Summit County, Ohio is considering raising sales taxes by 0.25% to build a 9,000-seat arena for the University of Akron. That in itself isn’t all that unusual — at least the University of Akron is a public university (unlike, say, Syracuse), though traditionally that would mean the state would be paying for such things, not the county the school happens to be located in.
College sports subsidies are usually outside the scope of this site, but I want to call attention to this one because of the Cleveland Plain Dealer article reporting on the plan. It dutifully reports on the size of the proposed arena, how much luxury suites would cost, how a feasibility study determined that an arena would be “economically viable,” blah blah blah. What’s missing: Does this viability mean that the county would actually get repaid its money over time from arena revenues?
As it turns out, no, it would not. Buried deep in an article from the Akron Beacon Journal:
UA would be financially responsible if the arena lost money “up to a maximum annual amount” that still needs to be set. The university also would receive the profit if the arena made money.
So the county would pay the entire construction cost and be responsible for any major losses, but get none of the operating profits on the building. Sounds fair to me! Or as one university trustee put it:
“It is a win-win for all of the parties,” said Trustee Roland Bauer, who was in the group that put together the arena plan.
Look, I understand that daily newspaper reporters are not economists, and that they’re on deadline, and the first draft of history and all that, but is really shouldn’t be that hard to remember one simple concept: Figure out what each party in a deal is getting, not just what they’re each spending. Actual journalism — try it, you’ll like it!