With the pandemic keeping fans at home, Pittsburgh’s major sports teams face significant sales declines for the year. To varying degrees, however, income from goods and media mitigate the blow.
Your landlord – the Sports and Exhibition Authority (SEA) – is not so happy.
The SEA is the city-county authority that governs PPG Paints Arena, PNC Park, and Heinz Field, and Lower Hill Redevelopment Area, David L. Lawrence Convention Center and Riverfront Plaza, North Shore Riverfront Park, and owns several parking garages.
To what extent the pandemic has damaged SEA revenues is unclear. Annual losses have not yet been estimated. However, the revenue comes mostly from surcharges for tickets to live events, leases from the city’s professional sports teams, and park revenues.
Visitor and park revenues have decreased. The $ 800,000 the SEA typically receives annually from Regional Asset District sales tax is also expected to decline this year. SEA revenue was already $ 400,000 lower last year than $ 29.8 million in 2018.
To offset expected losses and fund projects, the SEA has requested $ 7.4 million from the Commonwealth Redevelopment Assistance Capital Program and $ 6.1 million from the US Economic Development Administration. The $ 13.5 million is for changes related to pandemics, such as: B. rebuilding gate and retail areas in the stadiums and convention center to allow for greater social distancing, improvements to enable contactless transactions for food and merchandise, and new air filtration systems.
Such inquiries, however, have rekindled longstanding debates about whether public money should fund areas that benefit private companies, especially at a time when local governments are facing extreme financial hardship.
“We have suggested many, many times that the teams should take much more responsibility for repairing and maintaining the stadiums themselves,” said Eric Montarti, research director for the Allegheny Institute for Public Policy.
The SEA funded the construction of the stadiums from state and federal development funds, local taxes, and other sources. Under the SEA’s leases with the teams, the SEA is responsible for major capital repairs and improvements, and the teams are responsible for the routine maintenance and day-to-day operation of the facilities.
“The safe reopening of these important public destinations is critical to ensuring the economic recovery of the city of Pittsburgh, Allegheny County and the Commonwealth of Pennsylvania,” said Mary Conturo, SEA executive director.
However, such a safe reopening is a moving target. The NFL does not have an official COVID attendance policy. The Steelers have a limited number of fans for home games at Heinz Field. The NHL and MLB have not disclosed their attendance guidelines for their next seasons, despite the fact that the Penguins announced in September that they would be funding a number of COVID-related capital improvements at the PPG Paints Arena, including installing mobile ordering and self-checkout Technology in food and retail space.
The Steelers, Pirates, and Penguins didn’t answer questions about their finances. The Steelers had sales of $ 457 million in 2019, including $ 72 million in sales of Heinz Field tickets, according to Forbes magazine. The $ 273 million pirate revenue included $ 44 million in PNC Park Gate revenue. The penguins’ revenue of $ 184 million included $ 76 million at the gate.
How much the teams contribute to the local economy is controversial.
In 2018, the teams commissioned a study claiming they contribute more than $ 50 million in city, county, and state taxes annually.
The Pittsburgh Downtown Partnership estimated that the 2018 playoff series between the penguins and capitals in PPG Paints Area alone generated $ 4.4 million in revenue from local foods, hotels, beverages and merchandise in two games.
A 2015 audit by the Pittsburgh City Controller found that the teams contribute approximately $ 21.4 million annually in income tax, parking tax, amusement tax, wage tax, and revenue from local service taxes and facility usage fees.
In a typical year, the agency said, an average of $ 1.1 million is spent on maintenance of Heinz Field, $ 944,333 on PNC Park and $ 119,207 on PPG Paints arena.
When asked whether the SEA’s tenants should pay for the planned renovation work and not for the taxpayers, Conturo said: “The authority ensures that its obligations under the rental agreements are upheld and fulfilled. The agency is also carefully examining opportunities to renegotiate certain provisions, including contributions to and responsibility for the cost of capital. Such renegotiation naturally requires the consent of both parties. “
The teams could end up paying for some of the pandemic upgrades. For example, if one of the government grants the SEA is tracking fails, the teams would cover the shortfall as the COVID upgrades progressed, Conturo said.
The pirates and penguins did not respond to requests for comment.
“We have invested a lot of money in Heinz Field since it opened 20 years ago,” said Burt Lauten, Steelers communications director. “We have a public-private partnership with the SEA and both sides have a responsibility to uphold that in relation to the upkeep of Heinz Field. We believe we have more than reached our end of the agreement. “
Comments are closed, but trackbacks and pingbacks are open.