This story on the battle for Long Island's Nassau Coliseum is an excerpt rom the latest issue of Billboard (June 8, 2013), which also features a cover story on J. Cole and the follow-up to his album that “changed the business model;” the publishing hitch in Apple’s iRadio roll-out; how five independent labels are working together to create autonomous deals with major distributors; a report on the progress in LGBT music; and much more. Pick up this issue HERE; and become a Billboard subscriber HERE.
When the Barclays Center opened in Brooklyn last October, adding a new world-class arena to an already competitive marketplace, many felt that the Nassau Veterans Memorial Coliseum on New York’s Long Island, at more than 40 years old, would be the odd building out.
But, in an unexpected turn of events, all eyes are on Uniondale, N.Y., as the Nassau Coliseum is now the focus of an intense bidding war, with four viable partnerships making a run at this potentially lucrative market. The stakes are high, the competition fierce, and underlying stories are many. At stake is one of the most valuable pieces of business up for grabs in recent years.
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In the hunt are partnerships led by Madison Square Garden Co. (MSGC); the Nassau Entertainment Committee (NEC), led by Forest City Ratner, the group that developed the Barclays Center; and facility management firms SMG and Global Spectrum, both separately partnered with local developers, and long fierce competitors for business in their own right.
AEG Live CEO Randy Phillips is among those convinced that Long Island is a separate market from New York. “Whenever we do shows at Barclays Center or the Garden, anything that sells out, we’ve never sold more than 13% of tickets in Long Island,” he says. “To us, it’s no different than in L.A., where you have Staples Center in L.A. and the Honda Center in Anaheim. When we plan tours, we never miss playing both markets in Southern California.”
What each bid has in common is a new Nassau Coliseum, whether through renovation or ground-up construction, at least some change in capacity and private funding. Both Global Spectrum and SMG (representatives from both deferred to their respective development partners) have broad scale, experience and histories of success in a wide range of projects. MSGC is the reigning New York market king and deeply involved in similar projects, and Forest City clearly has ambitions of elevating its presence in this sector and parlaying its success in Brooklyn into flags planted on Long Island and beyond.
Under the NEC umbrella, Forest City partnered with Guggenheim Partners, owner of Billboard parent Prometheus Global Media (Guggenheim recently bought such properties as the Los Angeles Dodgers and Dick Clark Productions and made a hard run at AEG); Yankees investment group Legends on the hospitality side; Nets owner Mikhail Prokhorov’s Onexim Sports & Entertainment on the sports front; and, on the content side, Live Nation and Jay-Z’s Roc Nation. Also onboard is Barclays Center designer SHoP Architects.
The NEC bid calls for downsizing the arena from its current capacity of about 18,000 to around 13,000, with a theater configuration of 4,000-8,000 in the lower bowl. A 15-month construction project would cost about $89 million. Long-term plans call for a retail/entertainment footprint that includes a Fillmore-sized theater from Live Nation, a movie theater, a 2,500-capacity amphitheater and 50,000 square feet of restaurant/retail space. NEC estimates total costs for the continued development to be approximately $140 million, with the entire project costing about $229 million in private money.
MSGC indeed has a strong personal connection to Long Island, which is home to the Dolan family that controls the business. The Dolans, who also control Cablevision Systems, are entrenched in the Long Island market in terms of media: MSG Network (which has telecast Islanders games for 30 years), MSG Plus and Fuse have 700,000 subscribers on Long Island, and the MSG ticket buyer database boasts 650,000 Long Islander names. They also control the local newspaper, Newsday. Word on the street is the Dolans want this one bad.