Columbus’s Nationwide Arena, the privately built and publicly bailed-out home of the Blue Jackets, is running out of money unless the county rides to the rescue with a citywide tax on sports and entertainment tickets:
The initial proposal outlined in January was for the city to levy a tax of 3 to 8 percent on tickets to arts, cultural, entertainment and professional sporting events within the city limits and for Franklin County to contribute sales-tax revenue.
Together, those sources could generate $15 million to $20 million a year, with $4 million being earmarked for the arena and the rest going to artists and organizations that the arts council supports.
Basically, what’s going on is that the county funded the arena bailout, including future renovations, with a casino tax, and Columbus residents just haven’t been gambling their money away like everyone had hoped. And while initially the county arena authority proposed just a tax on tickets at the arena, that’s expanded to a tax on all tickets anywhere in Columbus, and arts groups and their supporters are understandably miffed about the prospect of having to be taxed in order to fund a competing entertainment option just because the Blue Jackets needed to make more money.
(Ticket taxes, as has been covered here ad infinitum, tend to come out of the pockets of those selling tickets, not buying them, as they’re already charging the maximum that the market will bear; though there’s some argument that a citywide ticket tax would hit ticket buyers a bit harder, since they wouldn’t be able to avoid it by going to see some event other than hockey.)
So we have the specter of Don Brown, executive director of the Franklin County Convention Facilities Authority, saying of a money-losing arena, “To keep that magic happening, we have to keep reinvesting in the arena itself.” Magic!
Plenty of other local governments have funded their sports venues with ticket taxes, of course, among them Hartford, Connecticut — where the public operators of that city’s arena want nothing more than their ticket tax to go away:
The overseers of the XL Center in Hartford say the venue is feeling the sting, in more ways than one, from a 10 percent state admissions tax that kicked in six months ago.
The levy has played a role in the 16,000-seat arena striking out on as many as a dozen events, mainly concerts, that it bid on, according to Michael Freimuth, executive director of the Capital Region Development Authority (CRDA), XL Center’s management overseer…
The problem, Freimuth said, is that the tax curtails a show’s potential profit margin “by such a degree that it results in the building losing actual events and the subsequent revenues.”
Connecticut’s is a statewide tax (though some venues have gotten exemptions, including the Hartford arena at times in the past), so it’s not entirely clear what the arena managers or concert promoters are griping about — it’s not like they can get out of the tax by just going to, say, Bridgeport. Though I suppose griping is how concert promoters get better deals — Freimuth told the Hartford Business Journal that “They say ‘you just took my margin down, split it with me,'” which indeed sounds like something a concert promoter would say.
The lesson here is: You can’t get blood from a stone, or much more money from a concert industry that has other options, especially when you’re a market like Columbus or Hartford that big-name acts can just skip if they aren’t feeling the profits. Though if you’re a concert promoter, you totally can try to get a state to cut your taxes to boost your profits by threatening to blacklist them. And if it seems like letting sports teams and promoters play states off against each other in a bidding war to the bottom is bad public policy, yeah, maybe Congress should have listened to David Minge.