Quebec City is not getting an NHL expansion team today (Las Vegas is), but it still has the $400 million arena that taxpayers put up around $330 million to build. And quelle surprise, it’s already losing money:
The $400-million arena opened its doors to the public last September and ran an operational deficit of $1.4 million in its first four months.
That’s not good.
The contract states that the city has to pay 50 per cent of the operational deficit incurred by QMI Spectacles, an affiliate of Quebecor, up to the amount of the arena’s rent.
That’s even worse! CBC News says this will cause Quebec to have to pay the arena operators $730,000, but if you project it out over a full year, it’ll be a $2.2 million check, or a rebate of almost the entire $2.5 million annual rent payment from Quebecor. That would bring the total public subsidy for the new arena to around $370 million, which would be a crazy-high amount to get an NHL team (you could buy a slightly used one for less than that price), if they were getting an NHL team for that price.
The lesson here is … well, all the usual lessons about not spending so much public money on a sports venue and hoping you’ll earn it back on new revenues, and not building on spec, and so on. Mostly, though, it’s that when the mayor jokes that his cousin will be the main attraction at your city’s new arena, be afraid, be very afraid.