Quote:
Originally Posted by Weitz
I don't think so. If the flames are involved and paying a good portion of it - they will see big gains in Revenue. Or they won't do it.
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I totally disagree. I think the flames do it if the NPV of the deal is $0, but they have a new arena at the end. Then it’s uo to them to justify fans to pay more because of food product and a good fan experience.
Why should they get a new arena and more profits? That seems a ludricrous starting point.
To be more clear:the expected returns the flames need totally depends on when the flames pay money. Paying money now means they have to make a Future return, and the discount rate they’ll need is way more than the city would use.
So flames Paying less (or none now) means there is no investment to recoup. They just get a new arena. The flip side is the city gets a lot of the future upside.