Flames to announce plans to announce arena plans in the... future...

[Tinordi]

Still waiting for the substance of your argument on why anyone should listen to an economic impact analyses...

[Maritime Q-Scout]

I'll admit I haven't read the studies yet, but there are a few things to keep in mind while reading them:

1. Calgary's surrounding municipalities are… well it's still Calgary. Calgary doesn't have a lot of municipalities around it to draw people from as the majority of people that live in the Calgary area live in Calgary.

A city like Ottawa, Vancouver or Montréal isn't like this. One of those cities spending money on a project will be able to have a better benefit as the entertainment (NHL) dollars will be substituted with entertainment outside of the city.

Here's an example. The City of Arlington, Texas has given lots of public funds to subsidize a MLB ballpark and an NFL stadium. The owner of the NFL franchise in Texas I believe is the richest owner in the NFL. So why did Arlington help support him? Because Arlington is in between two huge markets, Fort Worth and Dallas. The city knows if we don't help get the stadium here, those dollars go elsewhere and we don't see any. The majority of people are coming into Arlington to watch games and spend money. That money would be spent if the teams weren't there, but spent elsewhere.

However, in Calgary the money that a new arena would generate would still be spent in Calgary (at least the majority of it).

What the city (or Flames) could do is find out what amount of new spending a new stadium would generate. This number is likely disproportionately low, whereas Arlington's would be disproportionately high.

2. The other thing that needs to be factored into consideration would be the ability to attract players. New facilities would give players added insentives to play in Calgary. Players don't want to play in cruddy arenas, and want accessabilty to modern medical and physio facilities.

Better players leads to better teams which leads to deeper playoff runs which leads to more money. The last game I was at was in the SCF. It was a trip that was made because it was the finals, and I wasn't the only one on the plane making it for that specific reason.

3. Boxes and concessions. Better revenue opportunities lead to a better opportunity for the city to recoup their ROI.

Frankly I don't see why the city doesn't take a percentage of concessions sales, or luxury box sales until the money given to fund is paid back with X amount of interest.

4. Does the municipality have programs for public funding? If so, then a new arena could potentially tap into that. It's funding already allocated. The big issue with something this big is new funding.


TL;DR different cities have different variables. You simply can't compare Calgary to Ottawa, at all… like what so ever… heck the Ottawa Senators don't even play in Ottawa.

[Resolute 14]

Originally Posted by Tinordi

Still waiting for the substance of your argument on why anyone should listen to an economic impact analyses...

I never made that argument, I merely teed off on your typical "I'm always right" attitude. Also if you are going to demand responses to questions, you should probably answer EldrikonIce's question posed to you.

[Tinordi]

Couple of things here:

1. Eldrick's report is an economic impact analysis.

2. I made 3 posts about why economic impact analyses are not useful.

And you think I haven't answered his post? Tiring.

[Tyler]

Economic benefits go out the window when you're 400 deep on the Saddledome concourse, struggling to navigate around a godforsaken Dodge truck in the middle of everything while trying not to wet your pants in massive intermission lineup to take a leak.

We'll get a new arena and we'll likely be paying for it in one way or another. Oh well.

[JayP]

Originally Posted by Resolute 14

I never made that argument, I merely teed off on your typical "I'm always right" attitude. Also if you are going to demand responses to questions, you should probably answer EldrikonIce's question posed to you.

Wow, talk about the pot calling the kettle black.

[Chill Cosby]

The worst thing to happen to message boards was the knowledge of formal and informal fallacies.

[heep223]

We need to find someone with a city/urban/regional planning background to shed some light on this.

[Jer Bu]

Originally Posted by Fire

You are way off base with this paragraph. If Treliving wanted to spend $15 million on a couple of players right now the owners wouldn't stop it. The tickets go up because the market can support it. The cap will most likely keep increasing year over year. They need the ticket revenue to do the same or risk becoming a have-not franchise again (remember the 90's? - boy were they fun).

Any money they make on the Flames is peanuts compared to their business ventures.

Last year the Flames owners pulled out millions of dollars, like $10M+ of additional profit by not spending to the cap. This year they will do the same, but more. I have not seen the operating income numbers for the Flames for this past year, but the year before in 2012/2013 they made nearly $12M in EBITDA. I fully expect that number to be north of $20M for this past year. And this year I assume it will be more.

NHL teams in Canada are a money maker. The Winnipeg jets are already worth more than double what True North paid for them. I agree there are likely less complex, bigger money makers than owning an NHL team. I also know that Flames owners aren't exactly posting their shares for sale to whomever will take em.

How long do you think it would take for the Flames ownership group to find a buyer if they decided to sell tomorrow (assuming no NHL red tape). Not long. Not long at all.

I am for the city investing in a new stadium, but ONLY if it is treated like a real investment with real return on investment, not some economic impact calculation, over a reasonable period of time. Every single dollar, including tax breaks, needs to be completely justified with real cash returns.

Calgary should SET the example of how to profitably support the building of a stadium, not fall into the same trap so many other cities have experienced.

[heep223]

Originally Posted by Jer Bu

Every single dollar, including tax breaks, needs to be completely justified with real cash returns.

Then we will be in the Saddledome for the foreseeable future. The reality is that the benefit of a new arena, and/or lack thereof, can be very difficult to forecast, measure and track. As is evidenced by this thread.

[Jer Bu]

The hard benefits are much easier to forecast and negotiate - gate, parking, food, booze, expenses, land, taxes, etc

But many on this thread are hell bent on finding soft returns for the investment. Those are hard to determine because they are so often inflated or just plain fake.

edit: and to be honest, if we can't quantify the benefits, and the owners don't want to build on their own, then the Flames should probably stay in the Dome...

[CliffFletcher]

Originally Posted by Loyal and True

Define affluent.

Calgary is a boom/bust economy which **currently** has a massive population and high income per capita. The 90s were not that long ago. People can move back to BC, SK, MB, Maritimes and US just as quickly as they got here.

If the Alberta economy collapses to the extent that Calgary no longer home to a larger number of head offices than Winnipeg, and it loses 30 per cent of its population, the decision to spend $200 million of municipal tax dollars on a new arena will look like a blunder of highest magnitude.

Originally Posted by Loyal and True

I can understand your suspicion towards extortion by billionaires. However in Calgary our owners have a long track record of community support in every way imaginable.

So do billionaire oil barons who don't own the Flames. And for my part, I would rather have my elected representatives allocating $200 million in public finances to necessary long-term projects than leave that spending decision to billionaire philanthropists who, hover well-intentioned, have an entirely different agenda.

[RM14]

Originally Posted by Jer Bu

Last year the Flames owners pulled out millions of dollars, like $10M+ of additional profit by not spending to the cap. This year they will do the same, but more.

From what I know, the Flames owners have never "pulled out" profits from the corporation ever. Surpluses remain in the organization.

[Jer Bu]

Limited partners don't pay dividends, so "pulled out" is not the correct term.

$10M extra in the bank however is $10M extra pretax income. It is the owners money, and access to it is only limited by the the terms of the partnership agreement.

[Beatle17]

Originally Posted by Jer Bu

Limited partners don't pay dividends, so "pulled out" is not the correct term.

$10M extra in the bank however is $10M extra pretax income. It is the owners money, and access to it is only limited by the the terms of the partnership agreement.

Do you work for the Flames and have access to the financials and other pertinent information, or are you an accountant that is giving general accounting practices?

I think if you work for the Flames it won't be long when you are passing out private information.

[Jer Bu]

No private information, just published info combined with common sense..

Forbes will tell you how much the flames netted in EBITDA in 2012-2013. Common sense says it increased last year.
The fact that the Flames are a limited partnership, and how limited partnerships work is public as well.

But for me it comes down this - the flames are a profitable business , last year and very likely this year they will not spend to the cap - increasing profits.

Taking on private debt will hurt those profits, for sure. If I were them I would be looking for lots and lots of public money to reduce that debt. And if I were the city / province - I would be making damn sure that any funds or financing given was treated like a real investment, and not a gift or some type of public improvement.

[Tyler]

Originally Posted by RM14

From what I know, the Flames owners have never "pulled out" profits from the corporation ever. Surpluses remain in the organization.

True. Every drop of profit goes back into the team, the rink or the community.

You make your money as an owner if/when you decide to sell your share (happens rarely).

[Beatle17]

Originally Posted by Jer Bu

No private information, just published info combined with common sense..

Forbes will tell you how much the flames netted in EBITDA in 2012-2013. Common sense says it increased last year.
The fact that the Flames are a limited partnership, and how limited partnerships work is public as well.

But for me it comes down this - the flames are a profitable business , last year and very likely this year they will not spend to the cap - increasing profits.

Taking on private debt will hurt those profits, for sure. If I were them I would be looking for lots and lots of public money to reduce that debt. And if I were the city / province - I would be making damn sure that any funds or financing given was treated like a real investment, and not a gift or some type of public improvement.

Thanks for the reply. Forbes numbers are estimates only and they have stated numerous times that they have no inside information in regards to arena deals etc. Using this information it would appear as standard accounting practices which would be great, but again I wouldn't quote any numbers as being factual.

Thanks again.

[EldrickOnIce]

Originally Posted by Jer Bu

And if I were the city / province - I would be making damn sure that any funds or financing given was treated like a real investment, and not a gift or some type of public improvement.

So exactly what the city/province didn't do with the new film studio, where the major tenant put up but $10M of the total cost - while the city, economic development Calgary and the province threw in the other $218M?

[Fire]

If all levels of government came out and said that no public money would be spent on a new arena, you still think people will be lining up to buy the Flames? I have my doubts. Not many people would be willing to buy a team with one of the oldest arenas in the NHL if they know they will have to spend at least $300 million on a arena to keep the team profitable.