Alleged Spat Between James Dolan and New York State Agencies Could Lead to Higher Ticket Prices and No Beer at Games

NBA: Brooklyn Nets at New York Knicks
Brad Penner-USA TODAY Sports

The reported ongoing feud between New York Knicks owner James Dolan and the State of New York continues, amid a public outcry for the rescission of a tax carve-out that has benefited the team for forty years.

Alarmingly, for Dolan, as The New York Daily News reported, the rescission is allegedly being proposed by the legislature for this year’s budget. It is estimated that the tax break, on the books since 1982, is worth approximately $43 million per year. It reportedly amounts to a billion dollars in savings over time, since Dolan began running the team.

This development comes on the heels of Madison Square Garden Entertainment Corp.’s recent announcement that it has filed a lawsuit against New York State’s Liquor Authority. The lawsuit stems from a months long controversy involving Dolan allegedly using facial recognition software to ban attorneys who have sued Dolan from entering Madison Square Garden.

New York law requires that any venue that has a license to sell alcohol is obligated to allow access to the general public. The SLA has threatened to remove the liquor license from MSG and other Dolan owned properties because Dolan is allegedly refusing to allow his opposing legal counsel from entering MSG. This puts him, potentially, in violation of this requirement of the license.

Dolan fired back, saying ““While others that have been subject to this harassment may have been forced into submission or silence, we are taking a stand on behalf of our fans and the many small businesses who have long been subject to the SLA’s corruption.”

Ironically, Dolan himself has threatened to halt alcohol sales at Ranger games, the hockey team owned by Dolan that also plays at MSG. The threat is purely a publicity stunt by Dolan, who told the local Fox affiliate “they’re doing this for publicity, so we’re gonna give them some publicity.”

While Dolan and New York battle these issues out in the courts, it’s the fans who could bear the brunt of it all. Both the Knicks and Rangers are expected to make the playoffs this year.  Average tickets are already around $100 a seat, and could go up in price if Dolan is forced to pay millions of dollars more per year in taxes. Forbidding liquor sales at games, especially playoff games, could also cause an uproar amongst the fan base.

Local governments often give tax benefits to sports teams or other businesses as a way of partnering with them. Teams create jobs and bring fans or spectators into the city, who spend money at local bars, restaurants, or other establishments. A tax break is intended to incentivize teams to make their home in the city, and any lost tax revenue would be offset by economic generation. But while the other New York sports teams, like the Mets and Yankees, also enjoy favorable tax treatment, no team has quite as generous a deal as what MSG benefits from.

Previous efforts to rescind the tax break in recent years have failed. And even with public pressure mounting, it’s unlikely a bill would be passed or signed by Gov. Kathy Hochul. The governor faced an unexpectedly heated election race last fall, and reportedly benefited from donations by Dolan to her campaign. But with both New York State and New York City facing projected massive budget shortfalls, there may be enough political will for the legislature to move through a bill this time. If so, that will likely only increase the tension between Dolan and the home state to the Knicks and Rangers. While never fully confirmed, it’s been long thought that the beloved Dodgers might have stayed in Brooklyn had New York been able to sweeten a deal for the team to build a new stadium. Might Dolan move the Knicks and Rangers out of New York? Could there be a ban on liquor at MSG? Will ticket prices be even higher next year? In a year in which both the Knicks and Rangers are expected to make the playoffs for the first time since 2013, fans will have a lot more on their mind this spring than just winning a championship.