Calgary city council approves arena deal (UPD: new deal upcoming?)

[muddywaters]

That changes nothing. The city can limp along with the Saddledome. It's not ideal but there are more important things to spend our money on.

If the Flames don't like it they know what to do. If private citizens are desperate for a new arena they can share the expense with the Flames.

Private citizens do share the expense with the Flames in the form of season ticket holders and I'm not sure but I would think there is a Ticket Tax also .... so the user fee paid by private citizens who attend Hockey and all other events do contribute .... and the city also benefits by all the tax revenue generated by the entertainment district .... it's a win win IMO ...

 

[Mike Jones]

Private citizens do share the expense with the Flames in the form of season ticket holders and I'm not sure but I would think there is a Ticket Tax also .... so the user fee paid by private citizens who attend Hockey and all other events do contribute .... and the city also benefits by all the tax revenue generated by the entertainment district .... it's a win win IMO ...

The ticket tax is a paltry 2% and nowhere near what we need. Edmonton's ticket tax is 6% and that's closer to what we need.

The private investors I'm thinking of are those who can afford way more than season ticket prices. There's one local, in particular, who's a minor owner in another NHL organization and he can easily sell his share in that team and fork over whatever the Flames need for their new arena.

 

[K1984]

With all these rich people sitting around that could make a killing privately funding an arena its a wonder not a single one of them has done it yet.

 

[powerstuck]

It's in the teams owners best interest to try and involve the goverment (federal, provincial and at city levels) to get what ever leverage they can. Of course in the end, they may have to do it themselves. I don't see the Flames moving because there is not a market that can do as good or better financially as Calgary is that is currently without a team.

Before Seattle joined the league, I guess you could have considered them a solid candidate, but not anymore. Portland is too much of political work to get into that arena and Houston is still just a dream.

Besides, if folks consider a valid argument that Coyotes cannot move to Quebec because there would be too many Eastern teams and there is no way to move Columbus and/or Detroit to West, then the same argument is just as valid for Calgary.

 

[blueandgoldguy]

The IG Field issue in Manitoba is under heavy litigation and will be for years. They had to redo all the concourse concrete within 2 years of opening and the government wrote off the loans involved at a cost of almost $175 million.

The sale of the old property was a complete mess and it sat vacant for years so no tax revenue as anticipated. The City of Winnipeg ended up paying almost $5 million to demolish the arena and then sold the land for less.

It was not a great moment for taxpayers, and the biggest issue from the get-go was an attempt to hide the actual cost of the building and being cheap. The majority would have been fine with a transparent process to get a stadium for a community-owned asset.

Going further, with all the upgrades/repairs the new stadium ended up costing approx. $240 million.

 

[BigZ65]

Going further, with all the upgrades/repairs the new stadium ended up costing approx. $240 million.

Actually $245 million plus financing costs of a bunch of crappy loans Triple B (really the Bombers) took out with CIBC at above prime interest, plus the result of any litigation. Triple B only has to pay off about $70 million as the current provincial government wrote down the rest. The builders are seeking quite a bit as they covered work that had to be done to get the building operational which Triple B refused to pay for. There's a litany of suits and countersuits from Triple B and Stuart Olson Dominion (builders). My sense is that Triple B is in a bit of a mess once it gets in front of a judge.

 

[blueandgoldguy]

Actually $245 million plus financing costs of a bunch of crappy loans Triple B (really the Bombers) took out with CIBC at above prime interest, plus the result of any litigation. Triple B only has to pay off about $70 million as the current provincial government wrote down the rest. The builders are seeking quite a bit as they covered work that had to be done to get the building operational which Triple B refused to pay for. There's a litany of suits and countersuits from Triple B and Stuart Olson Dominion (builders). My sense is that Triple B is in a bit of a mess once it gets in front of a judge.

Yes, the deal originally conceived that would see the Bombers pay $4.5 million or so per year to cover their portion of the stadium cost and interest for decades was overly optimistic to put it mildly, and would have only occurred if the national tv contract increased significantly along with league revenues...which, of course, never happened. While the Bombers still have to make annual payments on the stadium, it is less than half of the original amount agreed upon as the province wrote off the debt, as you stated.

In the end, that original deal was just window dressing from the previous government to make it appear more palatable to the public.

 

[Mike Jones]

With all these rich people sitting around that could make a killing privately funding an arena its a wonder not a single one of them has done it yet.

Rich people like using other peoples' money to make money for themselves. It's Capitalism 101. It's in Art of the Deal or one of those other business books. In this case here they want to use public money to load their pockets. And it almost worked. It still might if our city council is as weak and cognitively challenged as I think it might be.

If and when the city officially and finally turns off the tap you'll see the rich people crawl from the sewers and reluctantly open their pockets. Or reach into the pockets of banks and other financial partners - which is what should be happening here in Calgary. Let the financial class duke it out while we spend our tax dollars on emergency services and trying to find sustainable solutions to our homeless situation.

 

[CorbeauNoir]

If and when the city officially and finally turns off the tap you'll see the rich people crawl from the sewers and reluctantly open their pockets

Or leave. That's been a fashionable option for the rest of the financially-influencial entities in this city after all.

 

[BKIslandersFan]

It's in the teams owners best interest to try and involve the goverment (federal, provincial and at city levels) to get what ever leverage they can. Of course in the end, they may have to do it themselves. I don't see the Flames moving because there is not a market that can do as good or better financially as Calgary is that is currently without a team.

Thats what SuperSonics fans said before NBA took em out of Seattle to OKC.

 

[voyageur]

Thats what SuperSonics fans said before NBA took em out of Seattle to OKC.

Except the NHL literally has a team mired in debt, $300 000 000 of debt, with no home for next year. That's problem #1. Problem #2 is the eccentric owner in Ottawa, that nobody wants to do business with. Problem #3 could be Calgary, but I guarantee you Calgary in their old arena is closer to a profit than the Panthers in Sunrise, whose owners negotiated an out clause for 2024. Let's throw Terry Pegula in Buffalo in there.
And what happens to Columbus when their owner passes on?

 

[Mike Jones]

Or leave. That's been a fashionable option for the rest of the financially-influencial entities in this city after all.

Rich people are going to leave if the Flames leave?

Doubt it. If the team leaves the money spent on NHL stuff stays so the rich will want to stick around to grab that. Papa's gotta pay for that desperately needed third house.

 

[BKIslandersFan]

Except the NHL literally has a team mired in debt, $300 000 000 of debt, with no home for next year. That's problem #1. Problem #2 is the eccentric owner in Ottawa, that nobody wants to do business with. Problem #3 could be Calgary, but I guarantee you Calgary in their old arena is closer to a profit than the Panthers in Sunrise, whose owners negotiated an out clause for 2024. Let's throw Terry Pegula in Buffalo in there.
And what happens to Columbus when their owner passes on?

I heard while Panthers themselves aren’t profitable, the arena itself is though.


I don't think Flames are moving but outside Original 6 and probably LA and Vancouver are not exempt.

 

[CorbeauNoir]

Rich people are going to leave if the Flames leave?

Doubt it. If the team leaves the money spent on NHL stuff stays so the rich will want to stick around to grab that. Papa's gotta pay for that desperately needed third house.

And they'll be buying it in Houston instead of in Alberta. The city's tax spine has been vacating downtown and getting the hell out of Canada altogether by artificially imposed federal decree, and the best solution that can be thought up to refill that massive gulf of abandoned real estate is awkwardly retrofitting buildings for people who pay little to nothing in taxes. The Flames are an effect of Calgary's economic death spiral, not a cause.

 

[Mike Jones]

And they'll be buying it in Houston instead of in Alberta. The city's tax spine has been vacating downtown and getting the hell out of Canada altogether by artificially imposed federal decree, and the best solution that can be thought up to refill that massive gulf of abandoned real estate is awkwardly retrofitting buildings for people who pay little to nothing in taxes. The Flames are an effect of Calgary's economic death spiral, not a cause.

Our economy has problems but it is far from being a death spiral. Let the Flames go if they think they can do better in Houston. We have a responsibility to call their bluff and not give in to their insane, irrational demands for revenue, free rent and tax cuts. If anything, their demands add to our problems because we aren't recovering any revenue or taxes from them. Houston's loss is our gain.

 

[StreetHawk]

Our economy has problems but it is far from being a death spiral. Let the Flames go if they think they can do better in Houston. We have a responsibility to call their bluff and not give in to their insane, irrational demands for revenue, free rent and tax cuts. If anything, their demands add to our problems because we aren't recovering any revenue or taxes from them. Houston's loss is our gain.

Everything comes down to arena agreements that are currently in place in cities with an nba team.

2 options when it comes to relocation.

1) owners move the team and retain ownership. So, question is whether houston, Portland, Atlanta, etc. Whatever landing spot you want would the flames get any better deal than just their game day revenue and could they survive in just that like the Celtics and 76ers of the NBA do given that the NHL is a much more gate driven league? Or would another party that is not the nba owner willing to buy the team and basically be a tenant? Does that work?

2) owners sell the team and they get moved to a new city. Main issue is what the flames owners could get for the team and what it would cost the new owner. In Houston, Fertita wants a nhl team for a deal so doubt the flames owners want to sell for a discount. Atlanta arena is a top 10 most used arena in the US, so does it make sense to give up 45 dates or more for an nhl club at the market rate for an nhl team? Unless they truly want an nhl team, May just come down to economics for them. Portland, their arena was up in 2005 and they never seemed interested in the nhl. And Jody Allen was a key part of the building of the Moda Center. If it had made sense to go after an nhl team I think they would have applied for the late 90’s expansion team. Doubt anything has changed on their end since Paul’s passing.
So can the flames owners get the price they want and is that price something that someone wishes to pay them plus any relocation fees.

All this vs what it costs them to get an arena done in Calgary. What makes more sense? Calgary was listed as 18th most valuable per Forbes. New arena likely puts them into the top 15 I would guess.

 

[Mike Jones]

All this vs what it costs them to get an arena done in Calgary. What makes more sense? Calgary was listed as 18th most valuable per Forbes. New arena likely puts them into the top 15 I would guess.

Only if they pay for, build, own and maintain that arena themselves.

 

[StreetHawk]

Only if they pay for, build, own and maintain that arena themselves.

As every pro sports team should do.

 

[voyageur]

I heard while Panthers themselves aren’t profitable, the arena itself is though.


I don't think Flames are moving but outside Original 6 and probably LA and Vancouver are not exempt.

Is that why they had to get Broward to subsidize their losses on hockey ops? Is that why the county talked about razing the arena at one point during the negotiations?

I think I counted 10 shows on the arena calendar other than Disney on Ice for 2022. That's an area that relied heavily on tourism for profitability, and this pandemic is wreaking havoc with tourism.

I'd say that the pandemic is going to create financial difficulties for at least a quarter of the NHL's franchises, maybe up to a third. And only one market is beating the door down to get in.

 

[TheLegend]

Is that why they had to get Broward to subsidize their losses on hockey ops? Is that why the county talked about razing the arena at one point during the negotiations?

I think I counted 10 shows on the arena calendar other than Disney on Ice for 2022. That's an area that relied heavily on tourism for profitability, and this pandemic is wreaking havoc with tourism.

I'd say that the pandemic is going to create financial difficulties for at least a quarter of the NHL's franchises, maybe up to a third. And only one market is beating the door down to get in.

Considering Quebec province isn’t pandemic proof either (Montreal already had one game with no fans allowed) using it as a basis for your argument is quite foolish.

 

[voyageur]

Considering Quebec province isn’t pandemic proof either (Montreal already had one game with no fans allowed) using it as a basis for your argument is quite foolish.

That was actually doing Montreal fans a favour. Let's face it, there is a city with an arena built, a government that wants a team, and the finances to buy a team. There's a hell of a lot more events scheduled for Centre Videotron in 2022 than in Sunrise or in Glendale (correction there's more event than I expected at Gila River), and there is a junior hockey team that would play out of the same arena, so that's a lot of arena revenue. Not sure what is foolish about that. Maybe you can enlighten me.

 

[BKIslandersFan]

Is that why they had to get Broward to subsidize their losses on hockey ops? Is that why the county talked about razing the arena at one point during the negotiations?

I think I counted 10 shows on the arena calendar other than Disney on Ice for 2022. That's an area that relied heavily on tourism for profitability, and this pandemic is wreaking havoc with tourism.

I'd say that the pandemic is going to create financial difficulties for at least a quarter of the NHL's franchises, maybe up to a third. And only one market is beating the door down to get in.

"Under what's proposed, of the $86 million, the Panthers organization would have to spend $1.5 million drawing a "high impact event,'' $39 million on capital improvements at BB&T Center, and $45.5 million on operating costs like the electricity bill. None of the money would go toward the hockey team side of the business."
Although maybe this indicates arena isn't that profitable I guess.

I don't think thats true. American teams been selling full capacity and they aren't gonna go back to limited or no attendance.

 

[StreetHawk]

"Under what's proposed, of the $86 million, the Panthers organization would have to spend $1.5 million drawing a "high impact event,'' $39 million on capital improvements at BB&T Center, and $45.5 million on operating costs like the electricity bill. None of the money would go toward the hockey team side of the business."
Although maybe this indicates arena isn't that profitable I guess.

I don't think thats true. American teams been selling full capacity and they aren't gonna go back to limited or no attendance.

The BB&T Arena is competing with the Heat's arena located in South Beach for events which is under an hour drive away. They do better than Glendale vs the Suns Arena, but it's far from a 50/50 split of non sporting events between the 2 venues.

 

[TheLegend]

That was actually doing Montreal fans a favour. Let's face it, there is a city with an arena built, a government that wants a team, and the finances to buy a team. There's a hell of a lot more events scheduled for Centre Videotron in 2022 than in Sunrise or in Glendale (correction there's more event than I expected at Gila River), and there is a junior hockey team that would play out of the same arena, so that's a lot of arena revenue. Not sure what is foolish about that. Maybe you can enlighten me.

You had a chance 5 years ago.

You're arena was paid for with taxpayer money. You're looking to buy a team in the cheap because it's the only way that market would make financial sense.

 

[voyageur]

You had a chance 5 years ago.

You're arena was paid for with taxpayer money. You're looking to buy a team in the cheap because it's the only way that market would make financial sense.

I never had a chance.

A market that draws 18 000 fans at a good price point makes a lot of sense, no matter how you dice it. If you think in context that Winnipeg brings in more gate receipts than a franchise like Nashville or Carolina, in a normal year, because of the cost of being the prime ticket in town, add 3 000 fans to Winnipeg's revenue and subtact around $10 for the avg. Wpg ticket (conceivably lower, probably closer to Alberta teams), that's the potential for more revenue than those markets, as a marker. It's not the top end, which the NHL doesn't want to drive up disparity, it's a market that fits the middle to bottom end of the spectre, in being profitable enough to not rely on revenue sharing.

That's a win for the NHL, and the Nordiques-Canadiens rivalry is a win for hockey in Quebec, a province that might get you well over a million viewers for a game, which is bigger than most if not all US matchups. So there a lot of sense in locating there, that's hard to argue.