Quote:
Originally Posted by longsuffering
Complete speculation on my part, but I'll float a prediction of what the Flames proposal might look like based on some media reports.
City portion - 52% ($286 million)
Flames direct portion - 20% ($120 million)
Ticket Tax - 28% ($154 million) - Considered by Flames to be part of their contribution. ALTHOUGH IT IS NOT
Obviously, there would be zero money flowing back to the City from their investment by way of taxes or revenue sharing. Although I expect that CSEC will ultimately agree to some form of rent.
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I'm as pro-city as they come in this debate, but the bolded is 95% wrong. A ticket tax is absolutely a Flames contribution. It's basic economics.
Assuming a $100 ticket with a $10 ticket tax on top, the market price is $110. Its not like the Flames would benevolently reduce ticket prices to $100 if there were no ticket tax. They'd still charge $110. A ticket tax is simply the Flames borrowing against their future revenues.
Now I said 95% for two reasons:
1) There is some truth to the fact that the psychology of the purchaser changes when they see the price as $100+$10 vs $110. So a ticket tax may marginally shift the demand curve. This is the
only way that the argument could be made that a ticket tax, or part of it, is borne by the user (i.e. the fans).
2) If the City fronts the ticket tax loan at an artificially low interest rate, this would represent a transfer of wealth from the city to the Flames (or from whoever the lender is to the Flames). This is the
only way that the argument could be made that a ticket tax, or part of it, is borne by the City.
However those two subtleties pale in comparison to how much of a ticket tax is born by the Flames.