The Brooklyn Nets are pairing their newfound fame with a string of lucrative sponsorship deals that could lead to the Barclays Center renaming, The Post has learned.
The NBA team, owned by internet billionaire Joe Tsai, is aggressively seeking new sponsors at a time when his successes have positioned him to lead a good business and add millions of dollars to the team’s bottom line, according to sources.
The Nets have actively courted new sponsors for the patches placed on player jerseys – a branding opportunity now paid for by cellphone maker Motorola. According to a source familiar with the situation, the Nets are also looking for a new corporate sponsor for the main entrance to the arena, which is currently named after insurance giant GEICO.
Sources say they expect the team to rack up as much as $ 13million a year for uniform fees alone – or more than what UK bank Barclays currently pays annually for naming rights from the team’s 17,732-seat arena, the Barclays Center.
And that’s just one of the reasons industry sources expect the Nets to be looking for a new corporate sponsor soon to replace Barclays.
This is not just empty speculation. When Tsai bought a controlling stake in the Nets and Barclays Center in 2019 for a combined $ 3.5 billion, it was sold in part on the idea that he could increase the value of the naming rights of the arena d ‘by 2022, thanks to a contractual clause allowing the parties to separate. means after 10 years, according to sources.
Barclays currently has the right to pay $ 10 million a year for the stadium’s naming rights until 2032. And while that may sound like a good deal for the multi-purpose stadium, which recently hosted the private memorial service for the late rap icon DMX, the Barclays original The reason for sponsorship of the stadium was swept away by the 2008 financial crisis.
The bank agreed to put its name on the scene in 2007, when then-CEO John Varley planned a major expansion of its retail operations in the United States.
The financial crisis forced the ailing British bank to withdraw from its American ambitions. Barclays still has a credit card business in the United States, but no physical bank.
The Nets also have reasons to withdraw. By the time the arena was finally erected in 2012, the team had reluctantly agreed to halve Barclays’ annual sponsorship fees to $ 10 million from the $ 20 million initially agreed.
Now, according to branding experts, the NBA franchise could easily earn between $ 15 million and $ 20 million for arena naming rights, especially if the team continues on its current trajectory.
When Tsai bought the Nets from Russian billionaire Mikhail Prokhorov in 2019, the team were one of the worst teams in the NBA. Now his trio of star players – Kevin Durant, Kyrie Irving and James Harden – have made the Nets one of the most watched teams in the league.
The team’s star power was made clear last week when pictorial versions of the trio made the cover of The New Yorker.
The location of the stadium in Brooklyn will also help it attract more money, experts said.
“Brooklyn and the Barclays Center are at the epicenter of sports, entertainment, media and culture,” said Woody Thompson, executive vice president of Octagon, which advises major brands and clients on business opportunities. sponsorship, including site naming rights.
“There is an opportunity here to be in a part of town and in a historic facility that is gaining a lot of popularity and exposure.”
Sources said the Nets were in discussions with Motorola about renewing its uniform patch rights as it purchased them. The mobile phone company bought those rights for the current NBA season last year for an undisclosed amount.
Of course, even with millions of additional dollars in sponsorship fees, Tsai’s investment may continue to bleed money for a while.
Barclays Center has over $ 500 million in debt, including annual payments of $ 36 million paid in monthly installments. Moody’s in 2019 hit Barclays Center with junk bond status.
Tsai is personally responsible for covering all losses in the arena. For the year ending June 30, 2020, he paid $ 13.5 million to cover his expenses, according to Moody’s. This is despite an annual operating profit of $ 44 million for the team in calendar year 2021, according to Forbes. Moody’s doesn’t see the team’s financial situation improving this year, but notes that Tsai is furiously trying to change things.
“Even with the arena reopening with fans in 2021, we don’t expect operations to immediately return to normal,” Moody’s said in a November 2020 report. “As such, it may require further capital contributions from Mr. Tsai. ”
He added, “We understand that Mr. Tsai and the new Arena CEO John Abbamondi will likely want to make strategic changes to the arena revenue mix to improve financial performance.” In a written statement, Tsai said: “BSE Global has an excellent relationship with Barclays. Neither side seeks to change the name of our iconic building. “
Neither Geico nor Motorola returned requests for comment.