Potential Power of Season Ticket Holders to Keep Flames in Calgary Long-Term?

[Resolute 14]

Of course not. as has been mentioned, it's all posturing. And it was inevitable that the Flames brass would make themselves look as stupid as Katz did when he went touring Hamilton as a veiled threat.

The simplest and best thing we fans can do is simply ignore it. The team and the city will do their thing.

[bizaro86]

Originally Posted by Northendzone

^ the only time STH have power is when they choose not to renew.

it will be interesting to see what is announced over the next couple of weeks, public reaction, timelines etc.

I refuse to believe that a group of guys who made their money here in Calgary and alberta (despite the fact they may have moved for tax reasons) would move or sell the team to a group that would want to move it.

I think Murray Edwards always makes the hyper rational business decision. If he thought moving was the better economic decision, I think he'd do it.

The fact of the matter is, there is no place to move that would be in any way better than here in the Saddledome. I also think it's likely that the Flames paying for 100% of a new arena would be more economic for them than moving.

[Fire]

Originally Posted by bizaro86

I think Murray Edwards always makes the hyper rational business decision. If he thought moving was the better economic decision, I think he'd do it.

The fact of the matter is, there is no place to move that would be in any way better than here in the Saddledome. I also think it's likely that the Flames paying for 100% of a new arena would be more economic for them than moving.

With the expansion fee being $500 million, it's probably save to assume the Flames could sell for $300 million. The cost of a new arena would be at least $250 million. All in US dollars.


Option 1: Paying for the arena and staying. Life of new arena 30 years.

Costs: $250 million (minimum)

Average Operating Income /yr : $30 million (maybe optimistic given the current economic climate, but also adjusting for future inflation)

Total income: $900 million

Net Profit after 30 years: $650 million

This is probably on the very high side of what the Flames owners could expect and in 30 years they would need to build another arena. Which would probably cost more than $650 million to build.

Option 2: Selling the team for $300 million

Invest the $300 million and re-invest any profits the following year.

5% return over 30 years: $1.3 billion
7% return over 30 years: $2.28 billion
10% return over 30 years: $5.2 billion

Even at the conservative 5% they are making double the money if they just sell the Flames and invest it.

[bizaro86]

At the end of 30 years, the team will still be extremely valuable, which you haven't included in option 1. Based on past appreciation of sports franchises and inflation, it could easily be worth multiple billions by then. It will definitely still be worth $500 MM.

[bcneil]

Originally Posted by bizaro86

At the end of 30 years, the team will still be extremely valuable, which you haven't included in option 1. Based on past appreciation of sports franchises and inflation, it could easily be worth multiple billions by then. It will definitely still be worth $500 MM.

Oh good I was thinking the same thing. Yeah this team....or any team could be worth a fortune in 30 years. The team could increase in value at a similar rate to the stock market over that time 5-10% a year. The 30 million a year revenue, is like a really good dividend too.

[Fire]

Originally Posted by bizaro86

At the end of 30 years, the team will still be extremely valuable, which you haven't included in option 1. Based on past appreciation of sports franchises and inflation, it could easily be worth multiple billions by then. It will definitely still be worth $500 MM.

You're right I should have included the value of the franchise in option 1. Hard to predict the value of the franchise in 30 years. With the eventual death of cable TV all pro leagues might be taking a big hit in the future, but who knows the exact impact.

[Weitz]

Something tells me in 30 years pro sports won't be nearly as lucrative.

[bizaro86]

Originally Posted by Weitz

Something tells me in 30 years pro sports won't be nearly as lucrative.

If you really believe that, the Atlanta Braves are publicly traded and can be shorted.

While cable TV rights probably won't continue to pay the freight, I wouldn't be surprised to see Netflix/Amazon prime bidding for live streaming rights to sports events.

[Strange Brew]

Originally Posted by bizaro86

If you really believe that, the Atlanta Braves are publicly traded and can be shorted.

While cable TV rights probably won't continue to pay the freight, I wouldn't be surprised to see Netflix/Amazon prime bidding for live streaming rights to sports events.

Short the stock based on a 30 year horizon regarding the decline of pro sports. Any other stock tips?

[bizaro86]

Originally Posted by Strange Brew

Short the stock based on a 30 year horizon regarding the decline of pro sports. Any other stock tips?

Fair enough, but I think the decline of pro sports values is a pretty non-consensus opinion. If it was mine, I'd be looking for a way to make money on it.

As long as the supply of franchises is limited, and there are lots of rich dudes who want to own them, prices will continue to rise.