Report: Barclays Center to Pay Isles Millions Per Year to Relocate to Brooklyn

Kevin Schultz

Usually when a sports team takes up residence in an arena, the team pays rent to either the company or municipality that owns the arena. It’s a typical landlord/lessee relationship, just on a much bigger scale than normal. Sometimes, teams even get a sweetheart deal on that rent money, as they leverage how badly the municipality wants to keep the team in the city by making not so veiled threats to move or not award Super Bowl hosting rights to the city (the NFL has used this tactic quite well over the years, especially with the ever-present threat of Los Angeles).

Yesterday’s Wall Street Journal has a report on the profitability of the Barclays Center, which is apparently not as profitable as its owners originally thought it would be, saying that it is “tens of millions of dollars” behind income estimates. But hidden at the end of the article is the first bit of information we have about the Islanders “iron-clad” 25-year lease with the Barclays Center, and it’s not the typical lease relationship that was described above (emphasis is mine).

The company hopes for a boost when the Islanders move to the arena. It also agreed in August to overhaul the Islanders’ current home, the Nassau Coliseum, which the company hopes will help generate more income.

But the Islanders also bring risks. The Barclays Center’s owners have guaranteed the Islanders an unspecified annual payment to move them there, according to a report from Standard & Poor’s, which issued ratings on the arena bonds and highlighted the deal as a risk factor.

People familiar with the deal said it runs in the tens of millions of dollars a year. Mr. Yormark described it as a “conservative” deal.

For comparison, the Islanders deal with Nassau County if the referendum had passed was to pay the County $14 million in rent plus 11.5% revenue sharing. Now, it looks as though the Islanders themselves were actually paid to move to Brooklyn. However, we don’t know the full picture. With the Barclays running everything from marketing to concessions and ticket sales, it is entirely possible that Barclays gets a very healthy cut of team revenue streams and is off-setting that by paying the Islanders a yearly stipend. But we don’t know.

After a decade of trying to get his own arena built in Nassau County, it was odd to see Charles Wang become a tenant in someone else’s building. The owner supposedly turned down offers from other municipalities to keep the Islanders in the metro area. Now we have a little bit clearer picture as to why that happened.




8 comments
Keri McCartney Kennedy
Keri McCartney Kennedy

I still say this Brooklyn Thing (Goodfellas) will not work out. They will either never leave or come back HOME.

Walter Fowler
Walter Fowler

Wang sells to Barclays group. Play in Brooklyn while Nassau redone. Spends big bucks and brings in players. We win Cup and Isles go back to new Arena in Nassau when building completed. Love It!

Michael Vincent
Michael Vincent

No excuse not to drop big money this off-season. Get Vanek on JT's wing and bring in a stud D-man. This team is a contender if a top 2 D-man, top RW and goalie are brought in. We are getting closer.

Lauren Louise
Lauren Louise

Since the Barclays group owns both arenas, expect them to play some games back in Nassau and I wouldn't be surprised by an eventual move back. That said, I think they will have much increased attendance in BK.

Joseph A. Nojunas
Joseph A. Nojunas

Good, and if Barclays profits still don't meet expectations after the Isles are playing there, Yormark may force them back to Nassau.

Scott Trinkwald
Scott Trinkwald

Sounds like a payment plan to me, yormark/Barclays buying the team.