I’ve never done much number crunching on the issue, but it seems sports teams are often the beneficiary of public welfare. Often it comes in the form of stadium subsidies. But there are other ways taxpayers can help sports owners out, as this deal between Nashville and the Predators illustrates:
[Team owner Craig] Leipold told The Tennessean the NHL team averaged about 13,500 in paid attendance for home games this season, which allows them to put the city on notice for next season.
If average paid attendance is below 14,000 next season, the Predators could ask Metro to buy enough tickets to boost the team to that level. If Metro chose not to buy the tickets, the Predators could pay the city an exit fee of about $18 million and leave Nashville.
That sounds like a sweet deal. The team, apparently, is guaranteed a certain level of ticket sales, regardless of its record. The taxpayers stand to lose here, what about the owner(s)? What is his risk? Come to think of it, how often do sports franchises go out of business?
Interesting aspect of this related to the NHL:
One reason the Predators might invoke the clause is that beginning next season, the NHL is requiring teams to reach 13,200 in paid attendance to qualify for the league’s full revenue-sharing package. Teams must average at least 14,000 in paid attendance in 2008-09 to qualify for full revenue-sharing benefits.
Seems the league may have over-expanded if it needs to enact attendance incentives. Or tickets simply cost too much for many fans. At any rate, I’m not sure how this requirement helps improve the NHL’s competitive balance if the league limits revenue sharing to teams that are already struggling.