City and province to provide Winnipeg pro sports with $16.6M this year
Investment in Jets, Bombers and Goldeyes worth it, Economic Development Winnipeg says
Winnipeg's professional sports clubs are in line for about $16.6 million of government assistance this year in the form of gaming revenue, tax breaks, tax refunds and tax exemptions.
City budget documents reveal a modest rise in combined municipal and provincial support for the Winnipeg Jets, Manitoba Moose, Winnipeg Blue Bombers and Winnipeg Goldeyes, mainly because of improved ticket sales at Bell MTS Place.
True North Sports & Entertainment, the company that owns the National Hockey League's Jets, American Hockey League's Moose and the teams' downtown hockey arena, is slated to receive an estimated $14.8 million in operating subsidies and other forms of public assistance in 2019. That's up from an estimated $14.1 million in 2018.
The public assistance this year is roughly equal to the combined salaries of Jets centre Mark Scheifele and his wingers Blake Wheeler and Patrik Laine, as well as goalie Connor Hellebuyck, accordingly to salary-tracking website capfriendly.com.
True North receives assistance through four separate mechanisms. The company is in line to receive an $8.1-million refund on the entertainment taxes it levies on tickets sold at Bell MTS Place — revenue that would not exist without the Jets, Moose and other events at the arena, such as concerts.
True North is also slated to receive a $249,000 city business tax refund and $931,000 worth of city and provincial property tax breaks on Bell MTS Place.
Provincial legislation allows the downtown arena 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.
Tax breaks and gaming revenue
True North also receives an estimated $5.5 million worth of revenue from 140 gaming machines at the Shark Club at Cityplace mall. That's the average expected revenue from a deal reached between True North and Manitoba Liquor & Lotteries under the former NDP government.
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. 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 & Lotteries keeps the rest of the cash under all three scenarios.
City benefits economically from pro sports
True North Sports & Entertainment vice-president Rob Wozny declined to comment on government assistance for the company that owns the Winnipeg Jets and Manitoba Moose.
"There's nothing to add to this story that we haven't said before, particularly last year," he said in a statement, referring to the spring when the Jets made a lengthy playoff run that included outdoor street parties in the blocks outside Bell MTS Place.
True North picked up half the $2.2-million tab for those parties, with various city departments absorbing the rest of those costs.
Economic Development Winnipeg president and CEO Dayna Spiring said the public expenditure on those parties more than paid for itself in terms of marketing Winnipeg to the rest of the continent through NBC and Hockey Night broadcasts.
The economic impact of the Jets, Moose, Bombers and Goldeyes more than justifies the municipal and provincial assistance for professional sports in Winnipeg, she added.
"We can't just look at what the cost is. You have to look at both sides at the balance sheet," Spiring said in an interview. "These teams have a significant impact on our city and what we're able to accomplish."
Support for Bombers drops
The Winnipeg Blue Bombers are in line to receive a $1.45-million entertainment tax rebate from the city this year. That's down from $1.85 million in 2018.
The drop is due to a reduction in ticket sales by the non-profit Winnipeg Football Club from 2016 to 2017, the most recent year documented in the club's financial statements.
The football club will publish its 2018 financial statements in April and will report a small decrease in ticket revenue due to poor weather last year, Bombers public relations director Darren Cameron said in a statement.
The Bombers also don't pay city business taxes or any property taxes on Investors Group Field, which sits on land owned by the University of Manitoba.
The club has been meeting its commitments to pay back a stadium-building loan of $75 million, plus interest, but the province no longer expects to recoup a separate $85-million component of the loan that was supposed to be financed by new developments at the old Canad Inns Stadium site.
Goldeyes receive slight boost
The Winnipeg Goldeyes, who play at Shaw Park in downtown Winnipeg, are set to receive $368,000 in public assistance this year, up from $342,000 last year.
The Fish are in line to receive a $325,000 entertainment tax rebate and a $43,000 city property tax grant.
Winnipeg Goldeyes chief financial officer Jason McRae-King declined to comment on government assistance for the baseball club, which is owned by former Winnipeg mayor Sam Katz.
True North Sports & Entertainment
- Total 2019 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): $249,000.
Winnipeg Football Club
- Calculable total 2019 subsidies/public funding: $1.45 million.
- Entertainment tax refund (city): $1.45 million.
- 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: $368,100.
- Entertainment tax refund (city): $325,000.
- Property tax grant (city): $43,100.
With files from Jacques Marcoux