January 15, 2015

With Future in Mind, NJSEA Commissioners Vote to Close the IZOD Center
Arena Closing Opens New Opportunities for Meadowlands Entertainment Complex

Today the Board of Commissioners for the New Jersey Sports & Exposition Authority voted to close the arena at the MetLife Sports Complex (currently named the IZOD Center) due to a changed competitive environment and persistent financial losses. The closing, which is expected to be temporary, represents a significant opportunity for the repurposing and re-imagining of the 34-year-old arena and its integration into the ongoing redevelopment of the Meadowlands entertainment complex.

“Just about everyone in New Jersey and the region has great memories of big-name concerts, basketball or hockey games or other family entertainment at the arena,” said NJSEA President and CEO Wayne Hasenbalg. “Times have changed, however, and this should be viewed as a new opportunity for the entire Meadowlands entertainment complex, as interested parties -- including the owners of American Dream -- look at ways to rejuvenate and reintegrate the arena for optimal use, value and long-term success. The closing decision, while difficult, is a necessity, given the financial realities, loss of revenues due to competition, decisions to move by anchor sports franchises, and other contributing factors, including the prospect of severe disruption as construction of the neighboring American Dream project gathers pace over the next 18-months.”

Once among the most profitable entertainment venues in the country, in recent years the arena has slipped consistently into the red. The NJSEA’s current forecasts, which were developed in conjunction with the state Department of Treasury, estimate that the arena’s losses during the first 6 months of 2015 will average $709,000 per month -- or more than $8.5 million over the full year -- with little or no sign of improvement for the foreseeable future.

Mr. Hasenbalg added: “The arena has been dependent on State support for some time and closure or the transfer of the facility to a private operator was inevitable, it was just a question of timing. Treasury’s independent review helped substantiate our findings that such a difficult decision should not be delayed. Considerations and uncertainties relating to the expected ramp-up of construction activity at the adjacent American Dream project and its ultimate opening date and success make it prudent for the Authority to not rush any decision on the long-term future of the arena.”

In addition, the Board of Commissioners approved an arrangement that will allow currently-booked and scheduled events at the arena to be transitioned to Newark’s Prudential Center. “We are delighted that Prudential Center has agreed to partner with the Authority in not only assisting the Authority to manage the closure of the arena and the transitioning of events to another outstanding North Jersey venue, but also in further evidencing its commitment to the region with a bundle of benefits designed to reduce the impact of the arena’s closure,” said Mr. Hasenbalg.

The Prudential Center agreement includes a share of event revenues expected to be $2 million over four years and various benefits for the region including the following:

• Real estate investments in the vicinity of Prudential Center;

• Significant marketing opportunities for Newark (specifically Symphony Hall) and Atlantic City;

• Community service, outreach and other programs, for example, donating $1 million in tickets to non-profits for Devils home games.

The Prudential Center has also agreed to provide opportunities for arena employees to interview for positions commensurate with their experience and responsibility levels. In addition, Prudential Center will hold a job fair no later than March 1, 2015 for current arena employees.

Since it’s opening in 2007, Prudential Center has been recognized as one of the top venues in the country and around the world, attracting approximately two million fans a year to high-profile sports and entertainment events, including concerts, family shows and special events, while serving as home to the National Hockey League’s New Jersey Devils and Seton Hall University’s Men’s Basketball team.

Separately, the Board also voted today to approve an agreement with MetLife Stadium that would see the Stadium assuming direct responsibility for the approximately 1,100 service and security workers currently provided by the Authority to the Stadium for events. The change is not expected to have any impact on current Stadium event employees who are all expected to be rehired by MetLife Stadium.

Since the closing and demolition of Giants Stadium, the NJSEA has reduced its headcount by approximately 70 percent. It has also exited the horse-track racing business, including Monmouth Park and the Meadowlands Racetrack, both of which are now privately operated. Even as its business model has evolved NJSEA has relied on large state subsidies to operate and cover legacy costs like pension and health benefits. This temporary closing of the arena represents another step in the repurposing and reshaping of the NJSEA, and the sports complex that it oversees.

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