NBA Teams Paying Rent During Lockout?
The public fleecing by sports teams is bad enough when economist after economist has found that the arenas and surrounding developments almost never provide enough economic impact to make up for the cost even when the teams are playing. But if the log-jammed negotiations stall by Wednesday, possibly resulting in a protracted legal fight that would imperil the entire 2011-12 season, citizens in the above cities will continue to be on the hook for debt payments to support arenas left dormant by the lockout.
With few, if any exceptions, NBA teams will continue to pay rent in their buildings during an extended lockout in accordance with whatever lease agreements are in place (the Pacers, for one, live rent-free in Conseco Fieldhouse). But the lockout doesn’t absolve the city, county or state governments in those places from continuing to make debt payments while the teams that benefited from the public funding refuse to play.
To date, only one city has so much as threatened to take legal action against the NBA to recoup revenues lost from the lockout. Last month, the Memphis City Council passed a resolution authorizing city attorneys to explore legal options over the estimated $18 million in annual debt payments for a potentially vacant FedEx Forum. It’s hard to blame the city for wondering where that money is going to come from, considering the arena was 83 percent publicly financed, including $207 million in bonds sold by the Shelby County Sports Authority. Grizzlies owner Michael Heisley admitted to the Commercial Appeal last week that he doesn’t even know what’s going on in the negotiations that could shutter his free playpen for a season.