NHL’S SCHEMES AND DREAMS
With Centre Vidéotron, as usual, taxpayers bankroll rich folks’ games
The Quebec politicians who funnelled close to $350 million of public money toward the construction of Quebec City’s new arena must be gratified that the project has lured NHL hockey back to the city.
It is just one game, an Oct. 4 pre-season game between the Boston Bruins and the Montreal Canadiens, but still: NHL hockey!
It will have to do, after last week’s dual announcement from the league that it was granting an expansion franchise to Las Vegas and also giving a firm pat on the shoulder to the Quebec capital. While saying it was quite pleased with the bid from Québecor for an NHL franchise, the league cited the weakened Canadian dollar and the fact that a Quebec City team would not help the league’s current East-West geographic imbalance as reasons for turning the expansion application down.
That last part seems like the kind of thing the NHL could have pointed out when it openly solicited expansion bids: did it just recently look at a map and figure out that Quebec City is way over there on the right of it?
And so, Quebec City becomes the new Kansas City, the town that will most frequently be mentioned as a relocation possibility when an NHL team runs into some kind of financial problem. And all for the low, low price of $330 million.
This would all be embarrassing enough for the politicians who agreed to pay for an arena, but new details about the financing arrangement are just the latest chapter in Why You Shouldn’t Use Public Money on an Arena, a work that gets updated with alarming frequency. It turns out that the city has to cover half of any operational deficit that the Centre Vidéotron incurs, because apparently the Québecor subsidiary that holds the lease on the arena didn’t want to be held responsible for actually turning a profit. Local media have reported that the arena lost almost $1.5-million in its first four months alone. If that rate of losses keeps up, the municipality will end up having to pay Québecor something in the neighbourhood of $2-million over a full year, which is pretty much what Québecor is paying the city in annual rent on the building. So that’s going well.
Is it likely that Centre Vidéotron will suddenly turn a profit? Outside of games for the junior hockey Quebec Remparts, the next event listed for the building after that Oct. 4 NHL exhibition is a concert on Nov. 21. And then, um, a hypnotist on Jan. 4. That is not a lot of events.
This is why wealthy sports owners, or in the case of Québecor, prospective sports owners, always want taxpayers to kick in a good chunk of the cost of building an arena: because they are a terrible business on their own.
Ironically for the residents of Quebec City, their best shot at digging out of the financial hole left by the new arena with no NHL team might come when an existing team starts haggling over an arena lease. The Arizona Coyotes aren’t quite at the haggle phase yet, but they are certain to be. That team has another year on the lease in Glendale, but it has already started searching for a new arena site after that municipality’s government eventually grew tired of subsidizing the hockey team’s operations. Arizona media reported last week that Coyotes owner Anthony LeBlanc had settled on a new location, though he wouldn’t say where. Previously, he had indicated the most likely location would be in the suburbs east of Phoenix. Somewhere in the hockey hotbeds of Tempe or Scottsdale, then.
Wherever they end up going, LeBlanc has already said that the Coyotes will need a pile of public money to make the arena happen, even while trying to pretend that the team is not asking for public money.
Here’s how he was quoted by Arizona Sports: “What we are going to be approaching this with is a concept of not looking for taxpayer dollars.” Hey, that sounds good! Finally, an owner who gets it. But then: “Are we looking for some form of refund of sales taxes generated? Perhaps, those are the preliminary discussions we had with the state legislature a couple of months ago.” Oh. Never mind. Pretending that tax revenue is not public money is a staple of the arenafunding scheme, right up there with sweetheart leases.
Maybe the Arizona legislature will figure this out, will realize that “new” taxes generated by an arena are taxes that would have previously been generated anyway, and will decide that it’s not that interested in granting hundreds of millions to the Coyotes to help them move from northwest of Phoenix to southeast of it.
So far, all parties are talking like arrangements are proceeding smoothly, but they always talk like that at this point, before the financials are worked out. So take heart, Quebec City. The first instance of having your new arena used for blackmail purposes could be mere months away.
And so, Quebec City becomes the new Kansas City, the town that will most frequently be mentioned as a relocation possibility.