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Arguing against publicly funded arenas

Aug 4, 2011, 11:58 AM EDT

New York Islanders Fan Rally With Performance By Blue Oyster Cult Getty Images

Perhaps this might not be the case for New York Rangers and New Jersey Devils fans,* but most hockey fans probably feel a bit bad for New York Islanders fans right now. A lot can change between now and 2015 – when the team’s lease with the decrepit Nassau Coliseum finally expires – but engineering voting on a low turnout day still couldn’t nab public funding for Charles Wang’s new arena referendum. There have been a variety of escape routes discussed around the Internet, but the outlook appears to be pretty bleak for the Islanders’ chances of staying in Long Island.

That’s a shame, but the lukewarm response indicates that the Islanders aren’t important to enough people. That’s not to say that they are without hardcore fans and people nostalgic for the days of Mike Bossy, Bryan Trottier and Billy Smith. It’s just to say that memories haven’t been enough to gloss over a long span of losing and limited hope for significant change.

That being said, Arctic Ice Hockey makes a strong argument against public funding for arenas even if the Islanders did hold a stronger place in the heart of fans in the region. Let’s take a look at the four-point argument against public funding for arenas.

1. Economic studies show that the impact is minimal

The economic impact of sports teams on an area ranks as one of those arguments that are too complicated for sports writers. That’s why the author points to two studies (here and here) to back up that point. I don’t think many would argue that there is no impact at all, but those studies point to the fact that the benefits probably don’t outweigh the drawbacks in most (if not all) cases.

2. If it was a good investment to increase property value, owners would want to use all their own money.

The second one also rolls into Point 1: if building an arena in an area would make that area flourish so much, they wouldn’t a deep-pocketed businessman (like that team’s owner) want to jump on the opportunity?

3. Subsidies reward poor financial management

The funny thing about publicly funded arenas is that you don’t exactly see those lucky owners giving money back to the taxpayers. Maybe there are plans in which some kickback does take place (and not just based on the hypothetical increase in property values) but when owners don’t have to fork over their own money, one of their biggest costs is taken away. That allows them to continue to make the mistakes that probably got them in that predicament in the first place: spending their money on the wrong players or giving good players too much money.

4. If a team can’t survive in a market, it shouldn’t be there.

One other bitter pill to swallow in that failed referendum on Monday was the tepid turnout (and the fact that it was designed to take advantage of lower voting numbers). If you’re confident that a market couldn’t stand the idea of losing its team, wouldn’t you call on a vote at the busiest time possible?

Nassau Coliseum has been derided for its condition, but the bottom line is that sports fans will sit in uncomfortable seats (often with bad sight lines) if it means they get the chance to root for a good team. Maybe a new arena would help them earn more money from the tickets they sell, but the tenor of the arguments would be about maximizing profits rather than mere survival if the Islanders were a contender.

***

Ultimately, these arena deals often come down to leverage. Jerry Jones received plenty of help in building his absurd stadium because Arlington wanted to attract the Dallas Cowboys. The Pittsburgh Penguins got Consol Energy built because of Sidney Crosby and their image as a rising team. It would be a shame if the Islanders relocate, but right now, not enough people care to make something happen. That’s the sad bottom line.

* – Unless they’re worried that their teams won’t get to beat up on them anymore.

  1. goforthanddie - Aug 4, 2011 at 4:23 PM

    I can understand a city not wanting to spend on a new arena. I can’t understand LI not letting Wang pay for his own arena, that’s just stupidity in action.

  2. nhlbruins90 - Aug 5, 2011 at 11:20 PM

    Subsidies for professional sports teams is economic lunacy. The emotional attachment to the teams and the ‘glamor’ of professional sports give slick politicians an opportunity to bamboozle hardworking taxpayers.

    It’s also economic lunacy to give billions to failing industries in order to ‘save’ jobs, or build high-speed trains nobody wants for more billions, or pour billions into electric cars that nobody in his right mind would buy (less than 200 Volts sold this month), or spend hundreds of billions to bail out corrupt and incompetent big banks, or even to bail out people who took mortgages they couldn’t afford and create a disaster in the real estate industry. In fact, it’s economic lunacy to socialize the health care system and artificially drive up demand at the very time demand needs to be rationally curtailed via the marketplace. It’s also economic lunacy to subsidize the higher education industry and strap students with enormous loans they may never be able to pay off, only to wind up in a cubicle making a paltry salary with no benefits. It’s economic lunacy to borrow trillions of dollars from Chinese factory workers that you can’t possibly pay off. It’s lunacy to print money in the basement of the treasury thinking that’s the solution to our economic problems.

    The days of subsidizing sports in America are over. It’s almost comical that anyone would try. Tumble to it. It pains me to say it, but America is an economic basket-case, and the only solutions are bad and worse. We’re slowly going the way of France. Ouch, that hurt. The truth always does.

    Hockey players, I hope you know how lucky you are. Here’s a tip, stay light in US dollars and load up on the Looney. And keep your contracts short-term. That multi-million dollar deal today might look rather paltry in a few (inflated) years.

    Now, back to hockey news.

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