When the National Hockey League decided to postpone all games until the COVID-19 pandemic passes, no one credible questioned the decision.
Cancelling large gatherings is one of the most effective means of slowing the transmission of a highly communicable disease.
The owners of the Winnipeg Jets, however, spent the past weekend getting lambasted on social media for a decision not to pay part-time and casual arena workers for income lost due to the postponement of the four remaining home games slated be played this season.
“Those people are on part-time agreements,” True North Sports and Entertainment chair Mark Chipman told reporters at a press conference on Thursday. “They work when we work. So, regrettably, to the extent that we’re not putting on shows and games, those people obviously would not have a call to work.”
On the surface, that was a logical statement. If and when the NHL resumes play, those workers would have been paid.
There are untold thousands of part-time workers in Winnipeg and around the world who will lose out on some or all of their income as a result of a pandemic that is already hammering the economy and causing financial hardship.
But the Jets were in the minority among Canadian NHL teams when it came to that part-time decision. This led to significant enmity toward True North, which is owned by Winnipeg’s Chipman and Toronto billionaire David Thomson.
“This is evil, plain and simple. The team is owned by two of the richest people [in] Canada and enjoys millions of $$ in government support,” tweeted Corey Shefman, a Toronto lawyer originally from Winnipeg.
“Any Jets fan that ever yells ‘True North’ again during their national anthem is a total doofus,” tweeted Adam Gretz, who writes about the NHL for NBC Sports.
By Sunday night, True North reversed its decision and issued a mea culpa.
“We sincerely apologize for any concern that our original position may have caused,” Chipman and True North president John Olfert said via email to its workers.
“We wish you and your families all the very best as we navigate these unique and challenging circumstances.”
Private team, public funding
For the better part of nine NHL seasons, it appeared True North could do no wrong in Winnipeg. There seemed to be an endless amount goodwill afforded to the company after it brought the National Hockey League back to Manitoba in 2011.
Those warm and fuzzy feelings evaporated to some degree this season, thanks to the Dustin Byfuglien suspension, the dissatisfaction of some fans with the atmosphere at Bell MTS Place and perhaps the performance of the team itself.
That annoyance turned into actual anger over the weekend, possibly fuelled by the fact the Jets benefit from government assistance.
It’s worth delving into the precise nature of this help, because not all of it involves money that would otherwise be fattening up the public purse.
This year, True North Sports and Entertainment is in line to receive $14.8 million worth of government assistance in the form of gaming revenue, a property tax break and a pair of tax refunds.
The largest chunk of this revenue would not exist without True North’s operations, which include the Winnipeg Jets, the Manitoba Moose and Bell MTS Place.
According to City of Winnipeg’s proposed budget for 2020, True North will receive an $8.1-million entertainment tax refund. This money comes from the taxes added onto tickets for events at Bell MTS Place.
The city’s support, in this case, lies solely in allowing True North to add what is essentially a surcharge on to its tickets.
Jets get gaming revenue
True North also receives revenue from 140 gaming machines at the Shark Club in Cityplace mall. Precisely how much has never been disclosed, but it’s estimated to be an average of $5.5 million a year, based on a funding formula worked out with what was then Manitoba Liquor and Lotteries when Greg Selinger’s NDP was in power in Manitoba.
Under the terms of the deal, if the Shark Club generates less than $6.1 million a year in gaming revenue, True North gets to keep 90 per cent of that money, which works out to a maximum of $5.49 million.
If Shark Club revenue ends up between $6.1 million and $7.3 million, True North receives a flat payout of $5.5 million. And if the club’s machines generate more than $7.3 million, True North gets to keep 75 per cent of the first $7.3 million — which works out to $5.48 million — plus 20 per cent of any revenue beyond $7.3 million.
Manitoba Liquor and Lotteries keeps the rest of the cash under all three scenarios.
True North also receives an estimated $931,000 break on city and provincial property taxes. Provincial legislation allows Bell MTS Place to be considered recreational property for tax purposes, rather than commercial property.
That allows tax assessors to portion most of the building at 10 per cent of its assessed value, rather than 65 per cent.
Finally, True North is in line for a $242,000 business tax refund, according to the city budget. That’s down from 2019, when the refund was worth $249,000.
Squaring up capital support
In addition to this operating support, True North also receives capital assistance in its real-estate development projects. The company’s real-estate arm is in line for up to $17.2 million worth of rebates on city and provincial property taxes it pays on the first two towers at True North Square.
These rebates however, are much like the entertainment tax rebates: They would not exist if those towers were not built. The theory behind this sort of development stimulus is to reward developers for improving properties they would not have improved without the stimulus.
Since the first two towers stand on what used to be a parking lot, an argument could be made that the stimulus is worth it. So could the opposite argument: That governments should not pick winners and losers in the development world.
Blue Bombers bag $1.3M
On the operating funding side, True North is not alone in receiving government assistance.
The Winnipeg Football Club will receive $1.1 million in entertainment tax refunds this year from the city and does not pay property taxes for Investors Group Field because the building sits on University of Manitoba land.
The Winnipeg Blue Bombers also don’t pay business taxes because the football club is a non-profit organization. It is not, as the club used to claim, a community-owned team.
The Bombers also receive a subsidy from Winnipeg Transit in the form of extra service for 10 home games. In 2019, that worked out to $181,000, according to a report to council’s public works committee.
Goldeyes get $367K
The Winnipeg Goldeyes also receive some help: A $325,000 entertainment tax refund and a $42,000 rebate on the municipal property taxes applied to Shaw Park.
Governments use several rationales for supporting professional sport.
Professional sports are an economic multiplier for a number of industries, most notably hospitality and tourism. That economic activity, in turn, provides the province and Ottawa with tax revenue.
Teams also improve a city’s quality of life for people who enjoy the sports in question. A Winnipeg winter without hockey, for example, was unimaginable to many fans before the COVID-19 pandemic came along.
It can be tough to separate the identity of a city from its professional sports institutions — and this relationship is even more intense in Winnipeg, where pro sports play an outsized role.
This may explain the anger expressed toward True North over the pay for the part-time workers. Winnipeggers tend to feel a sort of ownership over the club and may expect to find their values reflected in the way it relates to the community, especially during a time of crisis.
The Sunday evening apology — and the decision to pay workers for cancelled and future games — could go a long way toward improving that relationship. The need for repair appears to be remarkable in and of itself, given True North’s infallible image in the past.
True North Sports & Entertainment
- Total 2020 operating subsidies/public funding: $14.78 million.
- Entertainment tax refund (city): $8.1 million.
- Gaming revenue, estimated (province): $5.5 million.
- Property tax break, estimated (city and province): $931,000.
- Business tax refund (city): $242,000.
Winnipeg Football Club
- Calculable total 2020 subsidies/public funding: $1.3 million.
- Entertainment tax refund (city): $1.115 million.
- Winnipeg Transit subsidy (city): $181,000
- Property tax exemption (city, province): No taxes on U of M-owned land.
- Business tax exemption (city): No taxes for non-profit organization.
- Total 2019 subsidies/public funding: $367,000.
- Entertainment tax refund (city): $325,000.
- Property tax rebate (city): $42,000.
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