By Scott Soshnick (This article first appeared in Bloomberg.com)
After two years and countless complaints, Brooklyn’s Barclays Center has concluded it’s no longer worth it to host the New York Islanders.
The arena, which is already home to the NBA’s Nets and one of the world’s top-grossing concert venues, would make more money without the National Hockey League team, according to people familiar with the facility’s financials.
Russian billionaire Mikhail Prokhorov, who owns the building and the Nets, has since November been seeking an investor to take a stake in both. As of earlier this month, a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season — a clear signal that the team won’t play there, the people said.
Barclays Center wouldn’t speak to the future of the Islanders. Tim Leiweke, co-founder of Oak View Group, which has been advising the hockey team in talks with the arena, declined to comment, as did a spokesman for Islanders owners Jonathan Ledecky and Scott Malkin.
The team’s tenure in Brooklyn has been rocky from the start. Average attendance has fallen to 12,828, third-worst in the NHL. Fans have complained about poor sight lines, and players say the ice is sub-par.
What’s more, the Barclays-Islanders agreement is unusual, in that the arena pays the team an average of $53.5 million a year in exchange for control of business operations, which includes revenue from ticket and suite sales.
The lease can be terminated by either the Islanders or arena management. If the team cancels, it can leave after next season. If Barclays Center nixes the deal, then the Islanders’ tenancy would end after the 2018-19 season. Then the question becomes: Where will the Islanders play?
In July, Bloomberg News reported that Ledecky and Malkin were considering building a new arena adjacent to Citi Field in Queens. Prokhorov now owns the team’s former home, the Nassau Veterans Memorial Coliseum, but the owners paid a hefty premium for the team in 2014 based on the pending move to New York City. They have shown no interest in returning to Long Island.