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September 19, 2008
BARCLAYS PAID $400M FOR BROOKLYN ARENA NAMING, $250M FOR LEHMAN!
Room Eight
by Barry Popik
Did Barclays sign up for Brooklyn arena naming rights knowing it would be bottom-fishing for a U.S. brokerage operation?
In January 2007, Barclays paid $400 million (over 20 years) for the right to name the Brooklyn Nets arena at the Atlantic Yards the "Barclays Center." This week, Barclays paid just $250 million for Lehman Brothers' entire United States operation!
The big question here is: Was this always Barclays' plan, to take over an American investment house on the cheap?
The January 2007 announcement that the Brooklyn arena would be named the Barclays Center made no sense at the time, but makes perfect sense now. At the time, it was the most expensive naming of any sports arena ever. Barclays had no banks whatsoever in Brooklyn and a limited presence in New York City.
NoLandGrab: Had Barclays been as astute as Barry Popik suspects, it's unlikely they'd have had to write down billions of sub-prime mortgage losses of their own during the past year.
Nor is Barclays acquiring Lehman's "entire" U.S. operation for just $250 million. They're buying bits and pieces, and are paying an estimated $1.5 billion for Lehman's Manhattan headquarters building and two data centers. And as finance expert Gumby Fresh has pointed out, the Lehman purchase doesn't do much at all to help Barclays establish a retail presence in the U.S.
Still, it does appear to be a good deal for the British mega-bank.
Posted by eric at September 19, 2008 11:01 AM