Broke Arizona Town Wastes Nearly 10% of its Annual Budget Subsidizing Professional Hockey

But hey, Glendale, Arizona, at least you're a big-league city now! The Wall Street Journal adds up the grisly corporate-welfare math:

The city is obligated to make debt payments on the [city-built Jobing.com] arena that average $12.6 million a year. To keep the team afloat, moreover, the city has been paying a so-called "arena management fee" of nearly $25 million a year to the NHL, which three years ago bought the Coyotes out of bankruptcy.

The NHL has announced a tentative sale to a group headed by former San Jose Sharks executive Greg Jamison, under terms that would essentially institutionalize Glendale's commitments. Under the proposal that the NHL has laid out for city council members, the city would continue paying an arena-management fee that would average about $14.5 million a year.

On top of the city's average $12.6 million in debt service, that amounts to annual expenses of about $27.1 million—to be offset by anticipated Coyotes-related revenue of $14.2 million, according to projections by Glendale's city management department. That adds up to a projected annual loss for Glendale of $12.9 million.

By the time the new ownership deal ran its course in 2033, Glendale would have paid $271 million—nearly $1,200 for each of its 226,721 citizens—to keep the team.

These expenses outweigh Glendale's Coyotes-related revenue by such a degree that Moody's has downgraded the city's bond rating twice in the last 18 months, citing the city's ongoing hockey payments. In part due to the Coyotes, the city's reserve fund has fallen to $11.7 million from $72.5 million six years ago. Facing a projected $35 million budget gap—in a city whose general revenue funds in the most recent fiscal year amounted to $142.6 million—Glendale is proposing to raise its property and sales tax rates, while slashing library hours and hiking fees for city services.

I will not believe that governments have "cut to the bone" until I look across the land and see no more stories like this.

Link via the Twitter feed of Steve Chapman. Readers may recall that one of the Coyotes' biggest booster-socialists is Sen. John McCain.

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  • ||

    But, but, old people dying in the streets. Minorities being harassed. Children eating other children.

  • ||

    so that's the circuses part taken care of - now what about the bread...

  • ||

    um... food stamps?

  • JW||

    Artisinal bread?

  • Nephilium||

    Only if it's gluten-free.

  • Loki||

    I know in college sports the only ones that actually tend to make money are football and men's basketball. Has anyone ever done any studies of which professional sports (if any) actually break even for the cities that subsidize them?

  • wareagle||

    not sure about making money for the cities, but the NFL is pretty good at making money for itself and its owners. It has become the gold standard for how to run a league, displacing the NBA which had some success with globalization but also saw this season begin with labor trouble. My guess is Dallas is the money-making list. I don't think Jerry Jones asked anyone else to build the stadium and, in that case, it may not matter. It sells out for Cowboys' games, some college matchups, high school playoffs, concerts, etc. I could be wrong, but I think it's Jerry's house, not the state's.

  • ||

    Jerry got the city of arlington to pony up about half of the billion dollars it cost to build.

  • Invisible Finger||

    Funny how tax revenue from the increases to get the stadium built are exceeding projections. If it's making money, the taxpayers should demand a reduction in those tax increases.

    Funny how "profit" is a 4-letter word for private corporations but a goal for governments. How did we get so back-asswards?

  • wareagle||

    I should have looked that up. Don't know why I was under the impression that Jerry did not go that route. Thanks.

  • ||

    In fact there was a huge fight here when the stadium was proposed, because a lot of folks wanted the thing to finally be situated in Dallas, instead of the mid-cities.

    Jerry's plan was to tear down the old Cotton Bowl and rebuild the site with Jerry-World, but the mayor of Dallas at the time (Laura Miller I believe, but don't quote me on that) wouldn't pony up the tax dough.

    And she's vilified to this day for "losing" the stadium to Arlington.

  • Spoonman.||

    And that's why Laura Miller was awesome, along with her general no-bullshit attitude.

    They also tore down a lower-middle-class neighborhood via eminent domain to build the thing, IIRC.

  • Ken Shultz||

    Jerry got the city of arlington to pony up about half of the billion dollars it cost to build.

    Incidentally, this is another reason why the Redskins are superior to the Cowboys.

    My understanding is that Jack Kent Cook paid for FedEx field himself. There may have been some roadwork for traffic that needed to be accommodated around the site, but Jack Kent Cook always paid for building his own stadiums. He built the Forum in LA the same way--all by himself--too.

    ...he thought it was awful to crank up the taxes on his fans.

  • The Craig||

    FedEx is also a shitty place to watch a game. Just sayin'

  • juris imprudent||

    fyi and of no particular relevance, JKC was a Canuck and a tough-as-nails businessman.

  • R C Dean||

    Has anyone ever done any studies of which professional sports (if any) actually break even for the cities that subsidize them?

    There have been innumerable studies showing that big tax-financed stadiums are losers for the public.

  • Loki||

    I kind of figured the answer would most likely be "none". Of course it doesn't help that it seems every 10 years or so team owners are demanding a new stadium to replace their "outdated" ten year old stadium.

  • Invisible Finger||

    People should contrast the WSJ article, which is mostly just dollar-figure facts, with this load of socialist malarkey that passes for reporting via ESPN/AP.

    http://espn.go.com/nhl/story/_.....yotes-deal

  • ||

    Yeah ESPN was cheer-leading the Vikings corporate welfare as well.

  • affenkopf||

    Unfortunately every site covering the NFL was.

  • Invisible Finger||

    I'll also add that the Coyotes are rumored to be selling in the neighborhood of 170 million, which is 40 million MORE than the St. Louis Blues just sold for.

    which tells me the NHL is flat-out lying about the Coyotes actual purchase price and probably includes all sorts of already-accounted for remuneration to the 29 teams that already jointly own the 'Yotes.

    The supply of NHL teams for sale exceeds the demand.

  • Restoras||

    The supply of NHL teams for sale exceeds the demand

    I love hockey but this is 100% true. The NHL needs to lose at least 4 franchises.

  • BakedPenguin||

    Also, while pimping for unwanted franchises in Arizona, Florida & Carolina while letting places like Minneapolis & Winnipeg - who would have killed for a team - twist in the wind, Gary Bettman deserves to spend his time in hell trying to sell hockey franchises in Sub-Saharan Africa.

  • Invisible Finger||

    As much as I hate Gary Bettman, a lot of the decisions were the result of Greenspan bubble-nomics. It's not like Bettman was the only idiot thinking the trends were never going to end.

    But all that expansion was knee-jerk reaction to IHL expansion. The idiots in charge at the NHL actually thought that league was a threat!

  • Almanian's Evil Twin||

    Go Team!

    All I can say is, "WOW!" Unbelievable Totally believable

  • Ken Shultz||

    See, the great thing about having a city finance your business is that private investors? Not only do private investors expect a return on their investment--they expect you to return their initial investment, too!

    I know! They're really selfish.

    It's a good thing the government isn't selfish that way.

    That's why it's important to move as much of our economy as possible from the private sector to the public sector. Because you're taking money away from selfish individuals and companies, and giving it to be spent by unselfish governments!

    Right? I mean, an area like greater metropolitan Phoenix, which was imploding economically just a little while ago, has no business whatsoever spending $12.9 million a year of their taxpayer's money on a hockey team.

    ...but the city can do that because they're not selfish!

  • sarcasmic||

    It's easy to be unselfish with other people's money.

  • Ken Shultz||

    What's the difference between your money and other people's money?

    I'll tell you: a selfish attitude.

    You should be ashamed of yourself if you notice any difference at all.

  • Ken Shultz||

    Just for the record, that was supposed to be hilarious.

  • juris imprudent||

    Dammit Ken, I was laughing my ass off until you said that.

  • Pope Jimbo||

    The insult that is tacked on to the injury is when the sports nuts gush about how great the new stadium is.

    Of course it is great! If you gave me a bunch of other people's money to remodel my house, I'd have a kick ass wet bar in my basement.

    Since the Twins opened their new boondoggle Target Field, we have been subjected to all sorts of "This is teh greatest field ever".

    I expect more of the same now that the Vikes have screwed us out more money.

  • ||

    Besides, everybody knows that the only good teams are Canadian.

    /pandering to our resident canuckistanians.

  • ||

    lol.... Two of seven made the playoffs.

    Our petro dollar is helping CDN teams bottom lines. Wasn't too long ago that all the teams were begging for gov handouts to keep afloat [except Toronto/Montreal]

    Hopefully the Goldwater people can ensure that taxpayers at least get lubed a little....

  • Ken Shultz||

    Incidentally, the Canadian teams are mostly sitting at the bottom of the league.

    Our resident canuckistanians might console themselves with the fact that even the American teams that are doing well, are mostly doing well with Canadian players.

    I think it's pretty close to a demonstrated fact that making it through the playoffs and winning the cup requires a team to play the Canadian style of hockey*. If there's any doubt about that, ask any random Canucks fans why they lost with the Sedins.

    ...well, listen to what they say after they stop complaining about the refs.

    *Even Ovechkin's playing like a Canadian now.

  • Gladstone||

    The NHL has always been dominated by Canadian players, even though the majority of teams have been American since 1926. uUtil the 20 years like 90% of the players were Canadians, now it is around 50%.

  • Gladstone||

    Erm...Until the 20 years ago like 90% of the players were Canadians, now it is around 50%.

  • rts||

    This Canadian is a Bruins fan.

  • Ken Shultz||

    Is that becasue you're also a Leafs fan and, thus, a Habs-hater?

    Because that isn't exactly the same thing as being a Bruins fan.

  • ||

    That arena was built in the wrong place. The situation is like a dude that won't ditch his sports car cause he put so much money onto it already.

    Good money after bad.

  • Ken Shultz||

    That arena was built in the wrong place.

    You're saying it should have been in Scottsdale rather than Glendale?

    Or You're saying it shouldn't have been in the Arizona desert in the first place?

  • ||

    Both.

    The NHL wants a nation wide presence for TV, so fine, have a team in Scottsdale, where the team was somewhat less unsuccessful than it is in Glendale.

    But the NHL should be subsidizing the team, not the taxpayers.

  • Ken Shultz||

    Cooke had been told that there were more than three hundred thousand former Canadians living within a three-hour drive of Los Angeles, and remarked, "Now I know why they left Canada: They hate hockey!" Cooke sold the Forum, Kings and Lakers in 1979 to Dr. Jerry Buss.

    http://en.wikipedia.org/wiki/J.....eles_Kings

    Even before you could watch away games of your favorite team online, just because there were a lot of snow bird Canadians that came to your part of the world? That didn't mean they'd root for whatever team happened to be playing there.

    Habs fans don't morph into Kings or Coyotes fans just because they come to LA or Phoenix. They'll come watch the Coyotes play the Habs--and root for the Habs. And all the other Canadian fans are like that, too. They already have a team.

    And they can watch their team play online.

  • ||

    lol, thats a good line from Cooke.

    If more fans were like leaf fans maybe the transplanted fan thing would work.

    Leaf fans have to have dual loyalties due to the ineptitude of their team....

  • Invisible Finger||

    Cooke was right. Expand into a market where people are moving primarily for job reasons rather than lifestyle reasons. LA, Phoenix, Florida... most Northerners move there for lifestyle reasons first and job reasons second. People moved to Atlanta for job reasons more than lifestyle. Naturally, the idiots at the NHL decide Atlanta is the one market they sacrifice.

  • Ken Shultz||

    I think TV revenue is getting to be less important with NHL Center Ice all the time, too. Paying to watch games online or by way of Direct TV has got to be becoming more important as a revenue stream.

    What's better? Charging advertisers to show me commercials? Or having me send the NHL $150 a year so I can watch the games I want? They can sell their own advertising, too, when they're serving the games online. They haven't really started tapping into that yet.

    It's like how ticket prices became less of a factor after the salary cap. If your TV revenue is coming from subscription services... If you're not going to need to rely on TV revenue as much in the future, then maybe having a presence in a big city like Atlanta isn't as important as it used to be.

  • wareagle||

    please. The football stadium was built in Glendale and folks have no problem finding it. Unless you're saying that "wrong place" means anywhere in the Phoenix metro.

  • ||

    Assuming Football and Hockey markets in Arizona are the same?

    "ain't the same fucking ballpark. It ain't the same league. It ain't even the same fucking sport."

  • wareagle||

    all I can think of with hockey is a belief that the metro's growth was fueled by transplants from hockey areas. Agree with your earlier comment that this should not be the taxpayers' problem.

  • Ken Shultz||

    Should be a great series against the Kings.

    If the Caps beat the Rangers again (and I think the Rangers have gotten lucky twice), I don't think New Jersey has much hope against the Capitals--not the way the Caps are playing.

    The Devils match up with the Rangers better.

    Kings vs. Caps would be a great cup series. Also would be my two favorite teams goin' against each other.

    For what it's worth, I remember when everybody use to tell me as a kid that the Caps weren't going to make it as an expansion franchise either. If hockey can do well enough in Dallas, Tampa Bay, Carolina, Los Angeles, it can do just fine in greater Phoenix, too.

    Phoenix just had a really hard stretch when the economy imploded.

  • Ken Shultz||

    Oh, and I don't mean to start a conflict here, but Canadian fans can really hold a grudge when they lose a team.

    If the Coyotes had moved from Hartford to Phoenix, they probably wouldn't have batted an eye. But they came from Winnipeg...

    Winnipeg getting a team back helps, but they're always gonna resent the hell out of you for where you came from. ...like modern Islamists talking about the reconquest of Spain.

    It's never gonna sit well. Now they hate your team because it hasn't moved to Quebec and become the new Nordiques.

  • ||

    I like watching the Kings, hope they make it to the finals. I think the Devils beat Caps or Rangers, but then lose to the Kings.

    Carter Richards Party Power!

  • Red Rocks Rockin||

    The football stadium was built in Glendale and folks have no problem finding it.

    Most guys won't have a problem finding a stadium whose nickname is The Pink Taco.

  • ||

    The only right place would have been wherever a private company would have been willing to fund the goddamn thing.

    I think a better location physically would have been on the salt river reservation right next to the casino.

  • Ken Shultz||

    I know all the leagues are worried about bringing a bunch of highly paid, young players to Vegas, but they could put a rink in one of the hotels in Vegas, easy.

    Then, you don't even have to make a profit on just TV revenue and ticket sales, the "stadium" or casino is making money off of its other operations.

    I think it would be a problem for a team to be owned by an entity that was also operating a sports book. If you're operating a team, I don't think you should also be taking bets on the outcome of that team's games.

    But if the team isn't owned by the casino, rather it just has an agreement with the casino--just like a Cirque de Soleil show--that shouldn't be a problem.

    Vegas could totally support a team.

  • RPR2||

    they should call it Ice Town.

  • DJF||

    If you go to the city's web site the first item on their 'new and events' is about the hockey team, the second item is a notice about raising sales tax, property tax and business fees.

    I wonder if anyone see how the two are connected?

    http://www.glendaleaz.com/

  • mybarber||

    This is one of the reasons I have no use for pro or collage football,basketball baseball ect.The NCAA uses low paid help to run their minor leagues and the NFL has contracts that only bind the playere,sucks money from the taxpayers and takes little blame for the life long health problems of their contract workers.The NCAA doesn't evern pay employmet taxes on their workere

  • wareagle||

    the NCAA would say it gives players the ability to get a college degree, something a good many of them would never get a chance to do absent their athletic ability. That said, college athletics is a job unto itself; the demands on time are huge, almost to the point that majoring in a serious subject is tough except for the brightest of guys.

    I still love the college game, football that is, for all its faults. Like it much better than the NFL but that has as much to do with my upbringing as anything else. When you can practically see the light towers from your front yard, you either hate the game or love it. I don't love it as much but doubt I'll ever hate it.

  • Pro Libertate||

    The Coyotes should sign Putin. Major goal-scoring threat.

  • daveInAustin||

    But wait, Glendale has hockey, and they are hosting a Superbowl. With the return on all that investment, how can Glendale have any financial problems? Does this mean Austin's Formula 1 subsidy might not be such a good "investment" either?

  • affenkopf||

    Great that you mention it. No one is better at getting tax dollars to pay for his sport than Bernie Ecclestone (but I still love watching it).

  • Tim||

    The John McCain photo is pretty good but you should have gone with the kid hanging from mom's tit again.

  • Sevo||

    OK, guys, one cheer for San Francisco!
    Through some thoroughly inept (can it be otherwise) political shenanigans, SF "lost" the 49ers to Santa Clara!
    So I don't have to pay for the York family playpen!
    How about THAT?!

  • Paul.||

    Why don't we just go full Soviet and turn pro sports teams into 'national' teams and socialize the whole damn thing?

    All the stadiums will be named after sitting politicians, each city will have a 'city team', the players make $400 a week (remember, it's not the money, it's the love of the game, right?) and the tickets will be subsidized just like high speed rail.

  • jgold1957||

    Glendale was really stupid! I live in Scottdale. Back the early 2000's the Coyotes were trying to convince Scottsale to subsidize the stadium at Los Arcos mall.

    The talks were stalled because the Scottdale council members couldn't get current financial information or guarantees from the team owners. The city of Glendale jumped in and said "we'll build you a stadium" and they did.

    I was glad because I live in Scottsdale and didn't want my tax dollars going to a private company.

  • ||

    Now this picture is funny because Quebec city expected to buy the Coyotes for it's own subsidised arena. And you know the rivalities between the Nordiques and the Canadians.

    So don't worry Phoenix, Quebec is on the way to take your losses !

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