Quote:
Originally Posted by sureLoss
How are you getting $8000?
150 000 000 / 41 home games / 19 000 seats = $192.55 average seat cost for the Flames to generate $150 million in ticket sales.
Which is still relatively high, but the facility fee is supposed to be also collected from Hitmen, Roughneck, and other non CSEC commercial events (i.e. concerts) which I think is part of the projected $150 million. So it is plausible IMO.
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What is the expected outcome. We've been told the tax should generate $150m over 35 years and can't exceed $3m in any of the first 5 years. Assume an inflation escalator of 3% a year and start with a $2.5m number in Year 1. You end up with $2.8m in year 5 and $150m over the life of the deal. Given how well this lines up with the numbers provided to us, this is the expected outcome.
Year 1 - $2.5m in ticket tax
Year 5 - $2.8m in ticket tax
Year 35 - $6.8m in ticket tax
How do you get $2.5m in year 1 assuming a tax of 2% of revenues? Its not hard. Assume 45 nights of flames at $70 per ticket, 50 nights of low revenue sports at $11 per ticket, and 30 nights of concerts at $85 per ticket.
Flames games: $1.26m
Other sports: $0.22m
Concerts: $1.02m
Total: $2.5m
These numbers are actually super conservative and if the CSEC and City work together, there is a ton of upside for both parties.
Can the city actually make money from this venture? Yes, in theory. For example, at 100 nights of concerts and special events per year (instead of 30), the ticket tax revenue jumps to $5m in year one and the present value of the ticket tax actually becomes equal to the City's initial investment. So its unlikely, but if the city goes through a population and economic boom, its somewhat plausible that between ticket price increases and increased special events, the city could do quite well. The city also wins big if it after 35 years, the deal is renewed.