Quote:
Originally Posted by Weitz
Agreed. The "savings" in labor in a down market doesn't equate the lost resources from Oil dropping 60% ish.
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I don't think the owners look at it like "I'm losing money in oil now so I'd better not invest in anything else...." The Calgary Sports and Entertainment Group is a separate entity and is still making money. Costs for the Flames are down as they aren't spending to the cap and all their other teams are all making money except perhaps the Roughnecks although I might be wrong on that. To them, the arena is another investment that must take into account long term projections.
If the arena is built now while oil is low, it costs less to build. When the arena is complete, oil will have rebounded which will give more options for income generation through marketing, etc.
We are talking about multi-millionaires who understand about the cost/benefit analysis surrounding this deal. I'm pretty sure they're aware they will be out of pocket on the building for a few years at least. I don't think they mind too much.