Arena negotiation discussion. UPD: Flames release their proposal

[D as in David]

Originally Posted by iggy_oi

Property tax and income taxes from all their employees. While it is a fair statement to make, it doesn't take into account the amount of tax payer funded resources the flames require to operate their business so it's a bit of a moot point.

Income taxes are not paid to the city; they are paid to Federal and provincial governments.

[JerryUnderscore]

I love how Bettman said the other day that negotiations are over and when a reporter responded with "For now?" he doubled down with "No, negotiations are over. The Flames aren't pursuing a new building."

Then as soon as Nenshi released the city's proposal, Ken King immediately came out with, "We're planning to release a counter offer in the next few days."

I mean, I think we all knew Bettman was full of it but this is such a blatant reversal. Did anyone seriously think the Flames were throwing in the towel on getting a new arena?

[GGG]

If the flames said we will take this deal but do to the economics we have to spend to 5 million under the cap.

Would you support the team making that decision?

[iggy_oi]

Originally Posted by D as in David

Income taxes are not paid to the city; they are paid to Federal and provincial governments.

That money goes into a revenue fund which the city and Calgarians get a portion of.

[iggy_oi]

Originally Posted by JerryUnderscore

I love how Bettman said the other day that negotiations are over and when a reporter responded with "For now?" he doubled down with "No, negotiations are over. The Flames aren't pursuing a new building."

Then as soon as Nenshi released the city's proposal, Ken King immediately came out with, "We're planning to release a counter offer in the next few days."

I mean, I think we all knew Bettman was full of it but this is such a blatant reversal. Did anyone seriously think the Flames were throwing in the towel on getting a new arena?

Did king say it was a counter offer? I thought they were just going to release the details of their proposal which the city did not accept.

[iggy_oi]

Originally Posted by GGG

If the flames said we will take this deal but do to the economics we have to spend to 5 million under the cap.

Would you support the team making that decision?

We can't control what the flames spend on players anyways and I'm not even sure how credible that statement can be taken in a league that shares revenue amongst it's franchises.

[GGG]

Originally Posted by iggy_oi

We can't control what the flames spend on players anyways and I'm not even sure how credible that statement can be taken in a league that shares revenue amongst it's franchises.

Agrreed, but it's more of a philosophical discussion. If the gap is 5 million per year one option for the Flames is to reduce expenses so reducing 4 million US in Salary would directly offset the property tax.

So if the project is uneconomic at the Cities current offer would you as a fan support the team with an internal cap.

[pseudoreality]

Originally Posted by GGG

If the flames said we will take this deal but do to the economics we have to spend to 5 million under the cap.

Would you support the team making that decision?

Heck yeah. Let's not kid ourselves, the tax payer funding of the arena is basically so they can pay these huge salaries.

[Samonadreau]

Originally Posted by mccalgary71

Of course it cuts into Flames revenue. When setting prices they have to take the tax into account when figuring out how high the market will pay. Cone on. Common sense.

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Put it this way if its 2/3 paid by the flames and they just hike their prices by 15%, and 10% is used to pay it off its the same thing the fans will be fronting the extra cost knowing its being used to pay off the new arena. Either way fans are paying 1/3. And the fans would realize this is why and would be willing to pay more. It isnt cutting into the teams revenue becayse that margin wouldnt be there otherwise

[jayswin]

Originally Posted by JerryUnderscore

I love how Bettman said the other day that negotiations are over and when a reporter responded with "For now?" he doubled down with "No, negotiations are over. The Flames aren't pursuing a new building."

Then as soon as Nenshi released the city's proposal, Ken King immediately came out with, "We're planning to release a counter offer in the next few days."

I mean, I think we all knew Bettman was full of it but this is such a blatant reversal. Did anyone seriously think the Flames were throwing in the towel on getting a new arena?

It's a funny time for sports arena/stadium funding. Two things are happening


a) The writing is on the wall for sports revenue as leagues and owners knew it. People can see it coming, it was very heavily dependent on huge network deals which people are quickly turning away from.


b) The average citizen is becoming much more knowledgeable towards stadium deals and how silly they really are in the grand scheme of your tax dollars.


Sports teams are now at the beginning of what will likely be the swan song for sports revenue as we knew it, and at the same time are being skewered more and more by cities and citizens who understand with data and stats how to battle owners instead of just "Well, it doesn't seem right".

The Flames have spent years going about this poorly and their penalty is that they are now negotiating in a new environment where sports owners won't be given a free pass to spew some fluff statement about culture enrichment to steal hundreds of millions of dollars for their benefit.

[jayswin]

Originally Posted by Samonadreau

Put it this way if its 2/3 paid by the flames and they just hike their prices by 15%, and 10% is used to pay it off its the same thing the fans will be fronting the extra cost knowing its being used to pay off the new arena. Either way fans are paying 1/3. And the fans would realize this is why and would be willing to pay more. Its the same thing that happened in edmonton and it isnt cutting into the teams revenue.

The important distinction in your scenario is that if 2/3's are paid for by the Flames and they raise ticket prices to comensate then it's attending fans who will make up the difference.

Citizens does not equal attending fans. Making the citizens pay more than they have to should be heavily scrutinized and opposed. Attending fans can be charged whatever the team feels like charging, it's not relevant or important as they are choosing to attend, where as low income citizens have no choice but to pay higher taxes if they are implemented.

[Classic_Sniper]

Nenshi pretty much echoed some of points I had made. There's profit to be made here and the $185M is an investment. To me, our $185M is just as important as the Flames' $185M, so there needs to be a give and take here, there needs to be compromise from both sides. The good thing I see here is that there's wiggle room for that. I don't think both sides have given their best offers yet and I believe they will at some point slowly meet in the middle as negotiations eventually do.

Right now, my personal belief is that CSEC is looking at this arena deal as a typical business transaction. The problem is, you can't look at this from a typical business transaction because this deal involves public taxpayer money. These head honchos are successful today because of their ability to broker good deals for themselves, so of course naturally, they're looking for the best deal once again.

What I suspect to make this deal happen: Murray Edwards and co, will have to aknowledge that they'll have to take less then they had initially anticipated because they don't have the leverage at the moment, they don't have the public on their side, Nenshi will likely win again in a landslide and there's too many issues with The Coyotes, Hurricanes, Panthers and Isles for the BoG to approve of our relocation. They're stuck and The CSEC can't win imo, they'll likely concede and us taxpayers will gain some monetary benefit from the arena.

[EldrickOnIce]

Originally Posted by GGG

If the flames said we will take this deal but do to the economics we have to spend to 5 million under the cap.

Would you support the team making that decision?

The Flames would fail to be competitive, rarely make the playoffs, and never be a contender.

So no, of course not. No one will support that.

[Robo]

How out of touch is the csec if they truly thought they could swing an election in their favor by saying that crap. They obviously don't think much of the average calgarian, very happy with the response they have recieved and I'm sure that changed their tune.

[Bill Bumface]

Originally Posted by GGG

If the flames said we will take this deal but do to the economics we have to spend to 5 million under the cap.

Would you support the team making that decision?

That just tells me that the teams economic viability is more questionable than we thought.

I also watched the Leafs, Rangers and Red Wings out spend us by more than that for a long time without complaining too much.

[longsuffering]

Originally Posted by Cali Panthers Fan

You pay for your airline tickets, and included in that is an airport improvement tax that all users of the airport are forced to pay. The airline doesn't cry foul that they're losing revenue because without an airport they don't have a place to house their flights which create their revenue in the first place. It's a way to get users of the facility to contribute to a proper and modern airport without having the airlines foot the bill. It seems really straightforward to me.

I think this analogy nails it. When CaliFlamesFan later tried to address incremental price increases or opportunity costs, he inadvertently and unnecessarily clouded the issue.

When a person flies, they pay the airport improvement tax. It is collected by the airlines but is ultimately paid to the airport authority. No one, including the airlines, consider it to be a contribution funded by the airlines. It is a legally mandated charge, collected by the airlines which the airlines understand will pay for airport upgrades, etc.

Whether the consumer cares about the the amount of the tax or only the bottom line cost of the ticket, the airport improvement tax is most definitely a part of that cost.

The ticket tax, which is not a exclusively a Flames ticket tax, is exactly the same thing. The users, including Flames ticket holders, Hitmen ticket holders, concert ticket holders, etc., pay a provincially mandated tax to pay for the construction of the new facility. How much or how little it impacts how the Flames price their tickets is immaterial. It's only purpose is to provide funding for the new arena.

This is the same scenario as the airport improvement tax.

[ah123]

The more I think about this, the more I think that CalgaryNext is the end goal for the Flames, and the way they are going to get is by getting replacing Nenshi (and some alderman) with Bill Smith and alderman who are more sympathetic to their needs.

I don't really think the arena is the issue, it is the development opportunity that they want (i.e. West Village)

[jayswin]

Nenshi really is public enemy number one for the Flames, and if they could have predicted his reign they likely would have fast tracked something before 2010. They're path to an arena is a tale of a series of unfortunate events ( a lot of it their own doing) when you think about it.

2007 - Fandon at an all time high, they start the feeling process, could have had a sweet deal with a building friendly mayor

Then they add the Stamps to their family and try to think bigger.

Then a fiscal hawk gets elected and puts an end to the developer gravy train in our city

Then a flood puts them behind with the need to immediately renovate and spend millions of their own money

Then pubic opinion on sports funding starts to become educated due to a lot of high priced failures down south

Then a recession (new reality?) hits and more and more citizens have no more appetite to fund billionaires

Then the Flames make the playoffs unexpectedly, the Flames see dollar signs and rush out a half assed power point presentation to try to cash in on fan excitement, it backfires spectacularly and sets the tone for a public perception of idiocy/non-preparedness




Absolutely no doubt that they were genuinely giddy for the possible departure of Nenshi, and their friends at the Calgary Sun were pushing as hard as they could to suggest that he was hated so badly that he may not get re-elected. They knew that a new mayor would likely cancel out many of those unfortunate events. But I think now they realize they are stuck with him and are probably panicking behind the scenes.

There's been many times they could have secured a deal and have simply pushed for the most they could and failed to do anything in a timely fashion along the way.

[robaur]

Originally Posted by longsuffering

I think this analogy nails it. When CaliFlamesFan later tried to address incremental price increases or opportunity costs, he inadvertently and unnecessarily clouded the issue.

When a person flies, they pay the airport improvement tax. It is collected by the airlines but is ultimately paid to the airport authority. No one, including the airlines, consider it to be a contribution funded by the airlines. It is a legally mandated charge, collected by the airlines which the airlines understand will pay for airport upgrades, etc.

Whether the consumer cares about the the amount of the tax or only the bottom line cost of the ticket, the airport improvement tax is most definitely a part of that cost.

The ticket tax, which is not a exclusively a Flames ticket tax, is exactly the same thing. The users, including Flames ticket holders, Hitmen ticket holders, concert ticket holders, etc., pay a provincially mandated tax to pay for the construction of the new facility. How much or how little it impacts how the Flames price their tickets is immaterial. It's only purpose is to provide funding for the new arena.

This is the same scenario as the airport improvement tax.

This is correct. Which is why, yesterday, when King was speaking on this topic - I stated that he was living in his own distorted reality. Trying to use beginner-Econ theory in this manner is very stupid.

What King is describing is a perfect economy, where items are perfectly priced...not a dollar more/not a dollar less. In reality, this doesn't exist. No system is perfect.

- Adding ticket tax on top / raising ticket prices creates two different reactions from buyers. A buyer is more likely to accept a ticket tax than to accept a ticket price increase.

[longsuffering]

Originally Posted by EldrickOnIce

The Flames would fail to be competitive, rarely make the playoffs, and never be a contender.

So no, of course not. No one will support that.

So you mean basically it would remain how it's been the past 20 years or so? (With one notable exception)