Arena negotiation discussion. UPD: Flames release their proposal

[nik-]

Originally Posted by Ducay

I'd say for people who understand business and project economics, KK did a bang up job presenting his side. Both on the dollars side, but also as to the timing and rationale for his statements.

Makes Nenshi look terrible for putting the arena up as part of his election plan, all while knowing it was effectively scuttled.

I would say both are losing the PR battle as Nenshi looks bad, CSEC looks bad, and no one gets an arena.

You want to elaborate on that?

I think everyone understands that they, as a business, want to put as little of their own money into this as possible. That's not rocket science.

[Ducay]

Originally Posted by nik-

You want to elaborate on that?

I think everyone understands that they, as a business, want to put as little of their own money into this as possible. That's not rocket science.

Its more along the lines of seeing that the Flames have done their forecasts and it just doesn't work at the 1/3 1/3 1/3 method. As opposed to the "layman" who sees it as billionaires just wanting a handout and being cheap. But yes, the end result is the same.

At the end of the day, I see both sides, appreciate they're holding their ground, and clearly no deal will happen until CAD skyrockets or city concedes more.

[Dion]

Speaking of ticket surcharge argument.....

Rider fans in Regina are paying a $12-per-ticket facility fee over 30 years to help pay for the new Moasic Stadium.

“We really struggled with trying to find the last bit of money,” Brandvold says. “The last bit of money was that $100 million.

“We knew the province couldn’t put up any more. The city had limits. We had limits. But we knew we needed another $100 million.”

It was then and there that the idea of paying off the $100-million loan by applying a $12-per-ticket facility fee over 30 years became the final piece of an elaborate puzzle.

http://leaderpost.com/feature/building-the-dream

[nik-]

Originally Posted by Ducay

Its more along the lines of seeing that the Flames have done their forecasts and it just doesn't work at the 1/3 1/3 1/3 method. People who understand project analysis - as opposed to the "layman" who sees it as billionaires just wanting a handout and being cheap. But yes, the end result is the same.

At the end of the day, I see both sides, appreciate they're holding their ground, and clearly no deal will happen until CAD skyrockets or city concedes more.

Define "doesn't work".

[JFK]

Originally Posted by Ducay

I'd say for people who understand business and project economics, KK did a bang up job presenting his side. Both on the dollars side, but also as to the timing and rationale for his statements. .

You've got to be kidding me. Read this forum, other forums, facebook, reddit, articles written on the subject, your friends and family... you're on an island thinking Ken King did a bang up job. You're alone thinking he was anything above average.

[Ducay]

Originally Posted by nik-

Define "doesn't work".

The Flames do not receive a sufficient return on investment to make it economically feasible from their perspective.

Originally Posted by JFK

You've got to be kidding me. Read this forum, other forums, facebook, reddit, articles written on the subject, your friends and family... you're on an island thinking Ken King did a bang up job. You're alone thinking he was anything above average.

I think he has been terrible over the years, but yesterday's presser I found to be very poignant and rational. I understand and appreciate the impasse they are at, and why CSEC had to speak up this week.

[nik-]

They may not get the return they wanted, but not feasible I seriously doubt.

[jayswin]

Originally Posted by Ducay

I'd say for people who understand business and project economics, KK did a bang up job presenting his side. Both on the dollars side, but also as to the timing and rationale for his statements.

This is laughable. As has been mentioned a few times now in this thread, it's actually a new PR world where the opposite of what you suggested is actually happening - The general public is more educated and wise to funding sports stadiums than ever before.

If anything part of this whole PR disaster for the Flames is that they're presenting like it's 1998 while a large percentage of a more educated and sophisticated city of Calgary laughs and rolls their eyes because they know the sports stadium playbook that the Flames and you think is so secret and above the average citizen.

[Makarov]

Originally Posted by Ducay

Its more along the lines of seeing that the Flames have done their forecasts and it just doesn't work at the 1/3 1/3 1/3 method.

I don't think it's a good look for the organization at all. They can't make it work in Calgary with 1/3, 1/3, 1/3. The Jets organization makes it work in Winnipeg with a 100% privately funded arena. Not very impressive.

[Ducay]

Originally Posted by nik-

They may not get the return they wanted, but not feasible I seriously doubt.

?

Sure, any of these projects are technically feasible. New Vic Park Dome is feasible, CalgaryNext is feasible, TsuuTine Dome is feasible. But if CSEC needs a 10% RoI to go ahead on a new arena with $X amount of cash outlay, if it doesn't meet that, they won't invest, and thus, isn't a viable investment for them.

[Svartsengi]

http://www.cbc.ca/news/canada/calgar...rena-1.4293228

worth watching. very rarely are there economic benefits of city taxpayers funding arenas/stadiums. Team owners love to say this isn't the case but its simply not worth it for the city to fund the construction of a new arena. there is no other city for the Flames to move to either.

[jayswin]

Originally Posted by Ducay

?

Sure, any of these projects are technically feasible. New Vic Park Dome is feasible, CalgaryNext is feasible, TsuuTine Dome is feasible.

Was that supposed to be Tsuut'ina Dome? I honestly don't know what you meant there.

[Ducay]

Originally Posted by Makarov

I don't think it's a good look for the organization at all. They can't make it work in Calgary with 1/3, 1/3, 1/3. The Jets organization makes it work in Winnipeg with a 100% privately funded arena. Not very impressive.

See but that is where layperson assessment comes into it. You're looking at things from a personal perspective and see CSEC as being too greedy, or demanding too much of a return.

CSEC has run the economics and the 1/3 model doesn't get them enough of a return, simple as that. This is isn't philanthropy and I can appreciate that. Capital has a cost.

Don't mistake that appreciation as being on CSEC's side. KK and Edwards can eat a big bag of dicks.

[nik-]

Originally Posted by jayswin

This is laughable. As has been mentioned a few times now in this thread, it's actually a new PR world where the opposite of what you suggested is actually happening - The general public is more educated and wise to funding sports stadiums than ever before.

If anything part of this whole PR disaster for the Flames is that they're presenting like it's 1998 while a large percentage of a more educated and sophisticated city of Calgary laughs and rolls their eyes because they know the sports stadium playbook that the Flames and you think is so secret and above the average citizen.

Part of the problem is they way overestimate their value. The statement about the Flames basically being the biggest point of pride in the city? They actually believe that, and it's indicative of the reason King comes across as so tone deaf.

As someone who is probably an above average fan and has lived here the majority of my life, a pro sports team doesn't rate at all in what makes me "proud" of this city.

My city being one of the rare ones that stands up to these teams and says "No, we're not buying this same old story when it comes to arenas" would make me proud.

[CaramonLS]

Originally Posted by Reggie Dunlop

From a friend's Facebook post....

Guy works in PR.

Spoiler!

If we're lucky, maybe Murray Edwards will release the Flames proposal broadcasting live from the Isle of Man next week.

[Dion]

Originally Posted by Ducay

?

Sure, any of these projects are technically feasible. New Vic Park Dome is feasible, CalgaryNext is feasible, TsuuTine Dome is feasible. But if CSEC needs a 10% RoI to go ahead on a new arena with $X amount of cash outlay, if it doesn't meet that, they won't invest, and thus, isn't a viable investment for them.

Truth is owners have become accustomed to taxpayers paying for a good part of these arena/stadium deals and want that gravy train to continue.

Billionare owners have more than enough money to fund these projects. They just want to pay as little as possible.

[Ducay]

Originally Posted by Dion

Truth is owners have become accustomed to taxpayers paying for a good part of these arena/stadium deals and want that gravy train to continue.

Billionare owners have more than enough money to fund these projects. They just want to pay as little as possible.

This is precisely the "layman" approach I am talking about. Its not about billionaires wanting to pay as little as possible (well, yes it is) but it is all about returns. If M.Edwards could get 15% return on the 1/3 deal, he'd be all over it. Heck, I'd imagine just to be the "good guy" or get the project moving, he'd take a deal that gets him a return equal to some kind of personal WACC or a low risk investment. Sure, they could be holding out for a return higher than they should, but they've set their return at a certain level and are holding out for something in that range.

These guys have more money than they will ever need and the bad press isn't worth it if they were really trying to get insanely greedy. They live for the reputation at this point.

So yes, they have enough money to fund it, but why would they if they are going to earn peanuts on their investment? Can't blame them if they could use that same money to get better returns invested elsewhere.

[iggy_oi]

Originally Posted by Ducay

See but that is where layperson assessment comes into it. You're looking at things from a personal perspective and see CSEC as being too greedy, or demanding too much of a return.

CSEC has run the economics and the 1/3 model doesn't get them enough of a return, simple as that. This is isn't philanthropy and I can appreciate that. Capital has a cost.

Don't mistake that appreciation as being on CSEC's side. KK and Edwards can eat a big bag of dicks.

People understand what the team is saying, most are just not buying what the flames are saying as it's obviously posturing and they're clearly trying to play hardball with the city.

[Makarov]

Originally Posted by Ducay

See but that is where layperson assessment comes into it. You're looking at things from a personal perspective and see CSEC as being too greedy, or demanding too much of a return.

CSEC has run the economics and the 1/3 model doesn't get them enough of a return, simple as that. This is isn't philanthropy and I can appreciate that. Capital has a cost.

Don't mistake that appreciation as being on CSEC's side. KK and Edwards can eat a big bag of dicks.

Alright, but I sure hope that myth of the brilliant business minds of Murray Edwards, Ken King et al dies at the end of this debacle. The Winnipeg Jets organization has made it a viable business in Winnipeg with a completely private arena, one half the population, less disposable income, and maybe one quarter the corporate sponsorship budgets. I may be a layman but, based on the foregoing, I don't accept that many in the Flames organization are "experts".

[nik-]

Originally Posted by Ducay

This is precisely the "layman" approach I am talking about. Its not about billionaires wanting to pay as little as possible (well, yes it is) but it is all about returns. If M.Edwards could get 15% return on the 1/3 deal, he'd be all over it. Heck, I'd imagine just to be the "good guy" or get the project moving, he'd take a deal that gets him a return equal to some kind of personal WACC or a low risk investment. Sure, they could be holding out for a return higher than they should, but they've set their return at a certain level and are holding out for something in that range.

These guys have more money than they will ever need and the bad press isn't worth it if they were really trying to get insanely greedy. They live for the reputation at this point.

So yes, they have enough money to fund it, but why would they if they are going to earn peanuts on their investment? Can't blame them if they could use that same money to get better returns invested elsewhere.

Unfortunately, I think it's less of this and more just wanting an Edmonton deal. That's a large part of what their stance comes down to.