Another Lesson In Why We Shouldn't Subsidize Sports Teams

The city of Glendale, Arizona (a 250,000 population suburb of Phoenix) continues to pour money into its NHL Hockey Team.  The city has already spent $200 million on a stadium and is trying to find a legal way to hand $100 million to a private individual to buy the team and keep it in Glendale.  But that is not even the end of it:

The Phoenix Coyotes are expected to stay in Glendale at least one more season, with or without a permanent owner, if the City Council pledges another $25 million to the National Hockey League.

The cash would go to offset team and arena losses.....

The pledge is the second financial promise in as many years.

Glendale this week paid $25 million it pledged the league a year ago in hopes of keeping the Coyotes in town until a permanent owner was found.

The city paid this year's $25 million from a utilities-repair account.

It's unclear whether that same fund would be used again and when the city would have to pay.

The NHL says the team and arena lost $37 million last season.

Just to give you a sense of scale, $25 million a year is larger than the city's fire department budget.  It is over $100 for every man, woman, and child in the city, each of the last two years.  Residents of the town are subsidizing a money-losing team mainly enjoyed, to the extent it has fans, by people outside of the city of Glendale.  It is a $25 million city annual expenditure that mainly helps three or four bars and restaurants next to the facility.  Just paying off those obviously politically connected retail owners a few hundred thousand each would be cheaper.

  • Scott Finegan

    >>"The city paid this year’s $25 million from a utilities-repair account."<<

    Based on what I am familiar with:
    Towns, cities , states, and at the federal level, if funds are appropriated for a specific task/function, (they) are breaking the law if the funds are redirected to another use. General funds are for unspecified expenditures.

    If memory serves: Former President Nixon attempted to recover unspent monies to reduce the deficit, and lost in court.

  • jdt

    It will be hilarious when they city says it has to raise taxes to repair utilities.

  • Henry Bowman

    I take it the residents of Glendale don't get to vote on this giveaway, right? Isn't it illegal in Arizona for state or local governments to give money to private organizations? Many states make such handouts illegal.

  • Smock Puppet, Mayor, Glendale, AZ

    Warren, you bastard, stop trying to confuse the issue with plain, simple common sense!!

    ==================================================================
    WE'VE GOT A FREAKIN' GOVERNMENT BOONDOGGLE TO RUN, DAMMIT!!
    ==================================================================

  • marco73

    Prediction: As soon as anyone with common sense at city hall shuts off the money tap, the Coyotes will leave Arizona, and will blame the city and state for not supporting them.

  • CTD

    marco73: "blame the city and state for not supporting them"

    Isn't one of their problems that the locals aren't supporting them? I understand that attendance is terrible despite low prices. Which is yet another reason they should leave.

  • Dan

    It seems silly to me to have NHL teams in places like Arizona/Florida in the first place. This is a cold-weather sport.

    Obviously, the whole situation is outrageous. Are citizens up in arms? Are there protests? Or are people just sitting on their duffs? Participatory democracy in action is needed.

  • mahtso

    CTD -- What do you consider to be a low price? From what I've seen good seats are $50 or $60 dollars. Yes, there are cheap seats, but why would I want to pay for the nose bleed section when the good seats are half empty. And, like most sports venues, food and beverage prices are obscene.

  • Dan

    This isn't a state subsidy issue, but here in Chicago, attendance for Cubs games at Wrigley Field is down about 5,000 a game from a year ago.

    Some of that can be attributed to poor April and early-May weather, I suppose. But it's also a sign that you can't keep trotting out a losing team year after year, continually raise ticket prices during a recession and expect people to just blindly turn out at games.

    For yesterday's game, in which there were reportedly around 15,000 empty seats, bleacher tickets were $65 (and for this you sit on hard benches with no backs and there are no reserved seats so you may end up under the scoreboard 500 feet away and five stories above home plate).

    The $65 price is up from $1.50 when I was first going to games there 30 years ago. The bleachers yesterday were no more than half full. I hope it means fans are finally responding to outrageous prices by staying home.

  • DrTorch

    @marco: Yeah yeah, next I bet you predict the sun rises in the east! ;-)

  • marco73

    CTD - You are right, the locals haven't been supporting the team.
    One of the smartest things that any business owner can do is somehow get a government body on the financial hook. The city promises to hand $25 million to a sports team owner, to offset operating losses. The locals haven't been coming to the games in the numbers that the owner needs to make a profit, so instead of the team folding/moving, the city pays the team to stay, and keep losing money.
    If the Coyote's leave Glendale, the newpaper story almost writes itself: the city wouldn't pay to keep them.
    As for hockey in Arizona/Florida, I'm not a big fan, but have been to the Forum for a couple Lightning games. The Lightning have followed the same pattern as the NFL Bucs: go ahead and start the franchise in Florida, and make it a warm weather vacation stop for cold weather fans.
    The Bucs were initially in a division with Chicago, Green Bay, Minnesota, and Detroit. Transplants and travelers almost made the stadium a home game whenever one of the Northern teams came to play. Over time, the local fans began to buy more season tickets, so eventually the crowd became majority Bucs fans.
    Yes, it has cost a pile of taxpayer money to keep the Bucs and the Bolts in Tampa. I have to admit I would be sad to see either leave, but my wallet would (hopefully) be just a little heavier.