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April 6, 2009
Economic fallout shows up on Nets’ balance sheet
Sports Business Journal
by Daniel Kaplan
If the Nets are a leading economic indicator for pro sports, the future is not looking too bright.
In a sign that the recession has already eaten away at the bottom line in sports, revenue for the New Jersey Nets’ operating company dipped sharply in fiscal 2009, the last five months of which coincided with the economy’s contraction.
Many observers have suggested that because teams’ selling season for suites, season tickets and sponsorships finished before the economy cratered, sports would only begin to feel a bottom-line hurt as this year progressed. Revenue for Nets Sports & Entertainment, however, fell 8 percent in the 12-month period that ended Jan. 31.
The financial results mark the first public snapshot of a Big Four sports club since the economy unraveled. The results are broken out in the annual financial filing of Forest City Enterprises, which owns 23 percent of the team.
In addition, Forest City warns for the first time in the report that it risks losing existing sponsors of its planned new arena in Brooklyn, signaling that the long construction delays may spook some of the companies that have signed on and cause them to drop their deals.
“We feel very confident about all of our sponsorships,” said Brett Yormark, President and CEO, Nets Sports & Entertainment, in a prepared statement. “We have a higher level of sponsorship commitments for the Barclays Center, before groundbreaking, than any other arena in recent history.”
NoLandGrab: Yormark's statement sounds impressive, but we've no idea if it's remotely accurate.
Posted by eric at April 6, 2009 9:08 PM