April 11, 2006
Nets' Chances Look Good; Books Don't
The NY Times
The NY Times
By Richard Sandomir
Despite an 11.2% increase in attendance, four modest sellouts, doubled sponsorship revenues and the (47-29) Nets' recent 14-game winning streak:
Still, none of this has made the Nets a financially solid team. They are solid only if you assume that Brooklyn will make them so. If the Nets ever make a profit, it will be in the arena that is the centerpiece of the enormous Atlantic Yards development, which has met with community opposition for, among other things, overpowering the scale of the neighborhood.
The article continues on by outlining the Nets losses:
In the fiscal year that ended Jan. 31, the Nets generated an operating loss of $8.3 million for Forest City Enterprises, which owns a 21 percent stake in the Nets on behalf of its subsidiary, Forest City Ratner. But because Forest City is responsible for 31 percent of the team's losses, the $8.3 million loss computes to $26.8 million when spread out to the Nets' 100-plus investors. The filing was reported in this week's issue of the Sports Business Journal.
Forest City also reported a $16.3 million loss from amortization and insurance policies required by the N.B.A.
Those losses followed a year in which losses totaled $10.9 million for the nearly six months between Ratner's taking control of the Nets in August 2004 and the end of January 2005, a period that included less than half a season. The report did not specify how much of the loss was from team operations. (Forest City Ratner is a development partner for the office tower being built for The New York Times Company.)
Also, Sandomir reports this tidbit (emphasis added):
Ratner has so far been unsuccessful since last May in finding new equity partners to provide at least $60 million. A team spokesman, Barry Baum, acknowledged the team was seeking equity.
NoLandGrab: The lead of the story sites the Nets arena proposal in "downtown Brooklyn" apparently the sports guys didn't get the style memo on the project and now we're going to have to sic Stormin' Norman Oder on them.
The article portrays a team that is desperate to get out of the Meadowlands. If this is the case, why are the stewards of NYC so eager to provide large cash incentives for Ratner to build an arena at one of the most congested intersections in Brooklyn. They should be using their position as leverage to improve the deal for all New Yorkers. Or is that not the Bloomberg-Doctoroff doctrine?
Posted by lumi at April 11, 2006 11:57 AM