Are the Nashville Predators a pack of tax cheats?

We have interesting news from the Tennessean, in which it appears that the Preds have been underpaying their ticket taxes to the city government, to the tune of roughly $400,000. Now, before people get too worked up over this as just another anti-Predators attack by the newspaper (most Preds fans have been angry with the Tennessean's editorial position relative to the team in the past), an understanding of what happened would help.

Basically, the original Sommet Center arena lease called for a per-ticket fee of $1.75 or 5%, whichever is less, would be paid by the team to the city. At some point during the lease amendment negotiations that took place shortly after the local owners bought the team in 2007, the 5% provision was removed. With upper bowl seats going for as little as $21, that could mean as much as a 70 cents-per-ticket difference this season ($21 x 5% = $1.05).  The team and the city, however, have still been operating under the old framework, until a review conducted by the newspaper found the discrepancy.

When you're dealing with complicated relationships like this, these things can happen, and once it's all laid out on the table I'd be stunned if the team didn't make things right. As an example, ages ago I was part of a multi-million dollar business project in which a key supplier was responsible for most of the work. A portion of that work was carved out for single-fee payment, while the rest was paid by the hour.

A couple years down the road, however (after many of the staff involved had changed), we discovered that despite having paid the single-fee, we were also getting billed hourly for that part of the work as well (this was on a scale similar to what we're talking about with the Preds here). Once it was brought up, the error was recognized as an honest mistake and corrections were made, and that sounds very similar to what we're reading about here. I'm sure some will take this news and use it to run the team through the muck once again (Del Biaggio!), so hang on for a bumpy ride.

One particularly useful point that the Tennessean's story does make is that the city government probably doesn't provide the resources necessary to monitor these contracts:

The payment record underscores how complicated the Metro agreements are with its pro sports franchises and how little oversight the city has on these arrangements. The city relies largely on an audit done by an accounting firm the team hires to review its financial records.

Kudos to the Tennessean, then, for bringing this issue to light; just hold on, however, for the inevitable tidal wave of sensational headlines soon to cascade across other media outlets.

UPDATE: Let's hold up on those kudos, shall we? It turns out that the team has been paying its proper obligations, once the lead attorney for the city was consulted on the issue. False alarm by the local paper, folks.

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