[News] New Arena - Plan B - Victoria Park

[IamNotKenKing]

Originally Posted by RM14

???

$200 mm Cash
$250 mm User Fee
$200 mm City of Calgary
$240 mm Community Revitalization levy
$890 mm


http://www.calgarynext.com/financing-plan.php

The User Fee is money which would otherwise go to ticket prices. If it went straight to ticket prices, though, it would be hockey related revenue, and part of the Cap calculation. Calling it a User Fee saves that, but it's still money which people pay for a ticket to the event, which would otherwise go to the owners.

[RM14]

Originally Posted by IamNotKenKing

The User Fee is money which would otherwise go to ticket prices. If it went straight to ticket prices, though, it would be hockey related revenue, and part of the Cap calculation. Calling it a User Fee saves that, but it's still money which people pay for a ticket to the event, which would otherwise go to the owners.

... Ticket prices will increase similar to Edmonton and only more and more money will go to the owners. Fans are getting the screw job here. I personally don't think it's worth paying 30-40% more for tickets and beer to help earn the owners more money. Not looking forward to further corporatization of the c of red either with more box suites and club sections.

[WesternCanadaKing]

I may be in a minority, but I'll miss the Dome and am not looking forward to the new arena.

I get the feeling it will be overly catered to commercial interests as opposed to the fan experience, and some of the energy of the Dome will be lost. That plus more expensive tickets and beer does not lend itself to a fun atmosphere...

Hope I'm wrong, but these sort of projects in Calgary tend to chase the short term dollar signs instead of seeing the bigger picture.

[IamNotKenKing]

Originally Posted by RM14

... Ticket prices will increase similar to Edmonton and only more and more money will go to the owners. Fans are getting the screw job here. I personally don't think it's worth paying 30-40% more for tickets and beer to help earn the owners more money. Not looking forward to further corporatization of the c of red either with more box suites and club sections.

That's a different topic altogether, and a position you are completely entitled to.
I also don't disagree that prices will likely go up as well.
But, the User Fee is out of the owners' pockets, which was the discussion...

[RM14]

Originally Posted by IamNotKenKing

That's a different topic altogether, and a position you are completely entitled to.
I also don't disagree that prices will likely go up as well.
But, the User Fee is out of the owners' pockets, which was the discussion...

I guess my point is it's not really out of their pockets. It is out of their pockets in yr 1, completely returned over several years. I have a feeling when the owners are 100% repaid ticket prices won't drop either.

[IamNotKenKing]

Originally Posted by RM14

I guess my point is it's not really out of their pockets. It is out of their pockets in yr 1, completely returned over several years. I have a feeling when the owners are 100% repaid ticket prices won't drop either.

It is 100% out of their pockets, and is never paid back or returned.
It is money that would otherwise solely go to ticket prices, which amount they receive, and use to build the new rink.

[RM14]

Originally Posted by IamNotKenKing

It is 100% out of their pockets, and is never paid back or returned.
It is money that would otherwise solely go to ticket prices, which amount they receive, and use to build the new rink.

It is paid back to the owners by the fans through the ticket surcharge. Ticket revenue does not decrease to the owners whatsoever. A % is tacked onto all tickets above and beyond current prices. Fans simply pay more. Owners will not be out 1 cent over the medium term.

[Strange Brew]

Originally Posted by IamNotKenKing

It is 100% out of their pockets, and is never paid back or returned.
It is money that would otherwise solely go to ticket prices, which amount they receive, and use to build the new rink.

What you're saying is an economic fact, but many also theorize that consumers will absorb a higher price for a product when a portion of it is user fees and not embedded in the advertised price. Don't you think there is some truth to that?

[IamNotKenKing]

Originally Posted by RM14

It is paid back to the owners by the fans through the ticket surcharge. Ticket revenue does not decrease to the owners whatsoever. A % is tacked onto all tickets above and beyond current prices. Fans simply pay more. Owners will not be out 1 cent over the medium term.

I am sorry, but you are wrong.
The cost of the ticket plus User Fee is what will be paid as per what the market dictates. The cost without a User Fee would be the same number, because it is what the market dictates. The owners are going to charge X, being what we will pay. They essentially "reduce" the ticket price by the amount of the User Fee portion, to remove that from HRR. The end number the fan pays doesn't change.

[GullFoss]

Owners: 200m
Ticket tax: 100m
Province: 75m
Feds: 75m
City: Infrastructure and land grant

Done...

[IamNotKenKing]

Originally Posted by Strange Brew

What you're saying is an economic fact, but many also theorize that consumers will absorb a higher price for a product when a portion of it is user fees and not embedded in the advertised price. Don't you think there is some truth to that?

I agree. I can see that argument, and understand its effect.

(Note: I am being sincere in agreeing, but when I re-read this it sounds condescending, no matter how I re-type it. Completely unintentional.)

[IamNotKenKing]

Originally Posted by GullFoss

Owners: 200m
Ticket tax: 100m
Province: 75m
Feds: 75m
City: Infrastructure and land grant

Done...

Flames would take that in a heartbeat.

[Strange Brew]

Not condescending. And it was a sincere question so appreciate the response.

[Roughneck]

Originally Posted by GullFoss

Owners: 200m
Ticket tax: 100m
Province: 75m
Feds: 75m
City: Infrastructure and land grant

Done...

Owners: $200M

Taxpayers: $250M + opportunity cost + associated infrastructure

[IamNotKenKing]

Originally Posted by Roughneck

Owners: $300M

Taxpayers: $150M + opportunity cost + associated infrastructure

Your math was off. I fixed it for you.

[RM14]

Originally Posted by IamNotKenKing

I am sorry, but you are wrong.
The cost of the ticket plus User Fee is what will be paid as per what the market dictates. The cost without a User Fee would be the same number, because it is what the market dictates. The owners are going to charge X, being what we will pay. They essentially "reduce" the ticket price by the amount of the User Fee portion, to remove that from HRR. The end number the fan pays doesn't change.

People will pay more that is it. The team cannot raise prices more than 3-5% per year without pissing ticket holders off. So there is a cap on what they can increase year by year. When this deal goes through, ticket prices will increase both in annual ticket prices and also an additional ticket tax on top of that. The owners have no access or ability to access this revenue without a new arena deal.

Step 1 -> owners loan $250 mm upfront to building arena.
Step 2 -> all events have a surcharge added to them and that revenue into a specific ticket tax revenue account.
Step 3 -> that money is returned to original lender, (owners)

CSEC starts with $250 mm cash, and ends up with $250 mm cash... Cost is passed down to the fans.

[Alberta_Beef]

Originally Posted by RM14

People will pay more that is it. The team cannot raise prices more than 3-5% per year without pissing ticket holders off. So there is a cap on what they can increase year by year. When this deal goes through, ticket prices will increase both in annual ticket prices and also an additional ticket tax on top of that. The owners have no access or ability to access this revenue without a new arena deal.

Step 1 -> owners loan $250 mm upfront to building arena.
Step 2 -> all events have a surcharge added to them and that revenue into a specific ticket tax revenue account.
Step 3 -> that money is returned to original lender, (owners)

CSEC starts with $250 mm cash, and ends up with $250 mm cash... Cost is passed down to the fans.

No matter what the Flames are paying it is passed down to the Flames in one way or another, it doesn't make sense to cherry pick one revenue stream as not their money. It's simply identified as such so they can get a loan (likely with a better interest rate since there is a clearly identified revenue stream for it) rather than paying more up front.

[FireGilbert]

Originally Posted by IamNotKenKing

I am sorry, but you are wrong.
The cost of the ticket plus User Fee is what will be paid as per what the market dictates. The cost without a User Fee would be the same number, because it is what the market dictates. The owners are going to charge X, being what we will pay. They essentially "reduce" the ticket price by the amount of the User Fee portion, to remove that from HRR. The end number the fan pays doesn't change.

How is a ticket tax not considered HRR? Because it goes to the government before being given to the Flames? Why don't teams just have $1 tickets with a $99 tax? Seems like a loop hole the PA would want closed.

[Alberta_Beef]

Originally Posted by FireGilbert

How is a ticket tax not considered HRR? Because it goes to the government before being given to the Flames? Seems like a loop hole the PA would want closed.

Because a ticket tax goes to whoever is running the building, which isn't necessarily the same owner/operator as an NHL team. Even if CSE owns the building, the Flames will have to sign a lease as the arena would simply be another asset owned by the group, so including all of its revenues would be the same as doing so for the Stamps & Hitmen. In the Flames lease it will give the team a certain amount of revue from tickets/concession/parking... etc. and that will be what goes towards HRR

[GullFoss]

Originally Posted by IamNotKenKing

Flames would take that in a heartbeat.

So would STHs. It works out to a ticket tax of C$3.50-5 per ticket according to my math.

And so would the Feds and the Province assuming it was one of the few investments to make the olympics viable...The only other items I can think of are:

1) LRT link to airport - needed anyways with population of ~2m
2) Extra lane on highway to Banff - needed anyways with population of ~2m
3) Upgrade to McMahhon and Olympic Oval and new ski jumping