Quote:
Originally Posted by Joborule
When your cap in revenue is middle tier of NHL teams current revenue, with no room to grow, it's not sustainable, or at the least financially ideal since you have little room for error in financing the team. Increasing capacity allows them to expand their revenue potential which they could be taking advantage of right now since fan support is near it's peak. They're leaving millions on the table. No matter who owns the team, they're not gonna be content with just enough if there's another option to bring in more dough; allowing for more breathing room when times are tougher, or when they need to spend a lot of money (such as in free agency to bring players in).
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MTS is designed so that the tougher times aren't as hard. 15,000 seats in lean times are easier to fill than 18,000 which means they can charge more while paying less to operate it. It also maximizes the revenue from non-hockey events, which means that even if the Jets aren't making as much money, TNSE can still make up the difference elsewhere.
But sure, let's say that 10 years after building MTS they've paid it off and decide they don't want to secure any more capital and want to take on the costs because of 3,000 more seats for a mere $300M. Those 3,000 seats are going to be the cheapest but hey, times are good, let's assume they'll go for $50 each. Let's also assume that each of those fans will spend $30 at each game because again, times are good. That's only like 3 beers and a hot dog anyway. So in a mere 30 seasons of peak fan support, the team can look to have those 3,000 seats justify the cost of building a new arena, which will be about the time they'll have to start looking at building the replacement. This also ignores the operational costs of those extra seats as well as the interest on the construction costs. Not to mention a bigger arena brings with it a bigger footprint and a higher value so a few more property tax dollars as well. MTS is already an arena designed on revenue maximization for it's size, so this isn't even a Saddledome or Rexall situation. If MTS was still under construction or in it's early phases and an NHL team was coming back and they could say 'hey, it will cost a bit more to add about 1500-2000 seats but it could be better in the long run' it would be one thing. But the arena is built and only ten years old and making money that doesn't need to go to financing the construction anymore, which means more profit.
Plus TNSE would need to find and buy the land which could be tough in Winnipeg since the SHED is pretty much based around an arena so the city (and province) wouldn't be too helpful in any bid that isn't in a prime downtown location to keep that dream alive. Since few cities can justify multiple large-venues, you also need to take into account what to do with MTS when you move out. The cost of re-purposing it would not be cheap either, this would be a lot of money TNSE is committing to after spending so much on the team already, which will leave them with absolutely no breathing room and certainly very little disposable cash for free agents.
Any suggestion for them to build an arena within the next twenty years is a stupid one, plain and simple.