Friday, August 17, 2007

Let The Blackmailing Commence

All too often, professional sports franchises depend upon local taxpayers to make a profit. Local taxpayers are forced to build stadiums and give breaks on taxes and other expenses under the threat of the team moving to another city if the demands are not met. Quite often it is the franchises that are the weakest financially that ask for these breaks because they are the ones who need them to stay alive. This creates a class of corporate welfare dependant teams that cannot afford to put a winner on the ice when the league would be better served by letting the weaker members of the league die off either by contraction or moving to new markets.

These threats have successfully go the Pittsburgh Penguins new stadium funded and seem to be well on their way to getting a new arena for the Edmonton Oilers. Fundamentally, the problem is that NHL franchises are run by some very rich people, why should local taxpayers have to pay to make them richer? The NHL is a multi-billion dollar industry. If they cannot figure out how to make a profit from that money without holding local taxpayers hostage, does that not show a fundamental problem? In many cases, the taxpayer funding is a key part of the operating plans of teams.

The latest team to ask for taxpayer help is currently the weakest one financially. The Nashville Predators have a tenuous ownership situation. They are owned by Craig Leipold who wants to sell and has reduced payroll (and thus the quality of the team) this summer. A "local" group (headed by William "Boots" Del Biaggio who is intent on moving the team to Kansas City) has submitted an offer to buy the team. The likelihood of this group making a profit in Nashville, given the failing Leipold has with a pretty good team, are low. Likely this local ownership is a temporary solution that will delay the inevitable moving of the Nashville Predators to a new market. This ownership group is looking for taxpayer help. They want a favorable new lease with the Sommet Center, where they play home games, which would cost local taxpayers around $3 million a year. This is the first (will there be others?) demand for concessions from local taxpayers to keep NHL hockey in Nashville.

Nashville has proven to be a poor hockey market so far. It may have some diehard fans, but there have not been enough to make the team profitable. Likely taxpayer subsidy means we will be stuck with an also ran team that cannot afford to compete. The NHL does not need that. It would be better for the NHL to not have weak teams that cannot afford to keep their talent. It is better for local Nashville taxpayers to not spend their tax money on a weak local team that cannot survive without subsidy. As things stand, local taxpayers subsidize the arena by about $13 million a year. This would increase to about $18 million, but Nashville Predator ownership would assume some losses (hence the $3 million figure).

If Nashville cannot support a good hockey team (meaning one that does not offload talent when it becomes expensive if the team can win) without public taxpayer funding then it is better for all involved for them to not have one.

Here is the article from the Tennessean newspaper.

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