Thursday, March 1, 2012

The End of the Senators?

The Ottawa Senators may have to declare bankruptcy if the province of Ontario scraps the tax exemption that allows businesses to write off sports tickets, declared Cyril Leeder, the Ottawa Senators team president.

Leeder also said that the decision announced yesterday by Ontario's minority Liberal government was not thought out and favours Toronto's sports teams.

The big name franchises in Toronto (Raptors, Leafs, and Jays) would most likely survive the tax scrap while the smaller name franchises (Senators) would not.

The province of Ontario allows businesses to write off 50% of all ticket and luxury suites for all events at the venue (sports, theatres, etc.) and all entertainment costs are deductible.

This tax deduction is a very strong incentive for Senator ticket sales.

All of the luxury boxes at the Scotiabank place are leased to corporations and roughly 50% of season ticket holders use the deduction as well.

Dalton McGuinty, the Premier of Ontario and the Finance Minister Dwight Duncan want to scrap the subsidy because it costs the province $15 million annually.

McGuinty stated that his government has been warned to organize it's fiscal house. The government is stuck in a $16 billion deficit and cannot afford to subsidize corporate entertainment.

When Duncan talked to the reporters about the issue, he said the move was made to make Leafs games more affordable for families (The Leafs have the highest average ticket price at $123.77).

Leeder said Duncan “should remember that there’s more than one team in Ontario.”
“I think that’s the most disturbing thing here,” he said. “We weren’t consulted at all. We didn’t get a phone call until five minutes before there was something released to the public. If you’re really trying to find solutions, you would think you would talk to your constituents about where the solutions are.”
“We pay a lot of taxes here in this province. A lot. And we’re happy to do that, but we just want to be treated fairly. And if we’re not, we can’t stay.”


1 comment:

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