A second Texas NHL franchise could bring excitement, rivalry and civic pride. None of that means Austin or Houston residents should be asked to finance a billionaire’s arena.
Texas may soon get a second National Hockey League team; that would be exciting. A franchise in Austin or Houston could create a new statewide rivalry with the Dallas Stars, expand youth hockey, attract major events and give thousands of fans a team of their own. It could also become enormously profitable for the Friedkin family, the National Hockey League and the surrounding real-estate developers. That is precisely why taxpayers should not be expected to build the arena.
The NHL is evaluating Austin and Houston as possible homes for a 33rd franchise. Commissioner Gary Bettman has estimated that the total investment could reach approximately $3.5 billion, including the expansion fee and construction of a new arena.
The Friedkin family has the resources to pursue that investment. Its business interests include Gulf States Toyota and major European soccer clubs. This is not a struggling civic nonprofit asking the public to preserve a beloved community institution.
It is a sophisticated private ownership group seeking entry into one of the most valuable professional sports leagues in North America. If the opportunity is worth billions of dollars, the owners should be willing to invest their own billions. Professional sports owners rarely describe public arena assistance as a subsidy. They call it an investment.
Cities are promised jobs, tourism, tax revenue, surrounding development, national attention and a renewed sense of civic identity. Renderings show restaurants, hotels, apartments, public plazas and smiling families walking beneath glowing team logos. Some of those benefits can be real.
A well-designed arena can anchor a busy entertainment district. It can attract concerts and special events. It can create construction jobs, permanent employment and memorable experiences that improve a city’s quality of life. But those benefits do not automatically prove that taxpayers should assume the cost or risk.
The central economic problem is simple: much of the money spent at professional sporting events is not new money entering the local economy. A resident who spends $300 on tickets, parking, food and merchandise may spend $300 less at restaurants, theaters, shops or other local entertainment businesses. Economists call this the substitution effect.
The spending has moved.
It has not necessarily been created.
The research brief underlying this editorial notes that independent sports economists have repeatedly challenged claims that stadiums generate large amounts of net-new regional wealth. In many cases, the arena concentrates existing local entertainment spending inside a heavily subsidized district rather than expanding the broader economy by the amount promised.
That does not mean a hockey team has no value. It means civic enthusiasm should not be confused with a financial return. The public benefits of a new arena are often projected through economic models stretching decades into the future. The public costs are usually much easier to identify.
They can include:
- Publicly issued bonds;
- Sales-tax increases;
- Property-tax abatements;
- Discounted or donated land;
- Roads, utilities and parking infrastructure;
- Tax-increment financing districts;
- Operating subsidies;
- Public responsibility for maintenance or renovations; and
- Financial losses if projected development fails to appear.
When private projections fall short, the owner still owns the team. The public still owes the debt. That imbalance should shape every negotiation in Austin or Houston. Private investors receive the franchise appreciation, ticket revenue, sponsorship income, naming-rights payments, luxury-suite revenue and surrounding development value.
If taxpayers are expected to absorb part of the risk, they should receive more than promises of civic pride and indirect economic activity. Public subsidies are often defended as an unavoidable part of attracting major-league sports.
Recent NHL history shows otherwise.
T-Mobile Arena in Las Vegas was privately financed. The venue opened before the Golden Knights began play and became the team’s home without placing the arena’s construction debt on local taxpayers.
Seattle followed another largely private model. Oak View Group and its partners financed the redevelopment of the former Seattle Center Coliseum into Climate Pledge Arena. The city retained ownership of the land and building while the private operator assumed the redevelopment cost and entered into a long-term agreement with the city.
These projects were not acts of charity. The private investors expected to make money. That is the point. They believed the arenas were valuable enough to justify their own capital.
Utah offers a different warning: Salt Lake City approved a 0.5% sales-tax increase and a broader sports and entertainment district tied to renovations around the Delta Center after the former Arizona Coyotes moved to Utah. The arrangement allows substantial public financing and favorable land treatment connected to a privately controlled sports enterprise. The uploaded research identifies up to $900 million in municipal bonding authority, a long-term lease involving public land and additional tax-increment support.
Texas should study both models before making an offer.
Vegas and Seattle demonstrate that private financing is possible.
Utah demonstrates how quickly a team can become the justification for decades of public obligations.
A strict refusal to spend any public money near an arena would be unnecessarily rigid.
Cities routinely invest in roads, transit, drainage, utilities, sidewalks and public safety around major developments. Those improvements can serve residents, nearby businesses and future projects beyond the arena itself.
The distinction should be whether the public is funding broadly useful infrastructure or directly underwriting a private entertainment asset.
A city might reasonably extend a road that improves access to an entire district. It should be far more skeptical of paying for premium suites, team offices, locker rooms, scoreboards or the core structure from which a private owner collects revenue.
The principle should be straightforward: Public money should build public value. When an improvement remains useful regardless of whether the team succeeds, the argument for public participation is stronger. When the spending primarily increases the value of the franchise or its private real-estate district, the owner should pay.
The danger begins when cities start bidding against one another; Houston may fear losing the team to Austin. Austin may fear losing its chance to become a major-league city. That competition gives the ownership group leverage. Each city may be encouraged to offer more land, larger abatements, additional infrastructure or creative tax arrangements in order to defeat the other. The Friedkin family would then benefit not only from choosing the better market, but from forcing two Texas cities to increase the value of their offers.
Neither city should participate in a race to see which can transfer the most public wealth to a private sports enterprise. Houston has a large enough market to support the team on its merits. Austin has enough growth, corporate money and regional interest to make its own case.
If neither market can support a privately financed arena, that raises a serious question about whether the franchise is economically viable in the first place. Taxpayers should not be asked to rescue a business plan before the first puck is dropped.
Austin or Houston may ultimately decide that some form of public partnership is worthwhile. If so, the agreement should be public, limited and enforceable.
At minimum, residents should receive:
- Full disclosure of every subsidy, rebate and tax concession;
- An independent economic analysis not paid for by the team;
- Voter approval for any major tax increase;
- Clawback provisions if the team relocates or promised development is not completed;
- Guarantees against future operating subsidies;
- Public participation in revenue if public money finances the arena;
- Clear responsibility for maintenance and future renovations;
- Community-access commitments;
- Local hiring and contracting requirements where legally permissible; and
- A transparent accounting of infrastructure costs outside the arena itself.
If taxpayers finance a meaningful share of the building, the public should receive a meaningful ownership interest or revenue stream. Anything less asks the public to assume investor risk without receiving investor returns.
I say this as someone who wants hockey to grow in Texas.
I played high-school hockey in New York and still play today. I know firsthand what the sport can give a community: friendships, discipline, tradition and a place where people who might otherwise have little in common become teammates and fans.
A second NHL franchise could introduce thousands of Texas children to the game, strengthen youth programs and give players across Central or Southeast Texas a hometown team to follow. That would be a genuinely good development for hockey—and one I would personally celebrate. But supporting the growth of the game does not require supporting every financing arrangement proposed in its name.
I can want another Texas NHL team and still believe the people who will own and profit from it should bear the principal cost of building its arena. Professional sports matter to people in ways that are difficult to capture in a conventional financial analysis: fans build traditions around teams, children choose favorite players, families attend games together, and cities celebrate playoff runs and mourn losses as a community. A second Texas NHL franchise could create decades of memories and give Austin or Houston a powerful new civic identity. Those benefits should not be mocked or dismissed, but civic pride is not a financing plan.
The Friedkin family would own the franchise. The NHL’s existing owners would divide the expansion fee. Private developers would gain from the arena district. Players, sponsors, broadcasters and vendors would all participate in the resulting business. Taxpayers should not be left holding the least exciting part of the deal: the debt.
Texas should welcome another NHL team. Austin and Houston should compete through their fans, markets, locations and long-term vision. They should not compete through larger public giveaways.
If the Friedkin Group believes a Texas NHL franchise is worth billions, it should build the arena with its own money.
Texas may be ready to support another hockey team. It should not be asked to buy one.