[News] Ken King: Flames' owners no longer pursuing new arena with City of Calgary

[dustygoon]

Originally Posted by The Familia

Harley Hotchkiss is rolling in his grave right now. I don't think it would have come down to this if he were still around.

I would like to think that too, but that old group which were very community minded also threatened to move the team in the 90's unless it got support. There were better alternatives to losing money. Now they are alternatives that make more money.

Reality is Calgary is a smaller market team. Private funding the whole load is tough especially when economics are better elsewhere.

There is no doubt that there is a net economic benefit to the team being in Calgary vs not. What that number is? Construction jobs of new building vs not building. Employment of ushers at games vs not. Taxes collected etc. The city should 100% pay up to that net benefit (contribution to local economy). Tough to measure I know but it's doable. If the team needed $300m to stay, then is there net benefit of anywhere between $200-400m? If so then you add the public funding. If the benefit is less, then adios flames.

[Mongo]

A few thoughts from a guy that had to watch the gong show up north closely when I lived there:

First and foremost, arena financing precedents throughought the world are ridiculous. Trying to understand what has been historically done is a mess. I blame the US metropolitan areas because their cities are so chopped up into smaller counties that you end up with these smaller gov't bodies bidding against each other for an arena in the same city and it turns into a mess. John Oliver has my favourite piece on this topic...check youtube. Just acknowledge, observe, and as a result understand why these owners seek financial help...they want what they have seen a lot of their other rich buddies got...but turn a blind eye to the situations where the team's owners bucked up.

Egos taking over and emotional reactions abound. Nenshi's move to release that Cornish video acting like he was a champion of the arena plans...while KK saying the City has gone silent for over a month...was a shot across the bow and the Flames owners chose note to be the cooler head. Had Nenshi simply reached out and said he intends to release the video and talk about it...maybe yesterday goes differently (Bettman in town contradicts this though). Instead the video goes out complete with backhanded comments towards Flames ownership. Flames respond in kind to a mayor acting like he is at the table when they believe (based on precedents suggested above) he is nowhere close. Fun!

Regarding Murray Edwards. England offers a 7 year tax vacation to new residents so he can move there, park his money, and relocate back later (I don't know these rules inside-out so someone smarter may poke holes). If he returns, I predict it will be in the lead up to the 2019 provincial election and basically along the lines of "I and my millions of tax revenue will return to AB if a more fiscally conservative gov't (with lower marginal rates) returns to power". Wealthy AB residents have seen their marginal tax rate rise from 39% to 48% in the last few years. Boo hoo for someone making millions upon millions a year as all of the Flames owners do...but someone making $10million/year has seen $1million a year in tax increases these past few years. They view that lost $1million as lifestyle money for their great grandchildren down the road. No shortage of angst from the $ elites to the left-leaning politicians...it gets emotional quick.

Meanwhile, KK slipped in that they raised $400K for charity yesterday because "that's what we do".

A lot of times this all boils down to Legacy. Nenshi wants to be part of the legacy of gov'ts who chose to push back on ridiculous arena financing...Flames owners will be torn...they don't want to avoid the advantage of the ridiculous precidents mentioned above...but deep down I suspect they also don't want to be remembered as the rich guys who simply gave up and were the reason a team left the city. They all have many friends...they all have extended family...that can't or won't leave this city. They are just exhausted.

Sadly...all of us will be exhausted as well in the months/years leading up to an ultimate deal being done...it will be messy but it will get done.

Apologies for the long note

[GirlySports]

Originally Posted by the-rasta-masta

Why do we need a new arena to raise ticket prices? If the Flames need more revenue to keep up, seems plausible that a ticket price increase would still get them there?

Who would pay more for tickets with less amenities?
You are charging for the arena experience as well.

[Lanny_McDonald]

Originally Posted by Senator Clay Davis

Since it's effectively impossible to determine why bands choose to skip somewhere (the bands don't usually tell you why they aren't playing somewhere, of course), we're all speculating. The building is a factor. The biggest? Could be. Could also be Edmonton and Calgary are comparable market sizes and bands who play arena shows often choose to only play one.

This is very true. Bands normally will only play one venue in a market. Calgary is natural logistic choice, especially for large touring shows that have containers of gear. Considering locations of most shows, the proximity to certain travel arteries, Edmonton is out of the way. The fact they are getting shows over Calgary clears states the facilities in Calgary are not up to par. Edmonton got shows because Commonwealth was the better venue over McMahon. Now their new arena is massively better than the Saddledome. Calgary doesn't have the facilities to hold big concert events. That's why the city is bypassed.

[Roughneck]

What taxes are collected by the city? The Saddledome is publicly owned so no property taxes there, and the Flames want the new arena to be owned by the city for the same reason (city takes on all liability while the team gets the management contract on a sweetheart lease).

[Coach]

Originally Posted by Erick Estrada

CSEC employs a lot of Calgarians. There's also trickle down effects in that the 960 guys (I don't know how many people 960 employs but it's still local livelihoods and they all count) would be let go and some local businesses in the area will suffer. I have no issues in trying to lure Amazon but at the end of the day it's a pipe dream.

Yeah it does, but not 50,000.

I'm not saying we'll get Amazon. The poster equated funding the arena with subsidizing Amazon's HQ. What I am saying is that the public benefit of a sports team does not even come close to touching the long term influx of 50,000 jobs into a city. There is no dance of statistics that can happen to make them appear close. That doesn't mean there is zero public benefit from a sports team.

[nfotiu]

Originally Posted by dustygoon

I would like to think that too, but that old group which were very community minded also threatened to move the team in the 90's unless it got support. There were better alternatives to losing money. Now they are alternatives that make more money.

Reality is Calgary is a smaller market team. Private funding the whole load is tough especially when economics are better elsewhere.

There is no doubt that there is a net economic benefit to the team being in Calgary vs not. What that number is? Construction jobs of new building vs not building. Employment of ushers at games vs not. Taxes collected etc. The city should 100% pay up to that net benefit (contribution to local economy). Tough to measure I know but it's doable. If the team needed $300m to stay, then is there net benefit of anywhere between $200-400m? If so then you add the public funding. If the benefit is less, then adios flames.

There is doubt. In fact most economists agree that there is a negative benefit. Having the community spend their entertainment dollars on sports keeps about the least amount of that money in the community when compared to spending on just about anything else.

https://www.marketplace.org/2015/03/...winners-cities

[the-rasta-masta]

Originally Posted by GirlySports

Who would pay more for tickets with less amenities?
You are charging for the arena experience as well.

I've been to new arenas, and certainly didn't find them worth paying more than going to the Saddledome. I prefer to sit and watch the game then spend my time in an upgraded version of the King Club. And Dutton's after the game is all I need.

[soulchoice]

Originally Posted by Senator Clay Davis

Since it's effectively impossible to determine why bands choose to skip somewhere (the bands don't usually tell you why they aren't playing somewhere, of course), we're all speculating. The building is a factor. The biggest? Could be. Could also be Edmonton and Calgary are comparable market sizes and bands who play arena shows often choose to only play one.

Clay I completely respect your insight to this. As you have a way of being respectful and concise in your thoughts. This makes for a good discussion. However I do have direct experience and contacts within the the topic of these exact tours and concerts. Comparable market sizes are a part of any decision but the saddledome is the major reason.

the reason why Calgary gets skipped more often than not is and always has been because of the arena itself. Not just cause of the age of the building as the former Northlands coliseum was old too. But also because of the horrible roof and acoustics of the saddledome. Add to the fact Edmonton has a new arena, this will certainly be happening more and more in the future. Tours will continue to skip the city in favor of the city up north.

[Roughneck]

Originally Posted by MattyC

Yeah it does, but not 50,000.

I'm not saying we'll get Amazon. The poster equated funding the arena with subsidizing Amazon's HQ. What I am saying is that the public benefit of a sports team does not even come close to touching the long term influx of 50,000 jobs into a city. There is no dance of statistics that can happen to make them appear close. That doesn't mean there is zero public benefit from a sports team.

Equating the 50,000 jobs Amazon is talking about to ushers and ticket takers is quite the dance on its own

[Hot_Flatus]

Originally Posted by Roughneck

Equating the 50,000 jobs Amazon is talking about to ushers and ticket takers is quite the dance on its own

It's amazing the lengths fanboys will go to somehow legitimize this pathetic song and dance by CSEC.

Let's turn the tables and picture the city asking CSEC for money to build something with no private benefit to them. How far do you think Nenshi would get before Edwards released the hounds?

[Senator Clay Davis]

Originally Posted by New Era

This is very true. Bands normally will only play one venue in a market. Calgary is natural logistic choice, especially for large touring shows that have containers of gear. Considering locations of most shows, the proximity to certain travel arteries, Edmonton is out of the way. The fact they are getting shows over Calgary clears states the facilities in Calgary are not up to par. Edmonton got shows because Commonwealth was the better venue over McMahon. Now their new arena is massively better than the Saddledome. Calgary doesn't have the facilities to hold big concert events. That's why the city is bypassed.

Edmonton is one hour further to drive to from Vancouver than Calgary. There's virtually no difference coming from Winnipeg. Since those are the two places most bands are coming from and going to, the difference is totally negligible. And McMahon gets bypassed because of NIMBYism, not the facility itself. Even if McMahon were the nicest outdoor stadium in Canada, NIMBYism would still win.

[Lanny_McDonald]

Originally Posted by Hot_Flatus

The Flames ownership group showed their true colours back then just as they are now. All the past rhetoric about the Flames having owners that give a hoot about the community and being the best in the league is a bunch of garbage.

These guys are money hungry billionaires that will stop at nothing to get their way. At some point I would wager that they will move the team simply out of spite if the city pushed this fight too far.

Sorry, have to correct you. The Flames, just like the Oilers, were up against a wall. They were forced to watch star after star leave the city because of the poor deal they had with the city. Economics of the game had changed, and for the team to remain competitive a new deal had to be struck. They also went to the league and forced them to pony up, coming up with a scheme to help in the imbalance of the Canadian versus US dollar. This was all about survival of the team. They needed a new deal and marginal improvements. The city and league kicked in to make it work.

The current scenario is different, but similar. The economics of the game have changed, and this requires a new building. This is not about enriching billionaires, they can make their money elsewhere and with less hassle. This is about viability of the hockey team and making sure we don't have to go through another period of dark days, like the Young Guns era. The money made of the Flames is marginal. Most money goes right back into the club. That will probably continue.

[GGG]

CalgaryNext --- 850 million city, 450 million flames. This was a terrible deal for the city.

Vic Park
- 1/3 loan --unclear from article who pays it back (I agree with bunk that it would be a CRL so that's city)
-1/3 ticket tax - flames
-1/3 ownership - flames

The Vic park deal seems pretty reasonable depending on what that loan looks like, who is responsible for maintenance and who owns it. If you assume city owns flames maintain it looks pretty similar to what the CNext "pitch" was asking for rather than what the actual costs were. I hope more details around the offer come out so we can truly evaluate the stakes out positions.

[DJones]

It'll be interesting to see what everyone's opinion would be when the team leaves. The only time I come to Calgary is hockey games and occasionally the Zoo so obviously I'm biased. Why anyone over 25 would ever go downtown besides work blows my mind haha.

I don't think it'll come to that though, the city will crack. They always do. Even if they "win" all they are left with is a building to demolish with nothing to build.

[GGG]

Originally Posted by New Era

Sorry, have to correct you. The Flames, just like the Oilers, were up against a wall. They were forced to watch star after star leave the city because of the poor deal they had with the city. Economics of the game had changed, and for the team to remain competitive a new deal had to be struck. They also went to the league and forced them to pony up, coming up with a scheme to help in the imbalance of the Canadian versus US dollar. This was all about survival of the team. They needed a new deal and marginal improvements. The city and league kicked in to make it work.

The current scenario is different, but similar. The economics of the game have changed, and this requires a new building. This is not about enriching billionaires, they can make their money elsewhere and with less hassle. This is about viability of the hockey team and making sure we don't have to go through another period of dark days, like the Young Guns era. The money made of the Flames is marginal. Most money goes right back into the club. That will probably continue.

So your suggesting that the league should come to the table then to help fund arenas by lowering the cap by 20 million per season and creating an arena fund to build new arenas in cities.

The day the league does that sign me up for the city to make a deal. The difference between then and now is the league recognized the value of the Canadian market and worked to protect it. Today based on all of their statements they do not care about where the markets are as long as they make profit.

So if Bettmen and the NHL want to work with munis to reduce the impact of public financing of sports team I will support that but don't try to tell me the league is working with the city because the flames and league can't afford to be here.

[renny]

Originally Posted by rotten42

Sure....a private business like Amazon comes along and you know Nenshi is all over giving up tax breaks - land deals but a sports franchise is looking for public money and some how its so different. I call bull####.

The Amazon HQ2 will generate an estimated 50,000 jobs at Amazon alone. Once you get one of the tech giants in your city it will attract others, creating more jobs, will a new area be able to generate that many jobs? If yes then by all means let's get this thing built and give the Flames some tax breaks, but the Flames still need to pay for their own building just like Amazon is paying for their own building.

[Matata]

Saw the local news segment on this: all the cities fault, poor owners and bettmen just want to do the right thing, every "Calgarian on the street" interviewed staunchly supported a new arena, no mention of financial implications to the city and Calgarians. Barf.

[Hot_Flatus]

Originally Posted by New Era

Sorry, have to correct you. The Flames, just like the Oilers, were up against a wall. They were forced to watch star after star leave the city because of the poor deal they had with the city. Economics of the game had changed, and for the team to remain competitive a new deal had to be struck. They also went to the league and forced them to pony up, coming up with a scheme to help in the imbalance of the Canadian versus US dollar. This was all about survival of the team. They needed a new deal and marginal improvements. The city and league kicked in to make it work.

The current scenario is different, but similar. The economics of the game have changed, and this requires a new building. This is not about enriching billionaires, they can make their money elsewhere and with less hassle. This is about viability of the hockey team and making sure we don't have to go through another period of dark days, like the Young Guns era. The money made of the Flames is marginal. Most money goes right back into the club. That will probably continue.

Give me a break - poor deal? The Flames have had the privilege of having zero building costs and no property taxes for decades. Sounds really bad for a corporation that should be injecting millions of tax dollars into the economy! The Flames owners dug their own graves in the 90's due to consistently icing a pathetic team long before the economics changed substantially. Flames fans stopped going to games because the team was gutted and mismanaged into oblivion. Now we have a franchise amongst the highest revenue generating teams in the league and we're supposed to buy the 'hang on' jargon.....no thanks. Calgary is not the small market that they'd lead you to believe.

Calgary can't even complete the latest transit line properly or finish a handful of overpasses on stoney trail due to funding gaps and we're supposed to pony up to these fatcats like they're the be all end all? It would sure be nice to be able to increase your franchise value substantially all the while barely dipping into your savings because you've duped the public into paying for a luxury building with tax dollars, ticket levies and cushy payback schemes no one else in the world has access to.

At this point, who's to say these weasels don't sell off the team they bought for pennies on the dollar decades ago and run for the hills 5 years after this all settles and we end up with another owner looking to move on to greener pastures?

[soulchoice]

Originally Posted by Senator Clay Davis

Edmonton is one hour further to drive to from Vancouver than Calgary. There's virtually no difference coming from Winnipeg. Since those are the two places most bands are coming from and going to, the difference is totally negligible. And McMahon gets bypassed because of NIMBYism, not the facility itself. Even if McMahon were the nicest outdoor stadium in Canada, NIMBYism would still win.

Commenwealth will always get more of the outdoor concerts(GnR etc) for the sheer size but mostly cause of the nimbys/bylaws indeed. That is true.

Calgary is not a better choice logically. Both Edmonton and Calgary are cities in the middle of the prairies hence location has no bearing on the decision for a concert. Usually they are coming from or headed to Vancouver/Saskatoon after a Calgary/Edmonton show.

However when it comes to the arenas(rinks) its a different matter. That is the area in which Calgary can close the gap on tours with a new venue.