“Let’s face it, the Coliseum is a dump, and the team, well, they’re losers. It’s a real shame. We want to see it change because this is our home. We all deserve better.” – Charles Wang, owner New York Islanders
Nobody could have recognized this at the time, but in retrospect it was a perfectly telling quote: dry, disarmingly blunt, yet somehow starry-eyed.
Born in Shanghai in 1944 and raised in Queens in the ‘50s and ‘60s, Wang had surfed the mighty first wave of the internet age. As founder and CEO of Computer Associates, he was well-known — feared and loathed, too, for his aggressive corporate takeovers — in the tech world, even if he didn’t enjoy the broader cachet of a Yahoo! or Dell. Still, his $1.5 billion net worth was a lot of cake in the pre-hedge-fund era, and it let him do what many New Yorkers with that kind of cake would: settle on Long Island’s lavish North Shore.
Wang possessed no great passion for hockey. But soon after buying the team, he began to advance a project that clarified his aims.
It was called the Lighthouse Project, a real-estate proposal of audacious scope. The obvious centerpiece was a full renovation of the Old Barn, which had recently turned 30. But it was the rest of the project that made it a true humdinger.
Wang (and his army of private-sector supporters) envisioned high-rise housing, retail, comfy cafes and restaurants. There was to be green space, a recreation center, a sports medicine center, a convention center, and an accompanying expo hall. One version included a minor-league ballpark. In the first proposal, there was a five-star hotel with a 60-story tower styled like a lighthouse. Wang was supposedly inspired by the 3rd-century Pharos of Alexandria that counts among the seven wonders of the world.
Long Island was the ‘burbs, a place for people to escape the city. But this was a complete diorama of another way of life: dense housing, mixed-use development, walkable living. It looked nothing like how Nassau County had always seen itself: “A region where the DNA is suspicious of anything urban,” one Times columnist said.
Yet here was Wang pitching it as the best way to keep the Islanders there. Projected cost: $3.8 billion.
Public opinion: ambivalent.
The project became an urban-planning guerrilla war. There were ballot initiatives, hearings ad nauseam, stacks upon stacks of studies and countervailing studies. At one point, Wang agreed to chop the 60-story tower into two with 36 each. At another point, Nassau Coliseum’s own hometown, Hempstead, shot back a plan capping the towers at nine stories and purging most of the housing. The aughts slid by with debates like these.
“Eight years later. I’m still at it, guys!”, Wang joked to reporters in 2009. He said all he wanted from the county was a simple yes or no. And if the answer was no, then he had to look at other avenues.
The feuds drew longer; time grew short. The Islanders’ Nassau lease was up in 2015. Meanwhile, the team itself was giving Wang no leverage. The Isles missed the playoffs six times in the aughts; the four times it got in, it was bounced in the first round. By the 2008-2009 year, the offense had become so anemic that a defenseman led the team in scoring, even though he ranked 81st in the league. The coaching job had become a carousel.
Notionally, hockey problems aren’t the owner’s fault. Fans beg to differ. They’ll point out that in 2006, under Wang’s direction, an up-and-coming GM was hired and fired in a span of 40 days. The same year, the team signed a goalie to what was then the longest contract in NHL history: $67.5 million, 15 years. Rick DiPietro had been paid like a franchise goalie but never played like one. He had surgery every year from 2007 to 2009 and entered hockey history as one of its greatest busts.
However you trace the blame, the point is that the Islanders were dying a slow death in the Old Barn. As the decade closed, attendance had sunk to dead last in the league. A Forbes columnist summarized them as “a franchise losing some $20 million a year in the biggest sports market in America.” Wang himself was estimated to have lost some $300 million, nearly double what he paid for the team in the first place.
“If I had the chance I wouldn’t do it again,” he told Newsday in 2009.
Wang had always said his aim was to keep the Islanders at Nassau. But no businessman can endure such losses indefinitely. Rumors swirled about a team move. Wang arranged an exhibition game in Kansas City, which happened to have a sparkling new arena and no pro hockey team.
Message sent. As Brooklyn-native Chris Rock would say, “A man is basically as faithful as his options. No more, no less.”
In 2009, Wang found a dangerously credible option. Over in Brooklyn, a real-estate magnate named Bruce Ratner had secured a $4.9 billion development.
The city had cleared the land using eminent domain. Ratner wanted to put up sixteen new towers, packed with condos and commercial amenities: the perfect way to capitalize on a gentrifying borough and New Yorkers willing to pay anything for anything. To seal the deal, a new sports arena would be jammed into the elbow of Flatbush and Atlantic Avenues, the crossroads of Brooklyn.
The arena was meant for hoops, not hockey, and it was technically Long Island, but not really. But Wang saw his exit: a way to ditch his bleeding investment while half-keeping his promise to keep the Islanders home.
The deal was sealed in August 2012. In a $485 million deal (according to Forbes), Wang sold ownership stakes to a pair of businessmen who had made their fortunes in office products and high-end retail, respectively. Wang, ever the Islander, would retain majority ownership for two years. But after that, his stake would diminish until – blessedly, for Islander fans – control would shift to the new owners.
“They wanted me to stay on,” Newsday reported him saying. “I liked them and I wanted to stay on and help. This is still the Islanders. It’s my baby in many ways.”
Every business deal has a rationale to it, and sometimes it’s visible to those of us that deal in figures less than nine digits. Based on what’s public, this looked like a terrific deal for the Isles. They traded a small, unstable ticket base at Nassau for a steady paycheck at Barclays: about $50 million a year, according to the New York Post. The Barclays Center itself declined to comment on financial figures for this story.
The Islanders traded the Great Roomba of Long Island for a 25-year lease in a state-of-the-art stadium. They vanquished the fear of poaching by Kansas City or Quebec City or somesuch for, well…not Long Island exactly, but close enough, right?
The math seemed to add up for the Isles. For the Barclays Center? Tougher question.
One obvious response is that for any stadium, traffic’s a good thing. Barclays already enjoys marquee draws like Barbara Streisand, NCAA hoops, Disney on Ice, and televangelist Joel Osteen. But nothing fills the calendar quite like professional sports, especially two sports that play 40 home games a year.
Hear those cash registers? That means more food and beer sales. Higher prices for the corporate suites. More leverage over anyone who wants to feature on the floor. Even if the Islanders were a Cirque du Soleil troupe, this would make sound business sense.
But the Islanders aren’t French contortionists. They’re a hockey team moving to a basketball town, and one that already has a team across the East River at any rate. This is where the Barclays move gets even more interesting.
As it turns out, when Wang sold the team, he conceded all sales, marketing, and merchandising operations to the Barclays Center, according to Newsday. The Islanders, of course, maintain full control over the team that steps onto the ice. But every other aspect of the Islanders experience, from the branding to the ads to the gear, falls to the Barclays Center.
The detail may seem minor. But, if the press reports are true: remember that the Islanders will collect a steady paycheck every year. The Barclays Center pays that check.
This implies that, for the Barclays Center to turn a profit on the Isles, it will have to earn more than that paycheck. In effect, the Barclays Center has bet that it can make the Islanders profitable.
“There’s a lot more pressure now on the ownership of the Barclays Center because they made a financial guarantee [so] that the Islanders would come to Brooklyn,” said Bob Gutkowski, a sports adviser and former president of Madison Square Garden. “So the Islanders are basically just a tenant with a strong guarantee, and Barclays and the Nets organization will have to work hard to generate the revenue streams to meet the guarantee that they made to the Islanders.”
Tom Stallings, a professor of sport management at Rice University who once had to market minor-league hockey in Houston, put it like this: “If you’re good at selling, it doesn’t really matter what the sport is.”
SAQIB RAHIM | @SaqibSansU
Like many fans, Saqib Rahim is the product of his sports traumas. Saqib is a 2015 Dat Winning fellow.