Devils, Prudential Center CRO Discusses Importance of Playoff Hockey to Team, Building Profitability

NJD vs. TBL Stanley Cup Playoffs Round 1 Game 4 (photo by Patrick Dodson)

The Prudential Center in Newark, New Jersey is among the marquee sporting arenas in the world (ranked #8th – Billboard Magazine). During the 1st intermission at Wednesday night’s Game 4, JohnWallStreet had a chance to discuss the advantage/drawbacks of the arena’s proximity to NYC and the importance of playoff hockey for the team and the building’s profitability with Adam Davis, CRO of the New Jersey Devils and Prudential Center (properties within the Harris Blitzer Sports & Entertainment portfolio, which also includes the Philadelphia 76ers, Team Dignitas esports franchise and more).

JWS: Since the Nets moved to Brooklyn, the Devils placed an added emphasis on being “New Jersey’s team.” How has that mentality impacted corporate sponsorships?  

Adam: When Josh Harris and David Blitzer bought the team in August of 2013, we looked at it through the lens of this (Prudential Center) being the “Home of the Devils”; we wanted to transition it, to becoming the “Home of Entertainment for New Jersey.” That is also the filter we looked at partnerships through. When we got here we had a lot of great partners, but not ones that were necessarily representative of New Jersey. Fast forward to today and all the brands are representative of Jersey in some way. It could be a global brand like Anheuser Busch who happens to have a brewery in Newark N.J., a brand like Mars chocolates who is headquartered in Hackettstown, N.J. (moving to Newark in 2 years) or a partner like Investors Bank; the largest bank headquartered in New Jersey. Plymouth Rock Insurance, a huge auto insurance company in New Jersey. RWJ Barnabas Health, the largest healthcare system in the state of New Jersey. WaWa, a big convenience store; are all partners. Then, global brands that have a big presence in the state. Enterprise, this is the biggest market for them. Infinity, New Jersey is arguably the number 1 or 2 market in the country for them. So, everything we look at goes through that filter of New Jersey.  

JWS: Is it an advantage to be located so close to NYC or does having MSG and Barclays Center in such close proximity hurt Prudential Center business?

Adam: Both. When I got here, the Prudential Center was trying to be positioned as New York City. As opposed to being the last option in New York, our perspective was “why not be the first option in New Jersey”. That mentality has helped to enhance the content. When we got here, this building was 17th in the country (Billboard Magazine) for entertainment venues. Today we are number 6 in the country, 8th in the world. We’ll do 45 concerts this year. We do more concerts than Devils games, it’s amazing.

JWS: How important is hosting playoff games to the building’s profitability? Team profitability?

Adam: There is no debate that post season play brings an unparalleled energy to the arena, the team and the city of Newark. Obviously, playoff games generate additional ticket sales, partnerships, premium, merchandise, food & beverage; people spend more on food & beverage and merchandise because everyone is really excited, really happy and wants to represent their team. But this has truly been a banner year for the arena. We celebrated our 10th Anniversary, installed the largest in-arena scoreboard in the world with partner Trans-Lux, opened the GRAMMY Museum Experience Prudential Center and welcomed over 150,000 patrons through our doors each month. The playoffs generate momentum for Season Ticket Members in the 2018-2019 season, but outside of Devils game, we still anticipate over one million concert and special event attendees in the coming year.

Howie Long-Short: Several Devils’ corporate sponsors are publicly traded. Anheuser Busch (BUD), Investors Bank (ISBC) and Infinity (a subsidiary of Nissan Motor Co., OTC: NSANY).

In late January, ISBC reported a net loss of $4.8 million for Q4 ’17; resulting mainly from a $49.2 million increase to the company’s annual income tax expenditure (see: Tax Cuts & Jobs Act). Adjusted, net income totaled $48.2 million; +5% from Q3 ’17. CEO Kevin Cummings pointed to “net interest margin expansion (+3.5% YoY), expense control, strong deposit growth (+$481 million in Q4) and asset quality metrics” as highlights for a “strong fourth quarter.” Despite 2017’s large tax bill, the reduced corporate tax rate will be beneficial to shareholders moving forward. The company will report Q1 ’18 earnings on April 26.

Fan Marino: The Prudential Center proudly owns the world’s largest, in-arena, center hung, digital scoreboard. The screen (9,584 sf) is 86% larger than the next largest scoreboard (5,138 sf, Red Wings) in the league, has over 8 million more LEDs than the scoreboard at AT&T Stadium (Cowboys) and is big enough to fit 2 Madison Square Garden scoreboards inside. Remarkably, players on the screen appear to be 4x larger than they are. You can check it out, here!

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Author: John Wall Street

At the intersection of sports & finance.

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