Arena negotiation discussion. UPD: Flames release their proposal

[Conroy4Mayor]

This Amazon thinking has some real promise...

Flames should "give in" to CSEC and agree to own the building, then they should turn around and gift the arena to Jeff Bezos in exchange for locating their second head office to Calgary. King, Bettman and Burke would lose their minds as Bezos taught them a thing or two about business.

[Makarov]

Originally Posted by New Era

I wish you would quit trying to forward the fallacy that the MTS Centre in Winnipeg was 100% funded with private money. It was not. The government kicked in 30% of the cost of the arena, and did so to build an undersized, under-serviced arena - by NHL standards. The only reason they Jets are making a go of it, is because of the deep pockets of True North. We'll see how long True North will put up with that money pit.

Here's a good article reviewing the public funding of arenas and stadiums around the country. I wish they had spoke to the privately funded arenas, and how only one of them did not lead to the demise of the owners and forcing sales of the teams and buildings in question.

http://calgaryherald.com/news/local-...h-public-funds

Sorry, I wasn't intentionally trying to mid lead. Didn't realize the City and Province contributed $40 million. Still, that fact does not really assist the Flames
At all. It is still far less in real dollars, and less in proportion, than the City of Calgary has already offered. In a far worse market. With an unsuccessful team (no playoff wins). And according to the most recent Forbes report, the franchise is profitable.

So it is very likely the Flames can succeed in Calgary under the City's proposed model. The issue is clearly, as others have pointed out, will the franchise be profitable enough to make it worth the owner's while. That's fair enough but they had better not expect much sympathy around these parts. They sure as hell aren't doing us any favours.

[Badgers Nose]

Originally Posted by Conroy4Mayor

This Amazon thinking has some real promise...

Flames should "give in" to CSEC and agree to own the building, then they should turn around and gift the arena to Jeff Bezos in exchange for locating their second head office to Calgary. King, Bettman and Burke would lose their minds as Bezos taught them a thing or two about business.

I think it's more likely Conroy becomes mayor.

[topfiverecords]

Originally Posted by GirlySports

Edwards would just sell the team then. Why get an arena for someone else?

Brokering the arena deal prior to selling can be of value if it's good for the owners. The team's buyer doesn't have a ? hanging over the sale and doesn't have to do the work to get a deal done.

[442scotty]

Originally Posted by Badgers Nose

I think it's more likely Conroy becomes mayor.

Now there's an idea!

[Flame On]

Originally Posted by ynwa03

I really wish people would stop using the term "the city"
The city is us. We are the city.
The Flames are trying to get us, the taxpayers, to pay for a majority of their arena.

It seems to me people still fully on the side of the Flames are mostly fans who don't live in Calgary, or do but have a personal or professional connection to the team/owners.

I understand the main point you're making, the city is us. However you and your side (and ultimately I think we're all on the same side of wanting a fair deal for taxpayers, fans and the team) seems to want it both ways.

The city, or as you put it "us" came out with a press conference stating they want an entertainment/cultural district and continuing development area that includes a stadium. The Flames want to contribute to a stadium (their initial numbers for that contribution are agreed, laughable) but the Flames are getting accused of not bringing anything to the table when they don't want to pay for 3/3'rds of the project ultimately. "what is the city and people getting out of it if its not paid back" you're getting the thing that the Mayor/City/Us have just stated you wanted surely.

[jammies]

Originally Posted by Ducay

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.

Originally Posted by VladtheImpaler

But, if they have to front $300M (just making up a number) to make $25M/year (just making up a number) and have the value of the franchise appreciate by, say $30M, the deal makes no sense, as they could do much, much better investing the $300M elsewhere..

Owning an NHL franchise is a poor investment, full stop. That the Flames claim - and I believe them - that the owners have never taken money out of the team, but have reinvested it into the team, means all this time they've been making a 0% ROI, other than the appreciation in value of the team, and, if you have no interest in selling, that kind of "profit" is as imaginary as ticket tax "revenue".

The value in owning an average NHL team is twofold. First, prestige, because you own something only a select few can, and even those that have the money and desire cannot necessarily get into the club due to both limited supply, and snobbery (see Ballsilie, Jim). Second, control, as in control of the ultimate toy. So there is little more rational basis in team ownership than there is in fandom, which is why it is especially annoying for Ken King to play up the emotional "value" of the team to the city, which has as little to do with finances as the emotional "value" of the team to the owners.

Making the team profitable in real terms isn't the argument, because that won't happen, the argument is who should be the one to take the bigger loss so the other side can make a smaller gain: the City, or the Flames' owners. I'm part of the city, but not (yet) an owner, so I know where my vote goes.

[jayswin]

Originally Posted by Flame On

I understand the main point you're making, the city is us. However you and your side (and ultimately I think we're all on the same side of wanting a fair deal for taxpayers, fans and the team) seems to want it both ways.

You may be in a bit of a social bubble on the bolded. Believe it or not there's actually a huge percentage of citizens who don't want a fair deal for everyone, at all. They don't want any money going to help billionaire owners build an arena.

It may be a much larger percentage than you may think. There's literally hundreds of thousands of citizens in this city that worry about any number of things financially and don't give a **** about a new arena.

Our sports fandom on this site kind of clouds that a little, I believe. Which makes it even more incredible how horribly the Flames have handled this when even our hardcore fan base on CP is overwhelmingly in support of the city.

[ynwa03]

Originally Posted by stamps

I get the impression from Ken King that the city is including in their contribution the extension of 17 avenue through the Stampede grounds and some underpasses and Green line infrastructure that is being built regardless ... which in my understanding is being paid back with Flame revenue through a rent or tax agreement ... the land is vacant and does not cost the city anything as of now ... the demolition of the Saddledome is also being counted as part of the city's contribution , a building the Flames do not own ... I have to see what the Flames are offering before I pass judgement but, as is , I can see the Flames point of view with the way the city has structured their proposal as not really being that fair ...

You are being dishonest here. Infrastructure upgrades (17th Ave, LRT, Utility upgrades) are listed as indirectly being footed by Calgarians. Which means the cost for these is not factored into our 1/3 contribution. These costs are not being paid back.

Land is vacant as of now - but does that mean it has no value, or would not bring the city revenue if sold or developed some other way?

And the Saddledome demolition is counted as a city expense because without an arena deal the city has no reason to demolish it. The Flames insisted on this condition as part of the arena deal.

Have you seriously not been following this thread or the actual deal the city announced on behalf the taxpayers? All your points are factually untrue and an attempt to fog this issue.

[Flame On]

Originally Posted by jayswin

You may be in a bit of a social bubble on the bolded. Believe it or not there's actually a huge percentage of citizens who don't want a fair deal for everyone, at all. They don't want any money going to help billionaire owners build an arena.

It may be a much larger percentage than you may think. There's literally hundreds of thousands of citizens in this city that worry about any number of things financially and don't give a **** about a new arena.

Our sports fandom on this site kind of clouds that a little, I believe. Which makes it even more incredible how horribly the Flames have handled this when even our hardcore fan base on CP is overwhelmingly in support of the city.

Well what is that percentage that you are naming then?

To me it's how its framed. If you inanely put it: hey Calgary do we want to give money to help billionaire owners... you are going to get an unfavorable result.
But if you ask: Hey Calgarians, seeing as the City wants a new stadium and district which will enhance the area and provide new entertainment options and be really great for the Flames, is there a deal to be made?

You will probably see a better result. Thats the negotiation. Which has all broke down thanks to KK and the org I admit.

[longsuffering]

A case for why revenues provided from a ticket tax is NOT a Flames contribution.

1. The Flames do not have the ability/authority to impose a ticket tax. This authority is granted to the City by the Province. Essentially, this money belongs to the taxing authority - in this case the City. Who collects it is immaterial.

2. The Flames are wrong to consider ticket taxes as their revenue in any case. They will not include in their revenues. For the accountants out there, the proceeds from seasons tickets would be recorded as (using $100 as the base price of the ticket with a ticket tax of $15 for a total cost of $115).

Dr: Cash or A/R $115
Cr: Hockey revenue ($100)
Cr. Ticket tax revenue payable (what was collected) ($15)

3. Let's also consider that no one is forcing the Flames to incorporate a ticket tax in their funding model. They can choose to go ahead without it. Let the free market and the Flames determine what "the market will bear" as far as ticket prices go, charge that amount and record that full amount as HRR then use those incremental proceeds to fund the Flames portion of arena costs.

Of course the Flames don't want this. But calling a ticket tax 'theirs', they want their cake and to eat it too. They support a tax but claim it is from their revenue. They can't have it both ways. It's one or the other. HRR or a liability for taxes collected on behalf of the City.

Considering this, the City is being quite generous by showing ticket tax as a third, independent contribution and not a City of Calgary contribution.

To me it suggests the City respects and recognizes that the arena users are stakeholders in this discussion, not a subset of CSEC.

[getbak]

I really wish there was video of the various STH sessions Ken King has spoken at over the years. I went looking through some old posts where I wrote about stuff he said at STH sessions I attended.

I found this one from early 2011 interesting. It references a luncheon I attended just before Christmas in 2010.

Originally Posted by getbak

Another thing to note that King mentioned at the STH luncheon is that the team does not plan to go to the government for funding of the arena. All he said is that they will be working with the City on zoning and land-rights issues and surrounding infrastructure improvements. I think he also mentioned on working on "creative" financing options with the government, but that they won't be doing the same kind of song and dance that we're seeing from Katz in Edmonton.

[mikeecho]

Originally Posted by getbak

I really wish there was video of the various STH sessions Ken King has spoken at over the years. I went looking through some old posts where I wrote about stuff he said at STH sessions I attended.

I found this one from early 2011 interesting. It references a luncheon I attended just before Christmas in 2010.

King saying the Flames would never ask the city fire money is true in his mind. His position has been that the Flames don't need a new arena. He suggests that the city needs a new arena and that the Flames are willing to contribute. If you follow that crooked thinking, they're not asking the city for any money. They're white knights coming to help the city.

[442scotty]

People saying that the majority of Calgarians would not want to give any money to the Flames is correct.

In fact I would go further and say that the majority of Calgarians would say NO to the airport tunnel, the downtown library and the ugly mandatory art and that's just three off the top of my head.

And if you told people to make only one choice out of the four items then I suspect that the new arena would be a first choice . If people had a chance to vote democratically on every major project in this city, nothing would ever get done.

We voted in the clowns at city hall hoping that they will do right by our money but for me I can think of a lot worse ways the city has misused our money than a new arena

[442scotty]

tdouble post

[D as in David]

Originally Posted by djsFlames

What's with King pausing and smiling in the middle of every point he makes? Is that supposed to make people sympathize more with the crap he says? Seems especially ill timed prior to making a condescending remark toward the other side.

For a guy delivering bad news, he sure did smile a lot. It's a practiced smile and not a sincere one. Part of the reason why people find it hard to trust him, IMO.

[GGG]

Originally Posted by 442scotty

People saying that the majority of Calgarians would not want to give any money to the Flames is correct.

In fact I would go further and say that the majority of Calgarians would say NO to the airport tunnel, the downtown library and the ugly mandatory art and that's just three off the top of my head.

And if you told people to make only one choice out of the four items then I suspect that the new arena would be a first choice . If people had a chance to vote democratically on every major project in this city, nothing would ever get done.

We voted in the clowns at city hall hoping that they will do right by our money but for me I can think of a lot worse ways the city has misused our money than a new arena

This is not a good argument for supporting an arena. Saying it's not the worst way to waste money means you should be against it.

[Lanny_McDonald]

Originally Posted by longsuffering

2. The Flames are wrong to consider ticket taxes as their revenue in any case. They will not include in their revenues. For the accountants out there, the proceeds from seasons tickets would be recorded as (using $100 as the base price of the ticket with a ticket tax of $15 for a total cost of $115).

Are you sure on this? Doesn't this break down to gross revenues versus net revenues? The Flames sell a ticket, and that becomes revenue to them, every single dollar. They are expected to collect every dollar, but then deduct associated taxes, which along with business costs, leads to net revenues. This is also why HRR are clearly defined in the CBA, and taxes on tickets are not defined as HRR. Yes, this is one of those semantics arguments, trying to define what "sex" is, but it is the reality of the claim. The collection of the revenue would not exist without the ticket there in the first place, nor the transaction of selling the ticket and collecting the revenue. Just like gas taxes, the retailer has to collect and submit them. They are submitted based on revenues collected, so are part of the gross revenues of the business. Please correct this if any of it is inaccurate.

[stamps]

Originally Posted by ynwa03

You are being dishonest here. Infrastructure upgrades (17th Ave, LRT, Utility upgrades) are listed as indirectly being footed by Calgarians. Which means the cost for these is not factored into our 1/3 contribution. These costs are not being paid back.

Land is vacant as of now - but does that mean it has no value, or would not bring the city revenue if sold or developed some other way?

And the Saddledome demolition is counted as a city expense because without an arena deal the city has no reason to demolish it. The Flames insisted on this condition as part of the arena deal.

Have you seriously not been following this thread or the actual deal the city announced on behalf the taxpayers? All your points are factually untrue and an attempt to fog this issue.

I'm just parroting what I have heard Ken King alude to in his press conference .... he also mentioned the Flames would end up paying for 120% of the new arena ..... that is where I have gotten my facts .... I guess we will see who is being honest here in the next week or so when the finer details emerge ...

[Locke]

Originally Posted by NiklasSundblad

King first mentioned a new arena to the media in 2007. In 2014, 7 years later, the bottom fell out of the oil market, then a year later, with the city in an economic tailspin, he presents something that clearly had no more than a few weeks of work put into it.

Ken King claimed to be talking to architects and construction firms in 2009:

http://calgaryherald.com/news/local-...edmonton-arena

The most amazing thing is that no one in the media covering this has even casually suggested that maybe Ken King shouldn't have his job. Imagine what he could have gotten away with with 100 dollar oil and Bronconier.

I've said the same thing numerous times. $100 Oil, Bronconnier and a Conservative Government flush with cash? They might have stood a shot at getting CalgaryNEXT.

Even Edmonton at least got in 'Before the Fall' and even then they're a Government town, so its a different ball game.

They sat at the card table too long and all of a sudden their hand became worthless on the flop.