Abe Pollin, the owner of the Washington Wizards and the Verizon Center where they play seems like a genuinely good guy. In a town that doesn’t have much in the way of a public spirited civic elite, he’s doing his best. And even better, unlike your average sports team owner, he built his arena with his own money. And not only did he pay for it out of pocket, but unlike a lot of publicly financed sports facilities it actually has turned out to be an important anchor in the revitalization of a whole neighborhood.
Under the circumstances, it was a little disappointing to see Pollin ask the city for $50 million to renovate the Verizon Center. In particular, he “wants the extra money to upgrade all or some of its 110 luxury suites and replace its outdated scoreboard.” The scoreboard really is outdated and the luxury suites could be fancier. Still, this seems like a classic example of something not worthy of public subsidy. Improving the fan experience by upgrading the scoreboard either does or does not make business sense in terms of higher ticket sales or willingness to bear price increases. Similarly, it’s either the case that there are business will shell out money for fancier luxury boxes, in which case Pollin should make them fancier, or else there aren’t many such business and he shouldn’t. I can’t imagine any economic theory in which there are important scoreboard externalities that the DC government has to step in and fill.
Indeed, Pollin doesn’t even seem to have bothered to come up with a legitimate policy argument. Instead, the Post reports that his “company argues that the city should give the arena a financial boost as a reward for its role as a catalyst of the downtown renaissance, city officials said.” He really does deserve credit for that, as I wrote above, but seriously . . . an ex post facto reward subsidy? Later the article contemplated the possibility of financing these upgrades with a tax on ticket sales, which seems like not much more than an unduly elaborate form of raising ticket prices. But why should people in the cheap seats need to pay more in order to finance upgrades to the luxury boxes?