The city of Glendale has at last released figures of how it would pay for its $15 million annual subsidy to the Phoenix Coyotes (see PDF here) … sort of. What’s it’s actually issued is a summary of “proposed draft points and projections” from the group that wants to buy the Coyotes (and get the subsidy), and then a list of city “concerns” that adds up to — well, let’s add it up:
Glendale would, as previously discussed, hand over $15 million a year for the next 15 years to the new Coyotes owners, Renaissance Entertainment Group, to “manage and operate” the Jobing.com arena. In exchange, the city would get:
- $500,000 a year in rent
- $1.5 million a year in surcharges on hockey tickets
- $1.7 million a year in surcharges on other tickets
- $2.2 million a year in parking revenue
- $670,000 a year in arena naming rights
- $150,000 a year in naming rights for a new smaller theater
- Some undetermined amount of sales taxes from “admissions, concessions, etc.”
This list raises almost as many questions as it answers. First off, if the Coyotes keep selling 500,000 tickets a year as they have been, this would mean a $3 per ticket surcharge, which makes you wonder why the Coyotes couldn’t just raise ticket prices by $3 a pop instead of laundering it through the city. (There could be some revenue sharing implications, I suppose but I’m not familiar enough with the intracacies of NHL revenue sharing rules to say.) The surcharge on non-hockey tickets is a weird thing for the Coyotes to “give” to the city, since the city could go ahead and levy this fee (reportedly $5 a head) on concert tickets whether the Coyotes were there or not.
Most of all, though, the above only adds up to $6.7 million a year, which would put Glendale in an $8.3 million annual hole. Counting sales taxes generated at the arena would help fill in that hole, but it’s also a pretty bogus way of doing so, given that 1) only a little over half the attendance at the arena is for Coyotes games and 2) some chunk of that money would be spend in Glendale anyway, since it’s not like those people and their spending money would disappear from Arizona if the Coyotes left.
In short, Renaissance’s proposal is better than “give us $15 million a year for 15 years, and we’ll give you a hockey team that your citizens can continue to be disinterested in,” as it looked a couple of weeks ago. It’s more like “give us $15 million a year for 15 years, and we’ll give you back a few million a year, depending on how ticket sales go, and here’s a bunch of other stuff that we wouldn’t really be giving you, but if you don’t look too hard you can pretend it’s new money, and while you’re at it you can pretend it all adds up to $15 million. Oh, and we get to cancel the lease in five years if we don’t like it (or if we run up $50 million in losses), but you’re stuck with it for 15 years regardless.”
That’s not exactly an offer the Glendale council can’t refuse, which is no doubt why so far they haven’t agreed to it. It looks like two pro-subsidy councilmembers are going to force a vote next Tuesday, though, so we should know by then who’s going to win this game of chicken.