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Credit Crisis Hits NYC Teams

Any team building a new stadium and trying to sell sponsorships, luxury suits and personal seat licenses is facing a daunting landscape these days. The global credit crisis now strangling the financial world in a manner not seen in a generation has caused financial institutions to crumble and sponsorship and advertising dollars to disappear in a wisp of smoke and government takeovers.

The crisis probably hits New York City the hardest as it is home to so many of the American financial institutions and five teams in the major professional sports are bringing new stadiums online in the next couple of years. The Mets and Yankees have played their last seasons in Shea and Yankee Stadium and are selling season tickets, sponsorships and luxury suites for next season and beyond. The news is surprisingly good for the Mets as the club says that all 49 suites have been sold at prices up to $500,000. The Yankees have not been so lucky. There are 47 suites in the new Yankee Stadium although not all of them will be sold. The club still has 7 for sale at $600,000 each, having sold out all of the more expensive suites, which were priced at $650,000 to $850,000.

The Jets and the Giants are in the middle of the process of selling personal seat licenses for their new stadium being constructed at the Meadowlands. So far, the Giants have not had any cancellations, just requests for cheaper seats. The Jets are about to conduct an auction, which will be closely watched all around the league as a gauge on the impact of the crisis on fans willingness to part with money for PSLs.

Sponsorships are starting to dry up and that may prove problematic for the Giants and the Jets, as well as the Nets who are moving to Brooklyn in 2011. The Giants and Jets are seeking a naming rights sponsor for their stadium. Barclays is the sponsor of the Nets new arena paying $40 million over 20 years and while it has not yet indicated any intention of backing out of its agreement, the deal made sense to Barclays when it intended to expand its retail operation in the US. How much or if it even intends to do so given the current circumstances is certainly open to question. The other worry for the Nets is how the credit crisis will impact the team's ability to finance the project since the financing package for the project and its accompanying real estate development has yet to be finalized.

Full post as published by Sports Biz on October 11, 2008 (boomark / email).