A proposal would require Phoenix to pay $150 million upfront, with the Suns kicking in 80 million, to renovate Talking Stick Resort Arena. Arizona Republic


Corrections & Clarifications: A previous version of this article incorrectly reported the year the Arizona Diamondbacks sued Maricopa County. The lawsuit was filed in 2017. 

Phoenix looked a lot different in 1968, when the National Basketball Association awarded the city a professional basketball team. 

The population had just topped 500,000 and the state was eager to house a professional sports team in its three-year-old, taxpayer-funded Arizona Veterans Memorial Coliseum at the Arizona State Fairgrounds. 

But by 1989, the coliseum — described by NBA scouts in 1968 as better than any NBA arena they'd seen, according to Republic archives  — was obsolete. The team wanted a new home and the community, once again, lined up to help. 

Phoenix leaders, who had watched their downtown deteriorate for decades, thought a new arena for the popular Phoenix Suns could inject life into the center city

The city agreed to pay for about half of a downtown arena, with the team funding the rest. The council approved the agreement with overwhelming public support. 

RELATED: Is Talking Stick Resort Arena a driver of downtown Phoenix's economy?

It's been about 26 years since what was then called American West Arena opened. The city and the team believe the arena now needs significant and costly repairs — everything from new plumbing and elevators to upgraded suites and fan amenities. 

They have brokered a $230 million renovation deal — with the city paying $150 million and the Suns paying $80 million — perhaps expecting the public to go along with the expense, as it willingly had before

That was not the case. The Suns have been met with a much different public sentiment about taxpayers subsidizing sports venues. Arizona's other professional sports teams, which are also on the prowl for new facilities, may soon face the same reality.

Sports deals are unpopular

The backlash to the Suns proposalwas instant.

It didn't matter that it wasn't a new arena or that the city's portion of the deal would be funded through an existing tourism tax. The very mention of taxpayer money in the same sentence as professional sports was met with public outrage

"It just surprised me, the reactions of some people," Phoenix Mayor Thelda Williams said. "To me, the Suns have always been a huge component of downtown and part of the city."

Following the public response, the Suns and the city backpedaled and hosted a series of open meetings, blasting out four-page color fact sheets to explain why they believe it to be a fair and advantageous deal and parading players out to the meetings. 

The public did eventually calm and, after learning some of the deal's details, some previous opponents softened their stances and even became supporters. 

MORE: Suns arena renovation brings mixed feelings from residents

The ultimate fate of the deal is still unclear. The council will take a final vote Wednesday. 

But the initial reaction to the deal signifies a new reality about sports subsidies, both locally and nationally. 

Sports deals have never been wildly popular. In 1997, a disgruntled man shot former County Supervisor Mary Rose Wilcox in the back and claimed it was justified because of her support of a tax hike to build the Diamondbacks ballpark.

But the public today seems even more skeptical of these deals and less willing to pay than ever before. 

Experts say there are several reasons for the public change of heart about  taxpayer-funded professional sports venues. 

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The financials don't pan out

When teams are trying to sell a city on a sports arena, they paint the facilities as economic drivers, and data shows that a professional stadium or arena does typically draw more spending and investment to an area. 

However, that spending is hardly ever enough to recoup the funds that local governments spend.

For example, Phoenix spent about $50 million on the original construction of Talking Stick Resort Arena. But after interest, the true cost has been $124.6 million over 30 years. 

The city boasts that the arena drives $335 million annually in "direct, indirect and induced revenue"  for Phoenix, Maricopa County and the state of Arizona. 

But only about $12.8 million is direct revenue for the city. And only about $3.8 million of that is directly attributable to the arena, in the form of rent payments from the Suns and taxes from the arena.

The remainder is tax revenue from nearby hotels, restaurants and retailers, and taxes generated from businesses that support the arena. The city doesn't separate out hotel revenue from a fan who flew in for a basketball game and a tourist who doesn't go to a game at all. 

MORE: Choose your own adventure: Phoenix Suns arena edition

Nationally, tales of new arenas with near billion-dollar price tags have dominated headlines, as have horror stories of sports deals where the public has not only never recouped its investment, but also lost money over time. 

"Slowly, over time, we've seen more and more of these deals and more and more economic studies showing that they're not productive for cities," said Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit and a companion website that critiques professional sports deals. 

Former Mayor Terry Goddard was the city's leader during the initial deal to build the Suns' downtown arena, approved in 1989.

Goddard said it was an easy sell then. Jerry Colangelo owned the team and he was beloved and trusted in the community. Colangelo agreed to pay slightly more than half of the cost.

This new deal, under a less popular owner, seems much less equitable, Goddard said in an interview. 

"The public benefits are undeniable to have the team in the area, but you've got to weigh that. I think, frankly, some public money is appropriate but certainly not anything (more) than 50 percent," Goddard said.


Bills introduced across the nation, including in Arizona, aim to curtail professional sports teams' relocation threats. Wochit

'Arena fatigue'

With new sports buildings going up each year and dozens of teams seeking public money, Americans are experiencing stadium and arena fatigue, deMause said.

That fatigue may be more intense in the Phoenix area — one of only about a dozen regions in the country with all four professional sports franchises, each of which have their own facility.

Additionally, the Valley is home to 10 spring training facilities, most of which were at least partially taxpayer funded. 

All of Arizona's arenas are at the age where they need renovations — even the Cardinals' 13-year-old Glendale stadium.

This creates an environment that pits the teams against one another as they try to secure limited public funds. 

Currently, both the Diamondbacks and Coyotes are starting to angle for new buildings as well.

MORE: The Coyotes will stay in Glendale another year. Can the city persuade the team to stay longer?

The Coyotes have been on a year-to-year lease at Glendale's Gila River Arena since 2016. They've made no secret of wanting a new, larger and more centrally located venue where they say they could make more money. 

The Diamondbacks sued their landlord, Maricopa County, in 2017, demanding $187 million in repairs to Chase Field. The team and county struck a deal last year, which allows the Diamondbacks to start looking for a new place to play. 

"The reason you're seeing more push back in Phoenix is simply because of almost like an interesting confluence of hurricane force issues," said Mark Rosentraub, professor of sport management at the University of Michigan's Michigan Center for Sport Management.

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With three of the four major sports teams searching for a new opportunity, it's a lot for a community to handle, Ronsentraub said. 

"If they had come at different times it may have been easier to swallow, but it's difficult to swallow everything at once," he said.

Adding to the chaos is the near-constant speculation that the teams could just up and leave the state altogether if they get a better deal elsewhere. 

Although all three teams have stressed that they'd prefer to stay in the Valley, they've also alluded that they have the ability to leave the state if needed.

MORE: Arizona Diamondbacks strike deal with county over Chase Field

John Vrooman, a sports economist and professor at Vanderbilt University, said professional sports limit the size of their leagues to create "at least one viable market that is empty without a team." Right now, that market is Seattle for both the NBA and NHL.

"This game of musical chairs creates extortion triangles that maximize the leverage sports teams can put on local governments with the threats of franchise relocation," Vrooman said. 

The teams aren't playing well

When asked why she thought the public had such a negative initial reaction to the arena deal, Williams didn't skip a beat.

"I swear it's because they're losing," she said. 

This season, the Suns have one of the worst records in the league and are set to miss the postseason for the ninth consecutive year.

Despite winning the NBA draft lottery and selecting first in the 2018 NBA draft, the Suns’ fortune hasn't changed much. Devin Booker is the team’s superstar, but after signing a $158-million contract in the offseason, he’s already missed 13 games this season. 

RELATED: Worst seasons in Arizona sports history: 2018 Arizona Cardinals join list

The diminished product on the court has given rise to empty seats in the arena. Fans have become fixated on the idea that owner Robert Sarver has run the once proud franchise into the ground.

The Diamondbacks and Coyotes have also suffered lackluster performances in recent years, making their money asks all the more difficult as well.

deMause said team owners typically employ one of two arguments: "Our team is great, we deserve a better place to play," or "Our team is terrible and will continue to be terrible until we get a new place to play."

"The first argument works a lot better. When your team is terrible, nobody cares, regardless of if it's a good argument," deMause said. 

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Pro sports are major money makers

The Suns' annual payroll for all players was $225,000 in 1968, according to then-general manager Jerry Colangelo. This year, it's $70 million, according to Spotrac, a website that tracks professional sports salaries. 

Colangelo purchased the team in 1987 for $44 million. He sold the Suns to Sarver in 2004 for $400 million. Today, Forbes estimates the team's worth at $1.3 billion. 

"In today's climate about public funding for teams, it's much more challenging because of the growth of the industry," Colangelo said. 

He described the Suns as a "mom and pop operation" for the team's first few decades. Today, as ticket prices, team worth and players salaries continue to skyrocket, the public is less inclined to lend a hand, he said. 

"That's not to say that it shouldn't take place. I still do believe in the private-public partnership concept," Collangelo said. 

There's also a glaring juxtaposition between Colangelo and Sarver in this regard.

MORE: Pro athletes with longest tenure in Arizona: Larry Fitzgerald, Diana Taurasi lead list

Colangelo was a self-made millionaire from a different, less-expensive era of professional sports.

Sarver, who came from money and spent his career running banks and investing in real estate, is criticized by fans as money-hungry and unwilling to invest in the Suns' success.

deMause said there's more distance between professional athletes and fans than ever before. Sports tickets used to be affordable to all income levels and players were once embedded in the communities. That's no longer the case. 

Suns President and CEO Jason Rowley admitted that the team has not adequately publicized its involvement and generosity to the community. He said he hopes to change that moving forward. 

According to its website, Suns Charities has donated more than $21 million to Arizona organizations. This month, Booker pledged to donate $2.5 million.

Rowley said he knows how people might see Booker and think, "I can't relate to that kid because he just signed a $158 million contract," but he hopes people will appreciate the amount of good that can be accomplished with his donation. 

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More needs, less money

Former Mayor Skip Rimsza, who was at the city's helm in 2004 when Phoenix and the Suns partnered for a $70 million renovation (the city paid $20 million, the Suns paid about $50 million), said today's financial demands are more challenging than they were during his time. 

Phoenix was in a rapid state of growth and flush with cash. Today, the city struggles to keep its budget balanced and the community's needs are higher than ever.

Phoenix police and fire departments have reported sub-par staffing levels, the city's grappling with a $4.4 billion pension debt and its infrastructure needs replacing. 

The money the city would use for the Suns arena does not come from the same pot as the funding for those demands, but that can be difficult to explain to residents who see their roads and water lines in disrepair. 

The money for the arena renovation would come from the Phoenix Sports Facilities Fund, which is comprised of a 1 percent tax on hotel rooms and 2 percent tax on car rentals. The fund was created to build and support the downtown arena, and it's also supported renovations to the Milwaukee Brewers spring training facility.

MORE: Arizona Diamondbacks installing synthetic grass at Chase Field

Although it was created for tourism-related purposes, the City Council has discretion over how the money is spent. The council can — and some argue it should — use the roughly $20 million the city generates each year in tourism taxes for more critical needs.

Phoenix mayoral candidate Kate Gallego has spoken out about the proposed arena deal, arguing that it should not be up to the city to subsidize billion-dollar sports teams.

"We have limited resources, so we have to prioritize," Gallego said. 

She would like to see the Suns stay in downtown, but she said the city should assist the team in finding private financing — not front the cost itself. She equated the arena to the Sheraton Grand Phoenix, which the city sold last year to a private hotel operator.

"Running a hotel is not a core city government function and neither is running an arena," she said. 


The proposal for a $230 million renovation of Talking Stick Resort Arena has sparked an intense public discussion. Alyssa Williams, William Flannigan and Annalee Monroe, Arizona Republic

Getting a better deal

What does the newfound skepticism surrounding sports deals mean for the future of these ventures in the Valley? 

Will it result in deals that are better for taxpayers? Or just require sports team owners to get more savvy with how they sell the deal?

Probably both, experts say. 

DeMause said team owners have to put in a little more work to convince the public and elected officials, but they're usually willing to put in the time — or wait it out until a friendlier politician takes power. 

"They're going to keep throwing stuff at the wall until they can find something that will go through," deMause said. "I imagine it will take a while, but I'll be surprised if everybody (In Phoenix) doesn't end up getting new buildings." 

However, if a city takes the cue from its residents and negotiates tougher, it may end up scoring better deals. 

The Brewers had been asking Phoenix for significant upgrades to its spring training ballpark in Maryvale for years and tried to woo other cities to see if they could get a better deal elsewhere. 

MORE: Spring training baseball adds big money to Arizona's economy, study estimates

In the end, the team ended up agreeing to one of the most taxpayer-friendly deals in the Valley. 

The Brewers agreed to spend between $41 million and $63 million on renovations to Maryvale Baseball Park and take over operations of the facility in exchange for the city spending $10 million over five years to assist with renovations.

The city also will pay the team about $1.4 million per year for 25 years to operate the park, which is about what it spent previously on operations, according to the city.

Mayoral candidate Daniel Valenzuela helped broker that deal. He said it should be a model for future sports negotiations.

"We have to get to a point to make a sports team more of a partner and less of a customer," Valenzuela said. 

He said he believes the currentSuns deal is similarly structured. He said that if he were on the council, he'd approve the deal. 



With transparency, public may come around

Valenzuela said he believes the Suns deal has been painted to look bad, when it's actually "the responsible thing to do."

He said the city already owns the arena and has to figure out what to do with it, regardless of whether the Suns stick around. Funding the renovations with the existing tax on tourist activities makes sense, he said. 

"If the vote was to subsidize a sports team, I would be a no vote," he said. "That's not what we're talking about." 

The city and the Suns have conceded that they did not take the necessary time to explain the deal tothe public before attempting to vote on it in December. After seeing the public backlash, the council voted to delay their decision and host a series of community meetings. 

"We did a poor job. I know I did a poor job of getting the information out sooner," Williams said. 

Rowley agreed. 

"We definitely should have been more aggressive about getting out and having the discussion with the public," Rowley said. 

MORE: Can 2018 get worse for Arizona's major pro sports franchises?

Rosentraub assisted in outreach for the Oakland Raiders' new stadium in Las Vegas. That project is projected to cost $1.9 billion, about $750 million of which is public money. 

It's the single largest sports subsidy in the history of professional sports, Rosentraub said. 

He said prior to the state committing those funds, lawmakers pushed for resident outreach, communicated with the public and encouraged residents to weigh in. 

Much like Phoenix's Sports Facilities Fund, the Raiders stadium will be funded through an additional tax on hotel rooms in Clark County, where Las Vegas is located. Rosentraub said it was critical to communicate that with residents before asking them to weigh in on the $750 million price tag. 

"The public sector needs to do a much better job in laying out 'This is what we're spending' and 'This is what we're getting,' " Rosentraub said. 


Suns interim GM James Jones, Devin Booker, Deandre Ayton and Jamal Crawford attended discussion on $230 million arena renovation proposal Saturday . Duane Rankin, Arizona Republic

Colangelo: 'I still believe in it'

Everything about professional sports has changed since the 28-year-old Colangelo moved his family from Chicago to Phoenix in 1968. 

Colangelo was responsible not only for the Suns, but also for bringing the Diamondbacks to downtown Phoenix.

But Colangelo said the argument for supporting professional sports in the downtown core is still the same: Sports help create synergy in a downtown and give people who don't work and live in the area a reason to feel a part of it. 

He said he believes the arena helped start the revival of downtown Phoenix and can continue to support its growth. 

"I think it's still very important to keep the teams there the best they possibly can," Colangelo said. "Obviously, I'm the one who put them there. I still believe in it"

Republic reporter Matt Wilhalme contributed to this article.


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