It's not a good sign when a professional sports team, especially an NBA franchise, markets its tickets to fans with a buy-now-pay-later plan. Yes, times are tough, but that's not the only reason the New Jersey Nets are desperately trying to fill seats. As plans to move to Brooklyn stall, fans in New Jersey are abandoning the team -- it doesn't help that the team last season returned to its losing ways -- prompting interest from bargain shoppers hoping to add a sports franchise to their personal fortunes.
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The economic slowdown has also put a full court press on Nets owner Bruce Ratner. So much so that the billionaire real estate mogul turned NBA franchise owner explored selling the team over the last year, according to the New York Daily News. The Business Sheet blog reported that the buyers included oil moguls from Dubai and a Russian oligarch. The Daily News quoted an anonymous source, saying that Ratner wanted to unload the Nets because the team was "hemorrhaging dollars."
What better reason to sell a team? The club has never been able to translate on-court victories with profits and from the beginning has earned the label of being the poorer cousin of its rivals across the Hudson River, Cablevision Corp.-owned New York Knicks. Remember, in order for the Nets to join the NBA in 1976, the franchise was forced to sell Hall of Famer Julius Erving in his prime to pay a $4.8 million territorial fee to the Knicks. The Erving sale has cast a pall over the franchise ever since. In fact, the Nets reportedly have been losing a hefty $20 million to $25 million annually for the last couple of years, with the same hole expected this season -- even after unloading Jason Kidd last season.
And while the financial crisis may prompt Ratner to sell, now is not a good time to sell for the same exact reason. Buyers have limited access to credit, and sports franchise valuations are likely down because of the slow economy -- not to mention the prospects for the Nets' future on the court seem dim.
Like a blocked jump shot, Ratner's linchpin idea to turn around the club so far has been rejected. The move to downtown Brooklyn with a new stadium has been postponed because of financing delays and lawsuits. However, an alternative to Brooklyn or a sale exists in the form of a move to Newark, N.J. The city's Mayor Corey Booker has suggested the club move to the recently opened Prudential Center, the new home of the NHL's New Jersey Devils.
The credit crisis has left Ratner scrambling for money just as banks have tightened their purse strings. Meanwhile, fans are cutting their discretionary spending, and even the NBA -- once seen as the model of profitable sports league -- is tightening its spending with a recent layoff of 80 of its workers in the U.S.
The NBA season tipped off Tuesday, and the Nets pulled off an opening win on Wednesday over the Washington Wizards. Ratner is hoping those wins continue to buy him enough time until the credit markets thaw. And, hopefully, translate those wins into a decent offer for his club or the money he needs to build a new home that will likely increase the value of the franchise for a future sale. -
Gerald MagpilySee story from the Daily News
See related story from the Business Sheet
