If Bridgestone Arena does well in regard to ticket and food sales, the Nashville Predators do well. So does the city of Nashville. So what is the big deal about state tax from non-hockey events at the Arena being available to the Predators?
This week News Channel 5 lead investigator Phil Williams claims to have uncovered a financial scandal involving the Predators collecting millions in tax payers dollars.
Williams reported that a law passed in 2009 diverted state and local sales taxes from non-hockey events at the arena to the Conventions and Visitors Bureau to be spent as seen fit by the Predators.
The team clarified that the city of Nashville actually retains the local sales taxes from Arena events. Furthermore, Predators COO Sean Henry points out that the Arena is collecting taxes that are generated as a result of events they pull in. In other words, new tax dollars, not old taxes.
“They are giving away newly created dollars within the building, the state portion, while the city enjoys what’s newly created,” Henry said, explaining that the more activity created in the building means the more money that is spent outside the building, again generating new tax dollars for the city and the state.
According to Williams, when the Predators were asked to provide documentation as to what they would be doing with the funds, the arena managers and team officials decided that the team would be paid an inconvenience fee for lost revenue due to events being booked on Saturday nights, typically well attended home games for Nashville.
Henry explains that the team has to submit dates in November to the League for what nights they will be able to have games the following season. While the NHL season comes out at the end of June, those dates are held. Henry says the dates are chosen in a way that allows the Arena to host concerts on key nights for concert-goers, especially Friday nights and during holidays such as New Year’s Eve.
For this season, the team even submitted they would be available to play 5 Monday games, a night that is typically poorly attended at the Arena. “It would be a lot easier to submit 20 Fridays,” Henry said, but explained that they try to leave Friday open all season long for concert bookings.
“I know the Garth Brooks concert was like a gotcha, but it is just the opposite. It is a great example of how aggressive we are with the forethought of the schedule,” Henry explained, adding, “we leave those free so we can be aggressive in our booking.”
One of the busiest Arenas in both the United States and the world, a busy Bridgestone Arena means a busy downtown Nashville. The policy is as much an investment in downtown Nashville as it is helpful to the Predators organization.
Furthermore, Metro Nashville actually owns the facility and owes an annual operating and management fee to Bridgestone Arena and the Nashville Predators for running the facility year around. It is a subsidy that would be required even if the Predators did not play in Bridgestone Arena.
Williams further reports the same law that allowed for the sales tax of non-hockey events to be collected by the Predators also set up a privilege tax on all NHL players which has generated $9.4 million.
News Channel 5 fails to mention the luxury tax is also paid by all NBA players who play in Memphis, not only players of the Grizzlies but all visiting teams too. Players must pay $2500 per game up to three games.
The tax would not exist if professional hockey and basketball were not being played in the state. If the Predators left, so would that source of tax revenue that Williams claims is unfairly being left available to the team.
Henry says that the incentives are working and points out just how busy Bridgestone Arena is today, having just been nominated for the 2011 Pollstar Concert Industry Arena of the Year Award, its fifth consecutive nomination
“The incentives are working on both sides. That is something we are proud of. This is working and it is working well. We are about to celebrate our 15th anniversary as a building. If you think back to what this area looked like 16 years ago before the building went up, it speaks for itself the economic impact of this building,” Henry said.