2016-2017 NHL Thread
- Thread starter Kin
- Start date
I say again and you can quote, I think $30 million or more is large. If the State and City eat $20 million a year and recoup $30 million plus that's a win isn't it?? But I doubt they are being asked for that little. I think they are asking for a tax area, so it's actually the public using the area who will pay back the State.
Nik the Trik said:
bustaheims
Active member
Bates said:
It's a very insignificant win, when you're talking about entities that are dealing with budgets in the 10s of billions, if not hundreds of billions. Coming out $10M ahead doesn't move the needle for them.
Kin
New member
Bates said:
That's the first time you've used a specific number, one that I think you'd agree you don't have a source for and are pulling out of the air, but you didn't say "30 million dollars is a lot of money". You said that the economic impact on the city and state is large.
Last year, the state of Arizona took in 14.3 billion dollars in gross tax revenues. Assuming that 30 million dollars is split evenly between the city and the state, the 15 million dollars the Coyotes contribute would represent .1% of statewide tax revenue.
.1% of anything will not have a significant impact on the total. It's a rounding error.
bustaheims
Active member
Bates said:
Sure. At which point, what's best is to take the path that requires the least amount of energy/has the lowest opportunity cost - which, in this case, is not building the stadium, and investing that money into more important things or things that could potentially bring in a more significant return.
The number is significant, the impact isn't. I picked a rough number bit I'd bet it would be a minimum. If every City and State was willing to ignore every industry providing them with $30 million a year well you can see where I'm going. And again I see no point in anyone building the Coyotes an arena on their own but if you're already building the Suns one in a few years adding another tenant makes sense for the City and the State.
Nik the Trik said:
I agree as I'm not actually petitioning for the building of an arena for the Coyotes. BUT the City and State will be building the Suns a new building in the next few years anyway so adding the Coyotes seems like the right move. Personally I'd let them walk. And that's both of them.
bustaheims said:
Kin
New member
Bates said:
Ok, you specifically said the opposite a little while ago.
Bates said:
Except it almost certainly isn't and, again, if you wanted to read the academic literature on the subject that's out there then, as the quoted professor said, there's virtual consensus on the issue.
There are two fundamental errors you're making when calculating the number. One, the largest, is that you're comparing the revenue the Coyotes generate with nothing. As I said though, if the Suns new arena had 40 more nights to host concerts some of that revenue generated would be there anyway. So the impact of the Coyotes isn't going to be the gross total of money spent on Coyotes games it's going to be the net of Coyotes games vs. an alternative.
Which leads to the second mistake which is the idea that if the Coyotes left, people wouldn't just channel money elsewhere in the economy. Maybe people would eat out more, maybe they'd see more movies. They'd still be generating sales tax, just not at the arena. When Sports teams leave towns people don't decide to just stop having fun. Like the article says, some places have lost sports teams and seen sales tax revenues increase rather than decrease.
You keep leaving out the State revenue from Income Tax from the team. That will not be replaced by concerts and neither will 40 nights of revenue, there just isn't that many extra events available for the building. Oddly you literature never dealt with it either, it's almost as if the for side overestimates and the against side under estimated the economic gain from sports teams.
Nik the Trik said:
Kin
New member
Bates said:
I didn't provide you with any literature on it. I linked to an article on it. When an economics professor says there's consensus on the lack of economic impact sports teams make, you can believe him or not but the choice to read on the subject matter is yours.
And I don't "keep leaving out" anything. I accepted your fanciful 30 million dollar figure as including state revenues. I just said the economic benefits of a sports teams aren't the gross revenues generated. You have to take into account replacement events(which even if we accept won't fully replace Coyotes revenue lessens the impact of that 30 million dollars further) and that the money people spend on recreation doesn't just stop being spent if a hockey team leaves town which makes the sales tax argument something of a canard.
As for the income tax number, state income tax in Arizona on income over 300k per year is 4.54%. That means that on a 70 million dollar payroll the maximum amount of statewide revenue would be in the neighbourhood of 3.2 to 3.3 million dollars a year.
However we all know that the Coyotes don't have a 70 million dollar payroll or anything close to it so even that is on the high side. Again, you're talking about a tiny, tiny fraction of a percent of a budget.
The economic impact of sports teams is negligible. There's really no way around that.
Not really, the financial success of the team or the arena really doesn't have any bearing on how much money goes into the economy of the City or the State. The Coyotes generate somewhere around $100 million a year, taxes collected on that figure would be heading towards $10 million for Govt. I personally don't think the Coyotes getting their own arena makes sense in any way but I see a case for subsidizing them in Glendale or including them in new Suns arena.
Nik the Trik said:
Kin
New member
Bates said:
That doesn't address anything I've said and the math doesn't make sense. You're getting a 10% tax rate based on what? And if tax revenue generated is based on a % of revenues, how would the team's financial success not increase that figure?
Either way this all seems to be moot. There's a reason most of these buildings aren't being built with 2 tenants these days. Unless a single entity owns both teams you're either asking one team to voluntarily not control their building, which most of them don't like, or you're asking them to sacrifice a significant amount of revenues/prime entertainment nights by housing a low-rent tenant.
Kin
New member
Bates said:
It depends on if you mean City or metro area. If you specifically mean a single entity city the answer to the best of my knowledge is none but the same can be said of arenas built in the last 15 years with multiple tenants and different owners.
Conversely if you look at what the Red Wings just did they worked out their own arena deal despite there being rumours that the Pistons want to move to downtown Detroit as well.
Arn
Active member
How did the Leafs end up in the ACC? It was sort of before my time, or the very beginning of my time following the sport, but wasn't the ACC initially designed only for basketball then the Leafs tagged on?
Which is why there's some seats in the upper bowl with horrendous views of the ice.
(Sorry this is slightly off what's being discussed but sort of relates to having to be in from the start on planning a new arena if you want both sports)
Which is why there's some seats in the upper bowl with horrendous views of the ice.
(Sorry this is slightly off what's being discussed but sort of relates to having to be in from the start on planning a new arena if you want both sports)
Kin
New member
Arn said:
Yeah, basically. When the city got the Raptors through the expansion process they immediately had to start looking into building a new arena as neither of the existing Toronto ones were good fits for Basketball(the Raptors actually played their first few seasons in the Skydome instead of the Gardens). The ACC was being designed as a building for the Raptors when the precursor to MLSE bought the Raptors and turned it into a multi-use venue. They never shared the building under separate owners.