[News] Bettman urges new arena ASAP

[Addick]

Originally Posted by Enoch Root

It's all about substitution.

Calgarians went to 41% as many concert-seats as Edmontonians did. So what are the implications?

1) Calgarians aren't as interested in concerts and just don't spend as much money on entertainment (that seems very unlikely)
2) Calgarians are substituting other things instead of concerts (the libarary, the zoo?)
3) Calgarians are going elsewhere for concerts, such as Edmonton, Vancouver, Phoenix and Las Vegas.

#3 is both the most likely explanation, and - by a mile - the worst, because if they are going to other cities to see concerts, they aren't just spending their concert money elsewhere, they are also attending bars and restaurants, spending travel dollars, shopping, etc.

You are making two assumptions:

1. People are choosing the most expensive and time-consuming alternative.
2. People have a set budget for entertainment.

If people choose to attend concerts elsewhere, it would be difficult to imagine them going every week. It would be just as difficult to imagine travelling concert goers doing absolutely nothing locally in terms of entertainment between trips. Would they go out less than before? Most likely. Do nothing at all? Doubtful.

When you start to consider how many people can actually afford to attend concerts elsewhere and the fact that not all concerts bypass Calgary, does the cost benefit still look as good? At that point, does funding micro-initiatives to increase the supply of local entertainment options begin to compete?

If after considering all of this it is determined that Calgary needs a new facility and it cannot be built by the private sector, the City should step in a fill a role that the private sector cannot play. A local company like CSEC could then manage the facility for a percentage of the revenue generated by the public investment.

[Regorium]

Originally Posted by Enoch Root

It's all about substitution.

Calgarians went to 41% as many concert-seats as Edmontonians did. So what are the implications?

1) Calgarians aren't as interested in concerts and just don't spend as much money on entertainment (that seems very unlikely)
2) Calgarians are substituting other things instead of concerts (the libarary, the zoo?)
3) Calgarians are going elsewhere for concerts, such as Edmonton, Vancouver, Phoenix and Las Vegas.

#3 is both the most likely explanation, and - by a mile - the worst, because if they are going to other cities to see concerts, they aren't just spending their concert money elsewhere, they are also attending bars and restaurants, spending travel dollars, shopping, etc.

And that's the multiplier effect. It's impossible to quantify. But suggesting it doesn't exist is just silly.

You must think you are literally the only person in the entire world that knows what a multiplier effect is.

For the last time it does not matter if you bring an extra 200,000 tickets in a year for which the city is going to see a couple million in revenue, with a couple million more in businesses around it (sidenote: arenas do not generate businesses around them, but let's assume they do), when you spend a billion dollars to do it.

If you spent the billion dollars to build condos, plazas, music halls (east village), you will see a much much much larger multiplier effect than an arena with a few extra concerts.

If your end game is jobs, spending the billion dollars to attract some tech company to move to Calgary will be cheaper and more effective than the arena.

The arena is basically the worst economic choice in every single way when considering the opportunity cost. However, the social and emotional benefits of having an NHL team may outweigh the horrible economic cost. That's for the city (and us) to decide, but don't try to argue economic benefits when it's basically been proven over and over that there are none.

[Enoch Root]

Originally Posted by Addick

You are making two assumptions:

1. People are choosing the most expensive and time-consuming alternative.
2. People have a set budget for entertainment.

I make no such assumptions

If people choose to attend concerts elsewhere, it would be difficult to imagine them going every week. It would be just as difficult to imagine travelling concert goers doing absolutely nothing locally in terms of entertainment between trips. Would they go out less than before? Most likely. Do nothing at all? Doubtful.

At no time did I ever suggest 'every week'. No idea what your point is there. And at no time did I ever suggest they would do nothing locally at all - you answered your own point when you realized they would do less (that is the whole point).

When you start to consider how many people can actually afford to attend concerts elsewhere and the fact that not all concerts bypass Calgary, does the cost benefit still look as good? At that point, does funding micro-initiatives to increase the supply of local entertainment options begin to compete?

Again, impossible to quantify. But the fact that there were only 41% as many seats sold at the Dome as at Rexall (thus referring to the big-name, big dollar concerts) suggests there is substantial demand being missed. And can not all people afford Vegas or whatever? Of course. But the problem is that the people that can afford it are people who have larger entertainment budgets. In other words, you're losing the customers that can spend the most money.

If after considering all of this it is determined that Calgary needs a new facility and it cannot be built by the private sector, the City should step in a fill a role that the private sector cannot play. A local company like CSEC could then manage the facility for a percentage of the revenue generated by the public investment.

Not everyone will go to another city to see concerts. Obviously, some people will simply spend their entertainment dollars here, doing something else.

But anything who thinks there isn't a bleed on the economy - and a pretty substantial one - is just ignoring the facts.

[Enoch Root]

Originally Posted by Regorium

You must think you are literally the only person in the entire world that knows what a multiplier effect is.

For the last time it does not matter if you bring an extra 200,000 tickets in a year for which the city is going to see a couple million in revenue, with a couple million more in businesses around it (sidenote: arenas do not generate businesses around them, but let's assume they do), when you spend a billion dollars to do it.

If you spent the billion dollars to build condos, plazas, music halls (east village), you will see a much much much larger multiplier effect than an arena with a few extra concerts.

If your end game is jobs, spending the billion dollars to attract some tech company to move to Calgary will be cheaper and more effective than the arena.

The arena is basically the worst economic choice in every single way when considering the opportunity cost. However, the social and emotional benefits of having an NHL team may outweigh the horrible economic cost. That's for the city (and us) to decide, but don't try to argue economic benefits when it's basically been proven over and over that there are none.

1) the city is not being asked to spend a billion dollars

2) the city does not spend money on condos. However, condos are a terrible example for the argument you are trying to make because they are one of the strongest examples of replacement - if it isn't built here, it will be built elsewhere, because the number of condos built will reflect overall demand, regardless of where they are built. Plazas will be built where the demand is - like near a new downtown arena, for example. And they aren't something the city needs to be involved in regardless.

3) I would love to here how you think music halls create more of a multipler than an arena does.

4) agree that attracting new businesses to Calgary is the best way to create jobs. This is not an either/or issue here, however. Also, as you suggested, having new facilities can only increase your success rate for attracting new businesses.

5) Your hyperbole in the final paragraph is ridiculous. I never argued that an arena is the greatest investment a city could make. I am simply arguing against the people that say there is no multiplier effect. There most certainly is.

[Gaudfather]

Shouldn't there be some sort of linkage between the franchise value and the proposed new stadium.

If it is fair for Calgary Sports and Entertainment (CSE) to ask the City of Calgary for some major help in financing a new stadium proposal, then why shouldn't the City have some of the upside in the resultant increase in franchise value (if there is any).

Forbes put the value of the Flames at US$435 million as of Nov 2015 - so use that as a base. If the city assists CSE in financing a new stadium ( either Calgary Next or some revised proposal) then it seems only fair they should share in any incremental increase in franchise value. Say in 2025 the Flames are sold and then valued at US$735 million - then there should be some mechanism where 50% of the increased franchise value ( in this example US$150 million) would revert back to the City of Calgary.

CSE should not have it both ways in having the City of Calgary finance and own the new arena and yet CSE keeps 100% of any resulting increase in franchise value. And the City would not have to have ownership rights in the franchise to accomplish this - their are other structures such as a modified income debenture that could be used to repay the City part of the increment in franchise value.

[Kavvy]

Flames shouldn't get free/cheap rent. If they want free rent, pay for the entire facility (not a portion), purchase the land, pay tax on the expensive land they have purchased, and contribute to road / transit upgrades to handle to increase traffic as per other private examples. Otherwise, they should be charged rent which includes operating costs and profit for whoever owns the facility.

Oh and because of city leverage -as in that new facility will be one of the kind in the city, and the only facility which can host this asset for the flames, that rent should be high as hell. This would apply for any other for profit industry. Otherwise, threaten to leave, I used to care, I really did... now... not so sure anymore.

What a scam we are being sold.

[Joborule]

Originally Posted by Kavvy

This argument gets used again and again. While I do see the odd major concert, am I the only one who doesn't give a rats @ss if this is one area Edmonton leads us in?

Spend the money on LRT, roads, etc over getting a few more concerts every year.

This is not a response in agreement or disagreement in both this post and the funding in the arena in general; it's more of a comment. But concerts in a major aspect of culture, and I think it's important that Calgary matches up to Edmonton in regards to encouraging the younger demographic to live in Calgary rather than up in Edmonton. There's benefits in having concerts not skip Calgary but group north.

Again, just a comment, there's much more factors in place in regards to people lifestyle and the city that best accommodates them.

[RougeUnderoos]

Originally Posted by Enoch Root

1) Calgarians aren't as interested in concerts and just don't spend as much money on entertainment (that seems very unlikely)

This bold part is actually true and is known in the music business. It was true long before we started to hear that the Saddledome "can't handle" some big concerts. It doesn't mean we don't spend as much money on entertainment though.

Populations and cities are different. Don't know why this would be considered "very unlikely".

[Kavvy]

Originally Posted by Joborule

This is not a response in agreement or disagreement in both this post and the funding in the arena in general; it's more of a comment. But concerts in a major aspect of culture, and I think it's important that Calgary matches up to Edmonton in regards to encouraging the younger demographic to live in Calgary rather than up in Edmonton. There's benefits in having concerts not skip Calgary but group north.

Again, just a comment, there's much more factors in place in regards to people lifestyle and the city that best accommodates them.

That's a fair point.

[corporatejay]

Originally Posted by Enoch Root

It's all about substitution.

Calgarians went to 41% as many concert-seats as Edmontonians did. So what are the implications?

1) Calgarians aren't as interested in concerts and just don't spend as much money on entertainment (that seems very unlikely)
2) Calgarians are substituting other things instead of concerts (the libarary, the zoo?)
3) Calgarians are going elsewhere for concerts, such as Edmonton, Vancouver, Phoenix and Las Vegas.

#3 is both the most likely explanation, and - by a mile - the worst, because if they are going to other cities to see concerts, they aren't just spending their concert money elsewhere, they are also attending bars and restaurants, spending travel dollars, shopping, etc.

And that's the multiplier effect. It's impossible to quantify. But suggesting it doesn't exist is just silly.

I will get roasted for this by a certain segment of the poster-base but pretty much everyone I know does the majority of their 'concerting' in Vegas and Phoenix.

Obviously that's anecdotal. And obviously, that doesn't represent everyone. And of course, people would still do some of that even if we had more top concerts here. But the bottom line is that some of that money would stay in the city, pay taxes here, fill our restaurants, etc.

People can glibly say "I don't care if we are missing concerts" (and I don't go to concerts anymore, personally), but to suggest it doesn't affect he city, and to suggest we aren't losing entertainment revenue, restaurant and bar revenue, and significant local tax revenue, is flat out blind denial.

To the bold: the extra taxes means more city revenue for all those things you want

Except Phoenix, Vancouver and L.A. aren't our competition. Those cities get bigger and more shows because they are significantly bigger metropolis' and are on the "concert" route. (Vancouver being on the coast is more palatable to do the coastal tour).

The only city that we should be comparing ourselves to is Edmonton, and although it sucks we get less, I'm not sure the 4 concerts a year justify it.


Stadiums are even more ridiculous, I suspect we miss 1/2 shows a year MAX, that commonwealth gets (even then, we might split with them, no one is going to play both). Stadium tours are pretty rare these days.

[Addick]

Originally Posted by Enoch Root

At no time did I ever suggest 'every week'. No idea what your point is there. And at no time did I ever suggest they would do nothing locally at all - you answered your own point when you realized they would do less (that is the whole point).

I didn't say that you suggested people will leave Calgary every week to attend a concert. I was making the point that people will still spend money in Calgary and we need to identify the gap between: a) the amount of money they would spend if Calgary could host more concerts; and b) the amount of money they spend when Calgary cannot host these concerts. It's important as this gap may not be gaping.

Originally Posted by Enoch Root

Again, impossible to quantify. But the fact that there were only 41% as many seats sold at the Dome as at Rexall (thus referring to the big-name, big dollar concerts) suggests there is substantial demand being missed. And can not all people afford Vegas or whatever? Of course. But the problem is that the people that can afford it are people who have larger entertainment budgets. In other words, you're losing the customers that can spend the most money.

While there is definitely unmet demand for entertainment in the form of concerts, it is important to consider how much of this demand is being met by other forms of entertainment. It goes back to the gap I mentioned above.

Originally Posted by Enoch Root

Not everyone will go to another city to see concerts. Obviously, some people will simply spend their entertainment dollars here, doing something else.

But anything who thinks there isn't a bleed on the economy - and a pretty substantial one - is just ignoring the facts.

What facts are you using to prove that there is a major bleed? We all know that Rexall is doing much better than the Dome but are other forms of entertainment in Calgary seeing an increase in patronage more than the any increase seen in Edmonton during the period where the Saddledome has fell behind?

[Enoch Root]

Originally Posted by RougeUnderoos

This bold part is actually true and is known in the music business. It was true long before we started to hear that the Saddledome "can't handle" some big concerts. It doesn't mean we don't spend as much money on entertainment though.

Populations and cities are different. Don't know why this would be considered "very unlikely".

How is it 'known'?

And again, let's look at the numbers: 376k vs 154k. Even if your premise is true, I highly doubt it's true to the extent necessary to explain those numbers.

No one is going to claim that the difference in the numbers is 100% due to the venue. But the discrepancy is so massive that it is pretty safe to assume venue is a big component.

[Enoch Root]

Originally Posted by Addick

What facts are you using to prove that there is a major bleed? We all know that Rexall is doing much better than the Dome but are other forms of entertainment in Calgary seeing an increase in patronage more than the any increase seen in Edmonton during the period where the Saddledome has fell behind?

As I have said multiple times, these things are very difficult to prove one way or the other, because no one says "well, I didn't go to a concert this month so I am going to go see a play".

All we can do is ask ourselves, how would I react? how do others react?

I know that, for my friends, the concert substitution is Vegas and Phoenix. I have no doubt that there are all kinds of other substitutions, many of which are here in town.

But I can throw the same question back to you: can you demonstrate any increased patronage in Calgary for other entertainment choices, compared to Edmonton?

I don't doubt that there are some. But the referenced numbers are huge. And concerts are big dollars - both direct and indirect. Unless someone can demonstrate other forms of entertainment here in town that are benefitting massively from the lack of concert attendance, it's probably pretty safe to conclude that the bleed is fairly significant.

[Traditional_Ale]

Just wanted to make the point that Edmonton has after-hours clubs, raves, and such. In Calgary everything shuts down at 2am. We're losing a lot of potential income by not having after-hours.

[RougeUnderoos]

Originally Posted by Enoch Root

How is it 'known'?

Same way other things are known—people know them. People know to put Edmonton on the schedule because in Edmonton, you sell tickets and t-shirts. It's not a secret or a mystery. It's a different town, and in different towns, people do different things.

Originally Posted by Enoch Root

And again, let's look at the numbers: 376k vs 154k. Even if your premise is true, I highly doubt it's true to the extent necessary to explain those numbers.

No one is going to claim that the difference in the numbers is 100% due to the venue. But the discrepancy is so massive that it is pretty safe to assume venue is a big component.

The "premise", such as it is (it isn't really a premise at all), is just part of the conversation. Take it or leave it, I guess.

[getbak]

Looking at the events calendar on the Saddledome's website, these are all the concerts that played the Saddledome in 2015:

1. Bryan Adams - Jan 16
2. Tragically Hip - Feb 9
3. Nickelback - Mar 12
4. Eric Church - Apr 11
5. Def Leppard - Apr 22
6. OneRepublic - Apr 30
7. Neil Diamond - May 2
8. Imagine Dragons - Jun 5
9. Ed Sheeran - Jun 17
10. Blake Shelton - Jul 10
11. Jason Aldean - Jul 11
12. Stevie Wonder - Jul 12
13. Rush - Jul 15
14. Mumford & Sons - Aug 12
15. Foo Fighters - Aug 13
16. Nicki Minaj - Aug 18
17. Janet Jackson - Sep 2
18. Shania Twain - Sep 17 & 18
19. Paul Brandt & Dean Brody - Oct 2
20. Kelly Clarkson - Oct 12
21. Slipknot - Oct 16
22. Miranda Lambert - Oct 19
23. Kevin Hart - Nov 23
24. The Weeknd - Nov 29
25. Motley Crue - Dec 13

With two Shania shows, that's 26 concerts during the year (I don't know if Kevin Hart counts as a concert under those numbers, but I'd think it does). If the 154,183 number is accurate, that's an average of under 6,000 tickets sold per show.


I went to two of those shows -- Rush and Foo Fighters. Foo Fighters was a sellout, about 12,500 people. Rush wasn't quite a sellout, but it was still pretty full. It was definitely more than 6,000.

I can't speak on the shows I didn't attend, but if that 150,000 number is accurate, there must have been some shows that were virtually empty.

[jayswin]

Originally Posted by getbak

Looking at the events calendar on the Saddledome's website, these are all the concerts that played the Saddledome in 2015:

1. Bryan Adams - Jan 16 - 10k
2. Tragically Hip - Feb 9 - 10k
3. Nickelback - Mar 12 - 10k
4. Eric Church - Apr 11 - 12500
5. Def Leppard - Apr 22 - 8500
6. OneRepublic - Apr 30 - 10k
7. Neil Diamond - May 2 - 12500
8. Imagine Dragons - Jun 5 - 14k
9. Ed Sheeran - Jun 17 - 14k
10. Blake Shelton - Jul 10 - 14k
11. Jason Aldean - Jul 11
12. Stevie Wonder - Jul 12 - 8500
13. Rush - Jul 15 - 13k
14. Mumford & Sons - Aug 12 - 14k
15. Foo Fighters - Aug 13 - 14k
16. Nicki Minaj - Aug 18 - 8k
17. Janet Jackson - Sep 2 - 8k
18. Shania Twain - Sep 17 & 18 - 28k
19. Paul Brandt & Dean Brody - Oct 2 - 7500
20. Kelly Clarkson - Oct 12 - cancelled
21. Slipknot - Oct 16 7500
22. Miranda Lambert - Oct 19 - 9500
23. Kevin Hart - Nov 23 - 14k
24. The Weeknd - Nov 29 - 14k
25. Motley Crue - Dec 13 - 7500

With two Shania shows, that's 26 concerts during the year (I don't know if Kevin Hart counts as a concert under those numbers, but I'd think it does). If the 154,183 number is accurate, that's an average of under 6,000 tickets sold per show.


I went to two of those shows -- Rush and Foo Fighters. Foo Fighters was a sellout, about 12,500 people. Rush wasn't quite a sellout, but it was still pretty full. It was definitely more than 6,000.

I can't speak on the shows I didn't attend, but if that 150,000 number is accurate, there must have been some shows that were virtually empty.

Kelly Clarkson didn't end up playing. I put the attendance figures I knew and googled the reviews of the rest (in red beside your concert listings) The only review with no attendance reported was Jason Aldean.

[MrMastodonFarm]

Originally Posted by jayswin

The only review with no attendance reported was Jason Aldean.

Hopefully due to no one showing up.

[#-3]

Originally Posted by jayswin

Kelly Clarkson didn't end up playing. I put the attendance figures I knew and googled the reviews of the rest (in red beside your concert listings) The only review with no attendance reported was Jason Aldean.

That adds up to 270,000 assuming the Aldean concert sold the same as all of the other stampede concerts.

As I said their numbers don't really make sense.

[Cappy]

Originally Posted by Enoch Root

As I have said multiple times, these things are very difficult to prove one way or the other, because no one says "well, I didn't go to a concert this month so I am going to go see a play".

All we can do is ask ourselves, how would I react? how do others react?

I know that, for my friends, the concert substitution is Vegas and Phoenix. I have no doubt that there are all kinds of other substitutions, many of which are here in town.

But I can throw the same question back to you: can you demonstrate any increased patronage in Calgary for other entertainment choices, compared to Edmonton?

I don't doubt that there are some. But the referenced numbers are huge. And concerts are big dollars - both direct and indirect. Unless someone can demonstrate other forms of entertainment here in town that are benefitting massively from the lack of concert attendance, it's probably pretty safe to conclude that the bleed is fairly significant.

I think your claims that these figures "are hard to prove" is wrong. Yes, studies cannot show what people are spending their money on as a substitute but every study that has been referenced on this forum has shown that the money has gone into the economy in some way or another.

The NHL also has some great data with respect to the loss of NHL events: we have had two NHL lockouts! They have been studied to death in all states and the same conclusions hold true: the money is spent on something else.

A U of A prof studied sales tax receipt changes in Florida during the 05 lockout. He found no/negligible change suggesting that spending stayed the same during the lockout. No decrease in revenue that Florida was receiving.

I understand that you have anecdotal evidence of changes (and I appreciate that you clarify it as anecdotal) but again its anecdotal for a reason. You are witnessing it in your own narrow experience of you and/or your friends.