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April 5, 2010

NYT op-ed argues against skybox tax subsidies, (indirectly) undermines Forest City Ratner's plan for the Barclays Center

Atlantic Yards Report

It's pitched mostly as a baseball piece, tied to the new season, but today's New York Times op-ed, Throw Out Skybox Tax Subsidies, could just as easily been written to explain how the new basketball arena in Brooklyn is being funded and marketed.

Richard Schmalbeck, a law professor at Duke, and Jay Soled, a professor at the Rutgers Business School, write:

UNTIL the 1970s, Major League Baseball was a populist sport. Bleacher seats cost as little as a dollar, meaning middle- or even working-class fans could afford to take their families to a game a few times each season.

But in the years since, tickets to baseball games — along with other professional sports events — have skyrocketed in cost. Over the last two decades, the average ticket price for a Chicago Cubs game has increased 265 percent, more than four times the inflation rate. Add in parking, concessions and souvenirs, and a family trip to one of this week’s opening day games could easily cost a few hundred dollars.

There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses — essentially a huge, and wholly unnecessary, government subsidy.

That means that anyone who wants a good seat is in competition with businesspeople wielding deductions--and that ballparks are today designed with fewer seats but more luxury skyboxes.

For arenas, too

The same could be said about arenas. There are to be 104 suites at the Atlantic Yards arena, down from a once-projected 170. The team's interim home, the Prudential Center in Newark, has 82 suites, nearly three times as many as the 29 suites at the Izod Center.

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NoLandGrab: Yes, yet another subsidy for Bruce C. Ratner.

Posted by eric at April 5, 2010 11:48 PM