Weekly Digest: Consistent Attention Matters
Weekly Digest: Consistent Attention Matters
A consultant responsible for an untenable financial forecast for the Brooklyn arena is at it again. BSE Global makes some moves.
This digest offers a way for people to keep up with my Atlantic Yards/Pacific Park Report blog, as well as my other coverage in this newsletter and elsewhere.
One reason I keep writing about Atlantic Yards/Pacific Park is that the “story” never ends, and it has many different components.
Consider: this week I wrote mostly about the Barclays Center and adjacent issues. I’ve long kept track of the arena’s curious financial situation: the arena profits are way behind the numbers predicted.
That reminds us we should take promotional studies with a huge grain—er, pillar—of salt. Yet the presence of the arena, in the nation’s financial and media capital, has helped the Brooklyn Nets to rise stratospherically in value.
Has anyone checked to see if the consultant behind the arena’s gauzy predictions get it right? Rarely. But the evidence is out there.
From this newsletter: The Barclays Center's Unwise Financial Forecaster
June 11: Go-to consultant CSL in 2009 said the new Brooklyn arena would reap huge profits. Their own report refuted that. A study of a proposed Philadelphia arena awaits.
The graphic below mashes up part of CSL’s 2009 forecast of revenues, expenses, and net income in Brooklyn, with part of its 2016 report on the Barclays Center’s financial performance.
I’ve outlined comparable line items in the same color. While the arena’s gross revenues, in the first two full years, did exceed predictions by a relatively modest amount, expenses were nearly triple that predicted.
So net income—or net revenue—was well below predictions, in one year essentially half. That left limited profits, after paying off construction bonds and, in the first year, a loss.
As sports economist Brad Humphreys tweeted in response, “Deep dive on the finances of the Barclays Center. Worth a read. tldr: Consultant's rosy forecasts of future profits were wildly overstated. Stop me if you've heard this before ...”
From Atlantic Yards/Pacific Park Report
June 12: As the Barclays Center now promotes the WNBA's New York Liberty, synergy next door with Glowbar serving as Liberty's "Official Facial Studio."
Remember, that side wall and loading dock entrances were not, in the arena’s early years, considered a canvas for promotion. But billionaire Joe Tsai, who owns BSE Global (holding company for the arena and other properties) has tried to maximize available promotional space.
June 13: At BSE Global, Shorenstein's a well-wired Chief External Affairs Officer. Also, she was appointed by Gov. Hochul to the NYS Gaming Commission.
That can't hurt, especially with the expected growth of sports gambling.
June 14: BSE Global news: Barclays (with no retail branches) becomes the New York Liberty's official banking partner; new VP of Communications named.
June 15: Union Square Travel Agency, a legal cannabis business (headed by a former state official overseeing Atlantic Yards), opens in Downtown Brooklyn, near Jay-Z's old stash spot and the arena. It all comes around.