EDT

Philadelphia 76ers v Brooklyn Nets Getty Images

It’s a little tough to judge the financials of the Barclay Center on its own — buildings tend to have much higher expenses the first year (marketing is higher, for example) plus the real purpose of the arena is to anchor a full scale commercial and residential development around it. The Atlantic Yards is what can make the developers — which now includes Nets owner Mikhail Prokhorov — money in the long run.

Still, in the short run the arena is not doing as well as expected.

That’s the report from the Wall Street Journal, with Nets Daily providing some detail for us.

Eliot Brown of the Journal writes that the arena will produce about $26 million in operating income in its first year, 2/3rds of the $76 million projected … and less than what the arena has to pay out to its bondholders.

Forest City Enterprises which owns 55 percent of the arena operating company attributes the shortfall to the opening costs, “to make a big splash in the first year, investing heavily in marketing, customer service and securing top acts,” writes Brown. Indeed, the arena has been the nation’s top grossing venue for concerts and family shows through the first three quarters of year one … and second in the world.

This will have no impact on the Nets — they are the star tenant of that building and Prokhorov is showing he is willing to spend on them.

He gets the big picture, that he’s going to make his money on the real estate end of this deal once the residential/commercial area of the Atlantic Yards takes off. The Nets are part of what makes that area attractive. He can afford a few losses along the way to get it up and running.

  1. antistratfordian - Oct 21, 2013 at 11:53 PM

    Still… you have to wonder how they were off by $50 million, or twice the amount that they’re going to make.

    I remember Bruce Ratner saying this about a month ago: “Our parking lot is rarely full because the vast majority of people come by mass transit. The traffic and environmental impact has been less than we predicted, never mind what our opponents predicted.”

    Might be time to fill up that parking lot.

  2. MyTeamsAllStink - Oct 22, 2013 at 12:52 AM

    once they get the Islanders in the revenue will increase.

  3. 1972wasalongtimeago - Oct 22, 2013 at 7:03 AM

    This past weekend’s Pearl Jam shows at the Barclays Center were amazing. I know I spent some money there.

  4. dyn0myte - Oct 23, 2013 at 8:00 AM

    “…the arena will produce about $26 million in operating income in its first year, 2/3rds of the $76 million projected…”

    I realize math is hard, but if I’m not mistaken, 26 is closer to 1/3rd of 76.

  5. d4ovey - Oct 23, 2013 at 2:40 PM

    maybe because show/game tickets are entirely too expensive for working class people to purchase. And don’t even get me started on the eateries inside. It’s great that the Barclays brings more than your typical ” concert/arena” food choices, but $13 for a frank and a soda is ridiculous when you are attending an event as a family.

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