Preds Squeeze More Tax Dollars Than City Intended

Preds Squeeze More Tax Dollars Than City Intended

CREATED Nov 21, 2011

By Phil Williams
Chief Investigative Reporter

NASHVILLE, Tenn. -- NewsChannel has uncovered serious new questions about how the Nashville Predators got an extra $4 million of your money.

And get this: the city never knew what they were up to.

That money comes on top of millions of taxpayer dollars that the Predators already get every year.

"I think, you know, that they got a sweet deal passed through the legislature," said Butch Spyridon, president of the Nashville Conventions and Visitors Bureau.

Spyridon said he unknowingly became a player in the Predators' quest to squeeze more money out of taxpayers. "My sense is the city didn't even know when they were passing the legislation."

So NewsChannel 5 Investigates asked Metro Finance Director Rich Riebeling, "Was this a surprise to the Dean administration?"

"Yes," he answered.

Three years ago, Nashville Mayor Karl Dean responded to threats by the Predators to leave town by pushing a lucrative new taxpayer-funded deal through the Metro Council.

According to Metro Council documents, it included $170,000 in new concessions revenue, a $750,000 break on the Predators' rent, $2 million to manage the arena, plus another $2 million incentive fee. That's on top of millions that the Predators already received off other parts of its deal at the taxpayer-funded arena.

"You envisioned a limit to the amount of taxpayer funding?" we asked Riebeling.

"Yes, sir," he said. "No question on that. That's correct. That was the deal that was written on those documents is what was envisioned."

But the Predators new contract also included a section that few really understood, letting them keep all funds received from the Nashville Conventions and Visitors Bureau.  

Still, when NewsChannel 5 Investigates filed a public records request for all documents relating to those funds, the Predators responded that there were "no documents."

"Well, I gave you documentation that we had paid them," Spyridon said. "So, obviously, I would have a point of disagreement with that answer."

In fact, our investigation discovered that, after the Predators cut that deal with the city, they got someone here on Capitol Hill to insert language into a tax bill. It diverted state and local sales taxes from all non-hockey games at the arena -- concerts, for example -- to the CVB to be spent at the direction of the Predators.

"Is it fair to say that this was sort of an end run around the Dean administration?"
NewsChannel 5 Investigates asked the Metro finance director.

"I'm not sure how I would characterize it," Riebeling said, adding: "This is was not something that we were a party to the discussions on."

That's when Predators management came to Butch Spyridon wanting your tax money.

"When I learned of it, that's when I said this is way too much money for us to just write you a check," Spyridon recalled. "Even though it's a pass-through. We are going to have some documentation, and we are going to have some value for it."

So last spring, Predators officials sent Spyridon two invoices totaling almost $4 million, saying that team wanted to be paid because it had to "forgo its scheduling priority" to host some big events.

One of them: Garth Brooks' flood relief concerts last December.

"Garth Brooks came in well after the Predators was set?" we asked Spyridon.

"Absolutely," he answered.

"And Garth Brooks worked around the Predators schedule?"

"We did."

NewsChannel 5 Investigates then asked, "So when they send a bill saying that they had to give up their scheduling priority, that's not completely accurate, is it?"

"If that's what that says, then, yes, that's not accurate," the CVB president said.

The Predators also said the Women's SEC Tournament last March was a big inconvenience because they had to give up a lucrative Saturday game.

But we checked the schedule and the Preds played at home the next three Saturdays after the tournament. They also had three Saturdays the month before.

"Doesn't an NHL team have to play some away games?" we asked Spyridon.

"There are going to play some away games, absolutely," he acknowledged.

So why should taxpayers pay to use the city's arena when the Predators are playing away?

"I would say that would be a question for the people that wrote the state legislation," he insisted.

Those are questions that Metro's finance director said the city needs to ask. "We want to work with them. But, again, these are public dollars, they are tax dollars, and we need to make sure that it's done in a way that's the right thing to do."

The Predators also billed the CVB for some events where it accepted lower rents to use the arena. But that money does not appear to show up in financial reports to show how much rent they've collected. So even the Nashville Sports Authority did not know about this money.

As for the Garth Brooks concerts and the SEC women's tournament, those events were so lucrative that the team used them to collect that $2 million incentive fee.

Predators officials would not sit down and answer our specific questions. However, they sent NewsChannel 5 a statement, claiming that this deal benefits both the team and the city.

Here is the statement sent in response to our request to interview Predators President Sean Henry:

With regard to your first question, Sean is not in a position to address how the provision got passed in the state tax code as the provision was already in place prior to Sean joining the Predators/Bridgestone Arena organization.

As to your question about the validity of some of the items for which NCVB was billed, the team and building, under the direction of the new ownership group, have worked closely with the city and other entities such as the CVB to attract as many events and activities to Bridgestone Arena with the stated goal of making Bridgestone Arena the number one sports and entertainment facility in North America. To that end, Bridgestone Arena has just been nominated for Pollstar Magazine's Venue of the Year, largely due to the building's concert attendance and activity during the last year. A number of significant Bridgestone Arena events (CMA Awards Show, SEC Basketball, NCAA Basketball, etc.) occur because the Predators commit to being on the road for extended periods of time during the season. Being on the road for extended periods of time also means the Predators' home schedule is condensed, as right now the team is playing five home games in 11 nights as a result Bridgestone Arena being utilized for the CMA Awards Shows from October 30-November 11.

Relative to the Garth Brooks' concerts, the Predators only played one home game between December 16 and 23 last season, leaving Bridgestone Arena open for six traditionally strong dates to accommodate other events, ultimately allowing for nine Garth Brooks' shows, which raised significant funds for Nashville flood relief efforts.

As indicated earlier, we also value the benefit of bringing events such as the SEC Women's Tournament to Nashville, from national exposure to economic impact, but also because of the incentives that were put in place by the Mayor's office with the objective of driving more business and activity to the facility. Hosting such events, though, also requires the team to be out of town at those times. And while the NHL would not create a schedule in which a team never had an away game, the more available dates we can provide for the schedule-maker, the better a team's schedule will be, from both a date and competitive standpoint. The Predators do not expect to play at home every Saturday night, but certainly our fans have demonstrated that Saturday is their preferred day of week to attend games, so our goal is to deliver the best possible schedule each year for our team and our fans. So, any time the team has to be away/out of Bridgestone Arena on a prime night during our season, we have done so with a goal of benefiting the community with other events and because of the incentives that encourage additional event activity.