Quote:
Originally Posted by Frequitude
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.
|
Bang on. I will mention that there will be a ticket tax for non-flames events so I'm not sure it is ENTIRELY their revenue, but in principal, I agree.
Frankly, the real way this could be funded is entirely through a ticket tax. Perhaps the city puts up the capital and then backstops it on a ticket tax and locks the flames into a 35 year lease. That would be a truly "user pay" system and frankly probably the fairest way to do it. It will never happen though.