05
Apr
12

“Too big to fail” and another case of corporate welfare

In this case it’s the Phoenix Coyotes that’re being propped up at the expense of the ninety-nine percent:

Years ago a town of about 250,000 people committed about $200 million in taxpayer money to build a stadium for a professional ice hockey team, to attract it away from Scottsdale or downtown Phoenix to what is frankly the ass-end of the metropolitan area  (I have no problems with the west side of town, but from a geographic, demographic, and economic logic standpoint this was roughly equivalent to moving the LA Lakers to Riverside or San Bernardino).

For some weird reason, moving an ice hockey team to the desert with no base of hockey fans and locating it a good 45 minutes from the wealthier parts of town caused the team to go bankrupt.

[…]

The league, which purchased the Phoenix Coyotes at a bankruptcy court auction in 2009, has been managing the team and city-owned arena until an owner willing to keep the team in Glendale can be found. The city paid $25 million to the NHL during the 2010-11 season and pledged another $25 million for the current season, which is expected to come due in May.

To fulfill that pledge, the city put $20 million in escrow and still needs to come up with $5 million.

The hefty payouts have nearly drained the city’s reserves, leading to a recent drop in the city’s bond rating.

And the city is looking at a deficit next fiscal year that one councilwoman has estimated could reach $30 million. A possible sales-tax hike, furloughs and program cuts are on the table to close the spending gap….

That’s just special.

Public spending on pro sports is about as frivolous an expense and as regressive a transfer as you can possibly get.  I’m all for pro sports, but if it’s such a wonderful thing we ought to be able to get sports fans to pay for it directly, rather than by taking the cost out of everyone’s property taxes.  #Occupy should’ve been camping out in front of stadia, not banks.

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3 Responses to ““Too big to fail” and another case of corporate welfare”


  1. April 5, 2012 at 11:47

    It’s all about the Bread and Circuses!
    The OWS crowd want our bread, and the gummint gives them circuses to keep them entertained.
    EVERY TIME I hear that Los Angeles is going to pay for a new stadium/arena/play pen for some “professional” sports team, I go ballistic.
    The NFL wants a new stadium? Let THEM pay for it.

  2. 2 kbiel
    April 5, 2012 at 17:15

    I’ve come to believe that most of these city councils are just playing SimCity with real money.


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