Islanders Could Leave Barclays Center After 2017-18

While the New York Islanders are set to begin their second year of a 25 year lease with the Barclays Center in Brooklyn, a window to renegotiate or opt-out of their agreement opens up following the completion of the 2016-17 season, writes Jim Baumbach of Newsday.

Back in July, it was reported that new owners Jon Ledecky and Scott Malkin (who took over as majority owners from Charles Wang on July 1st) were in discussions about a possible relocation to Queens, NY near Citi Field and also Belmont Park.  While Ledecky noted earlier this week that Barclays would be their home “for years to come”, he wouldn’t confirm that ‘years to come’ meant staying past the opt out date.

As Baumbach reports, the new Islander ownership group and representatives from Barclays have until January 1st, 2018 to renegotiate the current deal once the window opens up following the conclusion of this season.  If no agreement is reached, both sides have until the end of that month to formally opt out of the arrangement but only if ‘good faith discussions’ have been held.  This means that the team could in theory leave Barclays as early as the end of the 2017-18 season or the year after that.  Should the Barclays group choose to opt out, that would potentially leave the team without a home past 2018-19 although the two sides could renegotiate a smaller deal after that.

When asked for comment, NHL Deputy Commissioner Bill Daly noted that there has been no indication that their stay in Brooklyn is temporary.

The provision of good faith discussions is an intriguing one as it would be highly difficult for the new Islanders owners to have an agreement to move to or build a new arena and still engage in good faith talks with the Barclays representatives.  On top of that, the amount of work that would need to be done for a potential new arena elsewhere in New York is substantial and time consuming making the window for the team to have a backup plan in place to move to if they exercise the opt out a very limited one.

Last season highlighted the good and the bad of the current deal.  While the Islanders received $53.5MM from Barclays – more than they were making at Nassau Coliseum – their attendance was third lowest in the NHL at just 13,626 fans per game.  On top of that, when the arena was built, it wasn’t designed with hockey in mind which resulted in some obstructed view and odd angle seating which has come under criticism.

Moving forward, the $53.5MM fee increases by 1.5% per year although Barclays receives the ticket and concession revenues (among others) to offset that amount.  As a result, the current arrangement limits Ledecky and Malkin’s growth potential which gives them another reason to consider other options within the state.

On the one hand, the earliest that the opt out could occur is still a fair ways away at 16 months.  On the other, given the amount of work that would have to happen on a potential new arena in New York for them to be able to move after year three or four of this deal, that doesn’t really leave a whole lot of time in the grand scheme of things.  This undoubtedly won’t be the last we hear of this matter in the weeks and months ahead as Ledecky and Malkin continue to investigate their options.