Fact-Checking Latest Claims By Nashville Predators

Fact-Checking Latest Claims By Nashville Predators

CREATED Nov 26, 2011

Sean Henry, president of the Nashville Predators, declined to be interviewed by NewsChannel 5 Investigates for our stories that revealed how the team secured millions of dollars in extra taxpayer money -- after it signed a lucrative new lease with Metro.

However, on Friday, he provided a response in an interview with a pro-Preds blogger who describes herself as a "fan" who became "addicted to the Predators."

Below, we check the facts in that posting, "Predators contend agreement with state beneficial to Nashville."


CLAIM: "The team clarified that the city of Nashville actually retains the local sales taxes from Arena events."

FACT: As we reported, state and local sales taxes from non-hockey events go to the Nashville Conventions and Visitors Bureau to be spent at the direction of the Predators.

The Predators' own invoices claim funds collected under Tennessee Code Annotated 67-6-712(c)(1)(B).  That section of state law deals with local-option sales taxes.  

We asked the Metro Department of Finance.  They gave us a summary, which shows that the funds in question do include local sales taxes. To view that document, click here.

That is money directly out of Metro coffers.


CLAIM: "Furthermore, Predators COO Sean Henry points out that the Arena is collecting taxes that are generated as a result of events they pull in. In other words, new tax dollars, not old taxes. 'They are giving away newly created dollars within the building, the state portion, while the city enjoys what's newly created,' Henry said, explaining that the more activity created in the building means the more money that is spent outside the building, again generating new tax dollars for the city and the state."

FACT:  The statutes in question apply to state and local sales taxes collected on all events, not just new events.

In 2008, lawmakers directed that those taxes would go to the Nashville Sports Authority. Tennessee Revenue Commissioner Reagan Farr told a Senate committee that the money would be used "to retire the debt" of Nashville's arena. (See this Senate video at 1:00:47.)

As we reported, the 2009 legislation pushed by the Predators diverted money from Metro to the NCVB to be spent at the direction of the team for "current, expanded or new events."

That 2009 legislation took money away from Metro taxpayers.


CLAIM: "Henry says the dates are chosen in a way that allows the Arena to host concerts on key nights for concert-goers, especially Friday nights and during holidays such as New Year's Eve.... 'I know the Garth Brooks concert was like a gotcha, but it is just the opposite. It is a great example of how aggressive we are with the forethought of the schedule,' Henry explained, adding, 'we leave those free so we can be aggressive in our booking.'"

FACT:  As the Predators' own invoices note, the team's contract with the city gives it "priority" in scheduling games. It does not require them to set aside certain nights for non-hockey events. As we first reported, the Garth Brooks flood-relief concerts were booked well after the Predators' schedule was set.

This claim that taxpayers should compensate the Predators for not booking Friday nights at the Metro-owned facility is new.  

In fact, invoices submitted to the NCVB focus on the loss of Saturday nights. (See that specific reference here.)

Compare how the Predators stacked up against some other NHL team in December 2010, when team managers claim they had to "forego scheduling priority" for the Garth Brooks concerts.

December 2010 Home Schedules
Team # Home Games # Fri Games # Sat Games # Fri/Sat Games
Blue Jackets 9 1 3 4
Predators 7 0 3 3
Blues 10 1 2 3
Stars 9 2 1 3
Islanders 8 0 2 2
Capitals 8 0 2 2
Bruins 7 0 2 2
Kings 7 0 2 2
Canucks 7 0 2 2
Maple Leafs 7 0 2 2
Lightning 6 0 2 2
Flames 7 1 1 2
Hurricanes 4 1 1 2
Panthers 5 2 0 2
Sharks 5 0 1 1
Avalanche 6 1 0 1

In addition, as arena manager, the Predators profit off those non-hockey events.  For example, the organization used revenues for the Garth Brooks flood-relief concerts in calculating its $2 million incentive fee.


CLAIM: "Furthermore, Metro Nashville actually owns the facility and owes an annual operating and management fee to Bridgestone Arena and the Nashville Predators for running the facility year around. It is a subsidy that would be required even if the Predators did not play in Bridgestone Arena."

FACT:  In 2008, Mayor Karl Dean entered into a new lease arrangement -- which was approved by the Metro Council -- included a $2 million management fee, plus a $2 million incentive for events booked at the arena. That agreement capped the taxpayer liability.

Lobbyists for the Predators pushed these measures through the legislature after it had signed that agreement with the city. That legislation has not reduced the cost to Metro taxpayers.


CLAIM: "Williams further reports the same law that allowed for the sales tax of non-hockey events to be collected by the Predators also set up a privilege tax on all NHL players which has generated $9.4 million.... The tax would not exist if professional hockey and basketball were not being played in the state. If the Predators left, so would that source of tax revenue that Williams claims is unfairly being left available to the team."

FACT:  NewsChannel 5 never reported that the privilege tax generated $9.4 million.  That figure reflects the total amount generated since 2009 as a result of state legislation pushed by the Predators -- about half of which comes from the bill that diverted state and local sales taxes from non-hockey events. (See Metro Finance document here.)

NewsChannel 5 never claimed that the privilege tax was "unfairly being left available to the team."  

Instead, we reported that the Predators created a source of funding for themselves after they had struck their agreement with the city, but those tax dollars have not reduced the obligation of Metro taxpayers.


The spin described above is similar to Henry's response after NewsChannel 5 Investigates raised questions about his statements to the Nashville Sports Authority last summer that he had "reached out to each and every one" of the country's major concessionaires and they told him that they could not beat an offer for a new contract from the arena's current vendor.

The two largest vendors in the country suggested to NewsChannel 5 that they had not told Henry any such thing.

On that occasion, Henry again spoke through a pro-Predators blogger, resulting in the following mocking report: "Henry confirms that a Senior VP of Aramark has had multiple conversations with Predators CEO Jeff Cogen, the last one being just a few weeks ago. Now if a simple blogger could come up with this information, I wonder why Phil Williams couldn't."

Later, NewsChannel 5 obtained a letter in which an Aramark executive wrote Cogen expressing his company's frustration that it had not been allowed to compete for the business.

When we got a chance to catch up with Cogen, he admitted that -- while he accepted a congratulatory phone call from an Aramark official when he got his new job -- he "never asked" if the company could offer a better proposal.