Arena negotiation discussion. UPD: Flames release their proposal

[CF84]

When the new arena is built, which it will be someday, I think it should look like Brian Burke's head. He's our Trump, and everyone else already believes that Burke is the one who makes all of the decisions, so why not just roll with it. The hair on the arena could be removable and the stairs leading into the arena could look like a messy tie. I would go.

[Jay Random]

Originally Posted by Dr. Pepper

How much $$$ have the Flames made since 1980? Bought the team for $16M then, have rec'd 10 expansion fees (I think), plus yearly profits. What does that add up to I wonder? Plus what's the team worth now? What's the team worth once they get a new building? PAY FOR THE DAMN NEW ARENA YOURSELVES YOU GREEDY BASTARDS!!!

From the mid-1990s to 2004, the Flames were regularly losing money over and above the amounts received in expansion fees. (All but a few big-market teams were doing so, since player salaries were rising much faster than revenues.) They also lost substantial sums of money from 1980 to 1983, when they were operating out of the Corral; but the entire 1980s, in terms of profit and loss, is a drop in a bucket compared with the figures after player salaries began their long upward spiral.

You ask what the team is worth now. Forbes estimates $410 million – but if the club has to continue operating on flat revenue from the Saddledome while league-wide revenues (and therefore the salary cap) continue to rise, and cannot move either to a new arena or a new city, it's highly unlikely that the owners would find a buyer at that price, and in time they might not find a buyer at all. NHL owners have sold at a loss before, and franchises have gone out of business before. The idea that a franchise will always go up in value is a myth. Economists, with an unusual display of wit, call that myth ‘Greater Fool Theory’.

[GGG]

Saddledome revenues aren't flat though they increase at between 5% and 10% per year plus the Flames ticket exchange site was a new revenue stream for the flame. And since outside Detroit teams all have new arenas now the other teams won't see revenue increase greater than their ability to increase ticket price which outside the initial jump of a new arena is relatively the same as the Flames

So the Flames ability to increase revenue right now is equal to other teams. So there shouldn't be a situation where the Flames become out revenued by a rising cap

[Lanny_McDonald]

Originally Posted by GGG

So the Flames ability to increase revenue right now is equal to other teams. So there shouldn't be a situation where the Flames become out revenued by a rising cap

No, it isn't. Hence the need for a new building. I mean, wow. How has this point been lost on you.

[Reaper]

Originally Posted by GGG

Saddledome revenues aren't flat though they increase at between 5% and 10% per year plus the Flames ticket exchange site was a new revenue stream for the flame. And since outside Detroit teams all have new arenas now the other teams won't see revenue increase greater than their ability to increase ticket price which outside the initial jump of a new arena is relatively the same as the Flames

So the Flames ability to increase revenue right now is equal to other teams. So there shouldn't be a situation where the Flames become out revenued by a rising cap

Little Caesars Arena opened September 5.

[kevman]

Originally Posted by Reneeee

I know I threw this out awhile back but why not plebiscite the general taxpayers on whether or not we would take the deal?? Or is the current council nervous that we would vote in favour?

Outside of this forum, which is still heavily divided, the majority of citizens are siding with the city on this one.

If the arena goes to a plebiscite it's not going to end well for the Flames.

[chubeyr1]

Originally Posted by kevman

Outside of this forum, which is still heavily divided, the majority of citizens are siding with the city on this one.

If the arena goes to a plebiscite it's not going to end well for the Flames.

A new arena will be built. If the Flames are part of this the city loses money. If they are not part of this the city loses more money.

All around its a bad investment, yet the city will invest. When they choose to invest is the key.

[Boreal]

Property taxes are the bare minimum to even attempt at covering infrastructure costs.

https://twitter.com/jameswardenmn/st...60163003715585

Bad enough when development can't cover maintenance obligations but now it doesn't even have to chip in at the beginning. @StrongTowns

[getbak]

I noticed that all the CalgaryNext ads in the men's room were replaced by Stamps/Hitmen/Roughnecks ads at Monday's game. I'm pretty sure they were all still there during the Garth Brooks concert.

So, I guess they're super serious about not wanting to build that building that no one wants anymore.

[GaiJin]

Watch Rockyview jump in. Ladies and Gentleman, your 2019 Balzac Flames.
I'd be onboard with some City money going in, if they switched the ticket tax for a player tax. I wonder how many players actually pay payroll tax in Alberta? Are some players professional corporations? Do they buy business licences?

[Makarov]

Originally Posted by GaiJin

Watch Rockyview jump in. Ladies and Gentleman, your 2019 Balzac Flames.
I'd be onboard with some City money going in, if they switched the ticket tax for a player tax. I wonder how many players actually pay payroll tax in Alberta? Are some players professional corporations? Do they buy business licences?

Where the fata is Rockyview going to find $300 million? And even if it did, why the fata would it give it to the Flames?

[GGG]

Originally Posted by New Era

No, it isn't. Hence the need for a new building. I mean, wow. How has this point been lost on you.

Explain to me how Edmontons revenue is going to keep rising faster than the Flames? They had one massive jump last year as a result of the the building and now things should increase at the rate the market will bear which % wise should be roughly equal to the Flames.

[Ozy_Flame]

Originally Posted by GaiJin

Watch Rockyview jump in. Ladies and Gentleman, your 2019 Balzac Flames.
I'd be onboard with some City money going in, if they switched the ticket tax for a player tax. I wonder how many players actually pay payroll tax in Alberta? Are some players professional corporations? Do they buy business licences?

No. Ken Dryden tried this in the seventies, now there is a specific rule about this I think.

[Lanny_McDonald]

Originally Posted by GGG

Explain to me how Edmontons revenue is going to keep rising faster than the Flames? They had one massive jump last year as a result of the the building and now things should increase at the rate the market will bear which % wise should be roughly equal to the Flames.

Seems pretty simple. More events other than Oiler games. More private boxes and elite level seating. More parking revenues, of which the Flames get none. More and better concessions. More revenues generated from their entertainment district, which Katz Group has a hand in developing. Stuff as small as renting out their practice facility. If you can't see that the Oilers, and most teams, have a revenue advantage, I don't know what to tell you.

[GGG]

Originally Posted by New Era

Seems pretty simple. More events other than Oiler games. More private boxes and elite level seating. More parking revenues, of which the Flames get none. More and better concessions. More revenues generated from their entertainment district, which Katz Group has a hand in developing. Stuff as small as renting out their practice facility. If you can't see that the Oilers, and most teams, have a revenue advantage, I don't know what to tell you.

So you agree then this is a one time boom realized in the first year or two of a new arena being opened. Then in future years relative increases in revenue are roughly equal.

[Strange Brew]

Originally Posted by New Era

Seems pretty simple. More events other than Oiler games. More private boxes and elite level seating. More parking revenues, of which the Flames get none. More and better concessions. More revenues generated from their entertainment district, which Katz Group has a hand in developing. Stuff as small as renting out their practice facility. If you can't see that the Oilers, and most teams, have a revenue advantage, I don't know what to tell you.

He is talking about growth in revenues compared to today. In other words, if Flames are able to spend to the cap today and remain competitive, other teams revenues should not grow at a faster pace just because their arena is newer.

There are many posters on here with incredibly strong opinions and personally, I don't mind seeing the passion come through. But some civility wouldn't hurt and maybe everyone should take the time to read and understand someone else's take even if you don't agree. Just my two cents.

[EldrickOnIce]

Will be interesting to see operating revenue from 2017, and how much the Oilers revenue increased. Hypothetically :
If it increased to 10M more per year than Calgary, that is not a one time boost, it's an every year boost.
At 4% growth across the board, that 10M extra revenue per year becomes almost 15M extra per year over 10 years time. The 10 is not insignificant, nor is the growth.
So while growth percentage is constant it is not particularly relevant.

[GGG]

Originally Posted by EldrickOnIce

Will be interesting to see operating revenue from 2017, and how much the Oilers revenue increased. Hypothetically :
If it increased to 10M more per year than Calgary, that is not a one time boost, it's an every year boost.
At 4% growth across the board, that 10M extra revenue per year becomes almost 15M extra per year over 10 years time. The 10 is not insignificant, nor is the growth.
So while growth percentage is constant it is not particularly relevant.

Good point about the compounding of revenue increases.


https://www.statista.com/statistics/...teams-in-2010/

Above are the revenue statistics extracted from the Forbes value putting the flames mid pack.

https://www.statista.com/statistics/...teams-in-2010/

And the operating incomes where the Flames are top 10.

The only team you would expect to leap frog is in terms of revenues is the Oilers next year. Outside of that if you expect revenues to grow as a % equally Calgary's position on that chart will remain as all of the cities above and below already have realized the new revenue streams. So even with compounding where the rich get richer and the poor get poorer the Flames will remain at the midpoint.

So given the flames can spend to the cap today and they will be at the midpoint of continued revenue growth Ken Kings statement that they need a new arena to maintain a competitive team is likely false.

[Wormius]

The problem with these polls is the context is in flux. Presently, I am sure we agree the City is being reasonable, next week or month who knows? People will look at the poll and wonder, "wtf?" It would only make sense for a poll where you could change your vote over time.

[Ducay]

Originally Posted by GGG

So given the flames can spend to the cap today and they will be at the midpoint of continued revenue growth Ken Kings statement that they need a new arena to maintain a competitive team is likely false.

CAN spend to the cap, which has nothing to do with profitability at that level. They might be taking lower returns short term to ice a competitive team in order to build following and desire for the new arena (spitballing) even if the revenues don't support it in the Dome.

Lets say they determine no arena will happen, they could then lower their spending to well below the cap to ice a team that they can afford long term within their budget.