NETS’ NAME GAME
Success widens branding options
The Brooklyn Nets are riding their newfound fame to a slew of lucrative sponsorship deals that could culminate in the renaming of Barclays Center, The Post has learned.
The NBA team, owned by Internet billionaire Joe Tsai, is aggressively scouting new corporate sponsors at a time when its successes have positioned him to drive a hard bargain and add millions of dollars to the franchise’s bottom line, sources said.
The Nets have been actively wooing new sponsors for the patches placed on players’ jerseys — a branding opportunity now paid for by cellphone maker Motorola. According to a source close to the situation, the Nets are also shopping for a new corporate sponsor for the arena’s main entrance, which is currently named after insurance giant GEICO.
Sources say they expect the team to snag as much as $13 million a year for the uniform rights alone — or more than British bank Barclays currently pays each year for the naming rights to the team’s 17,732-seat arena, Barclays Center.
And it’s just one reason industry sources expect the Nets will soon be on the lookout for a new corporate sponsor to replace Barclays.
It’s not just idle speculation. When Tsai bought a controlling stake in the Nets and Barclays Center in 2019 for a combined $3.5 billion, he was sold partly on the notion that he could increase the value of the arena’s naming rights by 2022, thanks to a contract clause allowing the parties to part ways after 10 years, sources said.
Barclays currently has the right to pay $10 million a year for the naming rights through 2032. And while that might seem like a steal for the multipurpose facility, Barclays’ original reason for sponsoring the arena was swept away with the financial crisis in 2008.
The bank agreed to put its name on the arena in 2007, when then-CEO John Varley was planning a major expansion of its US retail operations.
But the global financial collapse forced the embattled British bank to retreat from its US ambitions. Barclays still has a US credit-card business, but zero brick-and-mortar banks.
The Nets also have reason to bow out. By the time the arena was finally erected in 2012, the team had reluctantly agreed to halve Barclay’s annual sponsorship fee to $10 million from the originally agreed-upon $20 million.
Now, branding experts say, the NBA franchise could easily snag between $15 million to $20 million for naming rights to the arena, especially if the team stays on its current trajectory.
When Tsai bought the Nets from Russian billionaire Mikhail Prokhorov in 2019, the team was one of the worst in the NBA. Now its triumvirate of star players — Kevin Durant, Kyrie Irving and James Harden — have made the Nets one of the most-watched teams in the league.
Its star power was made abundantly clear last week when illustrated versions of the superstar trio graced the cover of The New Yorker.
“Brooklyn and the Barclays Center is at the epicenter of sports, entertainment, media and culture,” said Octagon Executive Vice President Woody Thompson, who advises major brands and clients on sponsorship opportunities, including venue-naming rights.
“There is an opportunity here to be in a part of the city, and in a landmark facility that is gaining a lot of steam and exposure.”
Sources said the Nets are talking to Motorola about renewing its uniform patch rights as it shops them around. The company last year bought those rights for the current NBA season for an undisclosed amount.
Of course, even with millions more in sponsorship fees, Tsai’s investment may continue to bleed money for some time.
Barclays Center has more than $500 million in debt, including annual $36 million payments made in monthly installments. Moody’s in 2019 slapped the arena with junk-bond status.
Tsai is personally responsible for covering all the arena’s losses. For the year ending June 30, 2020, the Chinese tycoon shelled out $13.5 million to cover its expenses, according to Moody’s. This despite an annual operating income of $44 million for the team during 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 turn things around.
“Even with the arena reopening with fans during 2021, we do not expect operations to go back to normal immediately,” Moody’s said in a November 2020 report. “As such, this may require further capital contributions from Mr. Tsai.”
It added: “We understand that Mr. Tsai and the Arena’s new CEO, John Abbamondi, will likely want to make strategic changes to the arena’s revenue mix to improve financial performance.”
Mandy Gutmann, senior vice president of communications and community relations for BSE Global, which manages and operates the arena, said, “BSE Global has a great relationship with Barclays. Neither side is looking to change the name of our iconic building.”
Neither Geico nor Motorola returned requests for comment.