Quote:
Originally Posted by Cube Inmate
Leaving the stadium issue aside for a moment, let's assume the Flames owners foot the bill for a new arena by themselves. There's talk that owners go bankrupt when building their own buildings...so is there really even a business case for it?
What increase in revenue, on an annual basis, is needed to offset an initial cost of $450M amortized over (say) 25 years? It depends on the interest rates of course, but even at 0% interest they would need a minimum of $18M more / year (and more likely $25M+ to account for a reasonable interest / investment rate) to break even on a $450M arena.
I assume hockey-related revenues for the Flames are well in excess of $140M / year, given that the league-wide average is around that amount (based on the $70M cap). It seems reasonable to think that the increased ticket costs, luxury boxes, and (non-HRR) additional event revenue could easily add up to an extra $18-25M/year with a state-of-the-art building, especially if they're allowed to build it right next to downtown.
is it really uneconomical for them to pay for their own building? Are my increase-in-revenue assumptions inaccurate? Again, leaving the stadium issue aside--I'm perfectly willing to accept that building a CFL stadium is a money-losing proposition.
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Tough to say. The Flames do not release their financials so we would be guessing at this point. It's easy to claim poor when we cannot actually see how poor one is.
It is also tough to sell the city on an arena when QC and Vegas are going full steam on a 500 million dollar payment just to get a team... I am assuming running a team must be pretty lucrative, but again, just speculation