The Washington Capitals hockey franchise, which won a controversial tax break this year after claiming financial difficulty, grossed more than $21 million from ticket sales between 1974 and 1981.
At the same time, the Capital Centre, home of the Caps since it opened in Landover, in 1973, grossed nearly $200 million from admissions through January of this year.
Washington businessman Abe Pollin, who owns the Capital Centre and holds controlling interest in the Caps, said earlier this year he would have to sell the hockey team or disband it unless attendance improved and unless the Caps were exempted from paying Prince George's County an admission tax on tickets.
Pollin said at the time that he had lost $21 million on the Caps' operations in the eight-year history of the team. Pollin has never disclosed the gross income he has received as owner of the Caps, the Capital Centre and the Washington Bullets of the National Basketball Association, which also play their home games at the Capital Centre.
Prince George's County Council member Sue V. Mills, who last August cast the lone dissenting vote on the measure to exempt the Caps from most of the county admissions tax for the next three years said last week she will introduce legislation to repeal the law which granted preferential treatment to the Caps. Mills said she has the support of four newly elected members of the council, which would give her a majority if a vote were taken to repeal the tax break.
Mills criticized the council last week for approving the tax break for one "failing business" while other busineses weren't given the same consideration. Mills also observed that the Caps are still losing, despite help from the county and changes made in the team.
Although the Caps have a losing record on the ice after 21 games this season, attendance for the first nine home games is up by more than 33,000, compared with a similar period in last year's schedule, a spokesman said. At the end of 20 games this year, the Caps had a record of seven wins, nine losses and four ties, compared with five wins, 14 losses and two ties at the same point last year.
Part of the increased attendance can be attributed to the fact that several local businesses pledged to guarantee sellouts of the first 10 games this season. Nonetheless, the average attendance of 13,496 is below the arena's capacity of 18,000. But based on the higher attendance figures, the spokesman said, "I think you can safely say on a percentage basis that our gross is higher."
But the spokesman and other Caps officials declined last week to answer questions about the team's gross income this season or in prior years. Capital Centre officials also have declined to provide any information regarding the arena's operations.
A review of tax figures obtained from state and county officials and a study that was prepared for Pollin last year indicate that aside from the entertainment it provides, the Capital Centre is one of the biggest business operations based in Prince George's County.
The Centre which books concerts, ice shows, circuses and professional sports events, pays rent to the Maryland National Capital Park and Planning Commission for land on which the huge arena was built nine years ago.
The payment to MNCPPC is calculated as 1 percent of certain revenues generated by the Centre. Based on that formula, MNCPPC officials estimate that the Capital Centre had gross revenues of $198 million between 1974 and June of this year.
A study that Pollin commissioned last year showed that the Centre had paid the MNCPPC $1.3 million through June 1980. The same study, which was prepared by Booz Allen Hamilton Inc., showed that admissions taxes paid by the Capital Centre through March 1981 totaled $10.1 million. Prince George's share of that total amounted to $9.8 million, the study said.
Prince George's County levies a 10 percent admission tax on each ticket that is sold to professional sports events and entertainment activities in the county. The Capital Centre's gross revenues, calculated on the basis of that formula, would total $101 million for the eight-year period which ended March 31, 1981.
The state of Maryland actually collects the tax and retains one-half of 1 percent to cover administrative costs. It then disburses the balance of the money to the county. The state imposed the amusement tax prior to 1973, but the legislature voted to turn over most of the receipts to counties and other subdivisions as an additional revenue source.
Tax-revenue figures compiled by the Maryland Comptroller's Office show that in the past fiscal year alone, ticket sales from professional sports events at the Capital Centre grossed $4.8 million. The revenue figure for the most recent fiscal year is based on amusement taxes totalling $478,630, which the county collected on admissions to professional sports events.
Prince George's County received $603,027 from admissions to all professional athletic events in fiscal 1982, compared with $650,066 in the prior year, according to figures provided by the state comptroller's office.
In all, gross revenues from athletic events staged in the county last year totaled more than $6 million, although that was down from $6.5 million in fiscal 1981. Most of those events were held at the Capital Centre.
In a highly publicized campaign to build support for his Washington Capitals hockey team and, ostensibly, to keep the franchise here, Pollin and a group of investors persuaded county officials to reduce the amusement tax for the Caps. The measure reduces the 10 percent amusement tax on the Caps to one-half of 1 percent in each of the next three years. In the fourth through sixth year covered by the measure, the rate would gradually return to the 10-percent level.
Amusement taxes paid by the Caps in the past eight years provide some insight into the amount of gross revenues which Pollin received from the team's ticket sales. Those taxes totaled $2.1 million, a spokesman for the Caps said. Based on the 10 percent amusement tax rate, the Caps' gross revenues from ticket sales in the first eight years totaled $21 million.
Television also provides a source of income for the Caps, but team officials declined last week to disclose revenues that broadcasters pay for the right to televise Caps games. Officials at WDCA-TV also refused to disclose the terms of its agreements with the Caps and Bullets. National Hockey League officials also declined to discuss television revenues of individual league members.
The National Basketball Association has a similar policy pertaining to information about individual franchises. On the other hand, television revenues resulting from the broadcast of games by CBS and cable are divided among the league's 23 teams, an NBA spokesman said.
The NBA's contract with CBS calls for the network to pay the league $22 million in each of the next four years. The Bullets' share of that package would be more than $956,000 each year through 1985.
A similar contract between the NBA and ESPN and USA cable television will produce $5.5 million this season and again in 1983. The Bullets share would be more than $239,000 a year.
Although tax receipts from athletic events decreased slightly last year, amusement tax collections rose by more than $487,000 as substantial increases were reported in taxes from seven other major categories.
The decline in the county's amusement taxes from professional sports was a matter of public record before officials approved special legislation in August, granting tax relief to the Caps for five years.
Estimates by Prince George's County's budget office show that the county will collect about $3 million in admissions taxes in fiscal 1983, or about the same as the $2.9 million recorded in fiscal '82. But the office developed its fiscal 1983 estimates before county officials approved the tax relief bill for the Caps.
Continued higher attendance would be significant for Prince George's County if Mills is successful in bringing about a repeal of the tax break. Fun and games are important sources of tax revenues in the county.
Sports and entertainment activities staged in the county last year generated gross revenues of more than $29 million, producing nearly $3 million in amusement taxes, according to figures provided by the state comptroller's office.
Prince George's amusement tax collections increased nearly $500,000 in fiscal 1982, despite the decline in receipts from athletic events. The county collected $478,630 in amusement taxes on admissions to professional sports events, compared with $499,000 in the previous year.
Amusement tax receipts from horse racing also declined last year, from $282,808 to $222,480, indicating that gross gate receipts fell from $2.8 million to $2.2 million. But receipts from other major categories covered by the 10 percent amusement tax were up considerably.
Categories for which tax collections were higher last year include: movies, which generated revenues of $6.3 million, and admissions taxes totaling $632,545; shows and exhibits, $1.8 million ($175,328); live theater, opera and concerts, $8 million ($807,565); coin-operated vending devices, $1.4 million ($136,354); golf green fees and cart rentals, $1.2 million ($122,227); night club admissions taxes, $786,960 ($78,696) and "refreshment merchandise" sales at night clubs, $347,800 ($34,780).