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September 26, 2009
FCE issues 10-K Amendment: ticket sales way down; Forest City Ratner earns 5% development fee on arena; sponsors get suites
Atlantic Yards Report
Norman Oder catches Forest City trying to slide financial details past the press.
After 5 pm yesterday, and well past most journalistic deadlines, Forest City Enterprises filed an amendment to its Annual Report on Form 10-K--initially filed 3/30/09--for the fiscal year ended 1/31/09, concerning its subsidiary Nets Sports and Entertainment (NSE), and it has some very interesting information.
The consolidated financial statements, for the years ending June 30, 2009, 2008, and 2007, presumably had to be prepared for the sale of the majority interest of the team to Mikhail Prokhorov, but it's unclear to me why such information was not required to be made public any sooner.
Among the details in the report:
- the Nets earned $26 million in ticket sales last year, a huge drop--30% and 35%, respectively--from the unaudited figures of $37.4 million in 2008 and $40 million in 2007
- an affiliate of Forest City Enterprises/Ratner is earning a development fee not to exceed 5% of total project costs, and has already been paid $28 million
- certain arena sponsors have been given use of luxury suites as part of their license agreements, apparently as a sweetener
- if the Master Closing on the transaction--the sale of bonds, acquisition of certain property, and start of condemnation--does not occur by November 30, a $5 million initial loan payment is due then
- the company does not consider litigation a cause for concern
- costs of gone steadily up for arena land and related costs
- only at the very end is the deal with Prokhorov mentioned, as a "Subsequent Event"
Click on the link to see the relevant sections of this 10-K Amendment served up fresh.
Posted by steve at September 26, 2009 12:00 PM