It’s no surprise sporting venues would face a revenue crunch due to the pandemic halting live events. Financials released by Brooklyn’s Barclays Center Tuesday provide the first glimpse of how badly arenas have been hit.
Revenue for the first six months of the year fell almost $50 million overall, led by a ticket sales plunge of 99.9% compared to the first half of 2019. Arena ticket revenue fell from $29.3 million to a mere $28,700—about what the average Brooklynite pays to rent their apartment for a year.
Barclays, home to the NBA’s Nets and the NHL’s Islanders, spent $31.2 million – $2.1 million more than it took in as revenue – in the first six months of the year, according to the disclosures. That’s actually a smaller loss than it reported in the first half of 2019, when it had $76.7 million in revenue and $79.12 million expenses.
The Barclays Center is required to disclose some financial information as part of almost $500 million in outstanding bonds used to finance the arena’s construction. The venue, which opened in 2012, generates revenue from naming rights fees, luxury boxes, concessions, a small fee paid by the Islanders and 10% of Nets ticket sales, plus about $7 million in additional Nets payments. When the NBA suspended its season on March 12, Brooklyn still had nine regular season home games left on its schedule. Other live events that also provide revenue to the arena were halted as well.
The loss likely doesn’t mean too much for bondholders. Nets owner Joseph Tsai has pledged unconditionally to meet the arena’s debt service, the ratings agency Moody’s said in a 2019 downgrade of the arena’s debt. An audited disclosure last year showed more than $322 million in cash, escrowed funds and marketable securities that can support payment of the bonds, although those funds aren’t legally committed to support the bonds, according to a 2018 investor presentation.
While the Brooklyn arena faces massive losses in revenue, it’s not as troubled as the Nassau Coliseum, sitting one county over on Long Island. There, leaseholder Mikhail Prokhorov is threatening to walk away from the arena after having failed to pay more than six months of rent this year. County Executive Laura Curran recently postponed a written threat to declare Prokhorov in default of the lease until Aug. 7. In June, Curran stated the county was working with the Russian billionaire’s company on rent forbearance.