Josh Harris said Newark’s Prudential Center was a more important financial piece in his purchase of the New Jersey Devils than the hockey team itself.
Harris and David Blitzer, a New Jersey native and senior managing director of Blackstone Group LP, purchased the National Hockey League franchise last month in an agreement that also gave the partnership control of the Prudential Center.
Located three blocks from Newark’s main transportation hub, the $385 million Prudential Center was opened in 2007. Harris called it “one of the most modern arenas in the country.”
“And we think that with the new capital structure and the new ownership group and the new management that we put in, that we’ll be able to make this arena really realize its potential financially,” Harris said in a Bloomberg Television interview.
Harris, who bought the National Basketball Association’s Philadelphia 76ers in 2011, acquired the NHL team in a deal valued at about $300 million.
Harris has already made changes to the Devils’ business personnel, hiring Scott O’Neil as chief executive officer. The former president of Madison Square Garden Sports, O’Neil is also the chief executive of the 76ers.
Harris said he viewed the Prudential Center as complementary to New York City’s two main arenas, Madison Square Garden in Manhattan and the Barclays Center in Brooklyn. The home of theNBA’s New York Knicks and NHL’s New York Rangers, the Garden is completing a $1 billion private renovation. The $1 billion Barclays Center, home of the NBA’s Brooklyn Nets, opened last year.
“If you’re a big concert event and you stop in New York, you’re probably going to play one of MSG and Barclays, and this arena,” Harris said of the Devils’ home.
O’Neil said in another Bloomberg Television interview last week that the Prudential Center was the fourth-highest grossing arena in the nation, behind Barclays, the Garden and Staples Center in Los Angeles. He didn’t offer specific figures or the source of his information.
Located about 11 miles (18 kilometers) from New York City, the Prudential Center has been a one-tenant building since the Nets moved to Brooklyn prior to the 2012-13 season. Harris said the venue’s concerts and special events would be enough to sustain the building without a second professional team.
“Having a basketball team, an NBA team, in this arena is not in the business plan right now,” Harris said. “We don’t think it’s necessary.”
Interesting bit of arena drama right now in New York. You have Madison Square Garden being evicted, the Nassau Coliseum being totally renovated and refurbished, the Baclay’s Centre opening, and now the New Jersey Devils being purchased not for the team, but because it gives them access to Newark’s Prudential Centre.
In case you think this is just a New York thing, check out what MSG is doing with the old Los Angeles Forum, a building many thought would be torn down.
The first thing to consider is that arenas are costing $300 million dollars at least with many heading towards the $500 to a $1 billion range (depending on land prices). Older arenas like Nassau and The Forum now have tremendous value, if you can call a $100 million renovation a value, in part because modern arenas have become so expensive, they aren’t viable in non-premier markets. Remember that the City of Edmonton is paying a subsidy to the Edmonton Oilers to operate their new arena and Glendale is paying a large subsidy to the Coyotes to manage their arena.