I’m unclear on the concept of the new deal the city reached with the Stockton Thunder to reduce the city’s contribution to the arena by $200,000. The arena loses $1.3 million a year.
Together, the Arena, Ballpark, Bob Hope and Oak Park Ice Arena lose $2.4 million a year.
$1.3 million is a lot less money than the arena’s previous management company, IFG, used to lose (upwards of $3 million in the arena’s first years). So there has been progress. Another $200,000 reduction is more progress.
Hail, progress. Yet even if the city next makes a deal with the Stockton Ports to reduce its contribution to them by a commensurate amount (a big if), the city will have reduced city venue losses to a $2 million deficit.
Is that good enough?
The money the city shovels into venues must surely be complicating city negotiations with creditors. They’ll object that they should not have to take a haircut when the city is wasting money on luxuries. But creditors are a secondary concern. Stocktonians expect to see these venues run with less red ink.
“We are working with the Ports to reduce the City’s contribution to the Ballpark operations,” said city Spokesperson Connie Cochran.
“She added: “The SMG contract was entered into after our declared fiscal emergency. We structured that contract to ensure improvements through operational efficiencies; as the number of events increases, the City’s operational costs decrease. There will always, likely, be a subsidy. That is the nature of municipally owned entertainment venues. However, the facilities also provide an economic benefit through the jobs that they create. Entertainment venues also enhance the quality of life both residents and visitors.”
I get all that. I’m just surprised the city is not getting closer to zeroing out these operating deficits in its bankruptcy. Now ask me how much red ink is tolerable, and I’m not sure. $300,00 a year to a half-million? The folks familiar with the operating challenges might say that is unrealistic. But a perpetual $2 million deficit? What’s a bankruptcy for?