Arena negotiation discussion. UPD: Flames release their proposal

[Fire]

Originally Posted by troutman

I assume this mostly has to do with a weak Canadian dollar.

This is a pretty average value for the Canadian dollar compared to the US dollar over the last 40 years. I wouldn't call it weak. It could be a lot worse.

[Bingo]

Originally Posted by Fire

This is a pretty average value for the Canadian dollar compared to the US dollar over the last 40 years. I wouldn't call it weak. It could be a lot worse.

For sure but that doesn't mean it's not a big issue when you think of par a few years ago.

$80M payroll adds about $27M in costs since the Jets moved back to Winnipeg.

[getbak]

Originally Posted by Fire

This is a pretty average value for the Canadian dollar compared to the US dollar over the last 40 years. I wouldn't call it weak. It could be a lot worse.

Average for the last 40 years, but weak for the last 13, which is how long the NHL revenue-sharing system has been around.

[GGG]

Originally Posted by Bingo

The Flames play to 98% capacity.

So no

Do you actually believe that 98% of tickets are actually sold? That is 340 seats a game that are empty. Just looking at the whites and the general shape of the empty seats you can see the ones that aren't sold in the 300s and the whites. It's more than 340. It's more than 680 too if you assume that half the games are real sellouts

I'm not sure what that number is based on but there is definately an inflation going on somewhere.

[Bingo]

Originally Posted by GGG

Do you actually believe that 98% of tickets are actually sold? That is 340 seats a game that are empty. Just looking at the whites and the general shape of the empty seats you can see the ones that aren't sold in the 300s and the whites. It's more than 340. It's more than 680 too if you assume that half the games are real sellouts

I'm not sure what that number is based on but there is definately an inflation going on somewhere.

Such a pattern on this site these days, I guess its born of the time of fake news and that anyone can find a source for anything.

But use facts unless they don't work with your view and if that's the case then suggest the facts aren't real.

Are you suggesting the Flames have an attendance issue? I get that a recession down may have more unsold seats than say in the last 5 years but the building is essentially "full" most nights.

[memphusk]

If they fill to 98 % now that must suggest nobody is spending money on concessions then?

[Freeway]

Originally Posted by Bingo

Such a pattern on this site these days, I guess its born of the time of fake news and that anyone can find a source for anything.

But use facts unless they don't work with your view and if that's the case then suggest the facts aren't real.

Are you suggesting the Flames have an attendance issue? I get that a recession down may have more unsold seats than say in the last 5 years but the building is essentially "full" most nights.

They changed their ticketing reporting 2-3 seasons ago; before the tickets they distributed to Co-op/SportChek to be sold in the 300s were all counted as "sold," now they only count tickets distributed total. The most accurate way would be tickets scanned, but that would only reflect attendance and under-report cashflow slightly.

[jayswin]

Originally Posted by ken0042

Just because you don't want to watch, doesn't mean nobody wants to. As mentioned earlier, Hitmen have the best attendance in the league. And probably one of newest and nicest arenas in the league. A lot of the considerations for why the Flames might need a new arena go away at a Hitmen game; due to the fact that they are at 40% of capacity. There's no lineups for food or washrooms, and there is plenty of space in the concourse.

Originally Posted by IamNotKenKing

What do you base this on?

It's the WHL, most of the arenas are small city dumps built in the 60'-80's. The Dome is getting old for the NHL, but let's not pretend it's not at the top of the heap as far as junior facilities goes.

[curves2000]

I do wonder how much of the revenue change for the Flames games, in general, is also due to the corporate nature of the fan base? I do think that a lot of companies and corporate boxes are spending less on games on the entertainment side. The tickets and the attendance for the games might be similar or slightly down but the expensive wine, the $75 popcorn bowls, the prime rib dinner etc are for sure down. Talk to the staff who work the boxes and the bartenders who are in the Chrysler Club.

If a 1000 less people are NOT spending $100 a game, with pre-season that's almost $5 mil a year in revenue.

If we took 2013 & 2014 attendance figures and applied the average revenue per guest, adjusted for inflation on ticket, concession and merchandise sales, I am confident the Flames would be a top 10 team on the revenue side.

The older Dome is an issue for the Flames from a revenue side but its not the only piece of the puzzle and the Flames aren't the only one dealing with it. A lot of corporate spending in this city has evaporated, a lot of energy companies IPO'd at the wrong time, share prices collapsed and a lot of energy workers are just waiting for 1 more bull run on their options to cash out.

[morgin]

One of the only issues I have with the idea of the Flames being a have not based largely on the age and inadequacy of their building is that you have to believe that with a new building there is extra money in this city to boost their revenues that they are currently leaving on the table. I’m skeptical of that and based on the way the owners are playing this you have to believe they are too. As many have said, without the numbers clearly laid out this is all speculation anyway, but if I had to fashion a guess, it would be that the rapid rise in the salary cap has exceeded the capacity of this city’s sports entertainment revenue pot. This is especially probelmatic for a mid market team when you also factor in the purported transition from have to have not has also coincided with a recession and rapidly expanding USD player salary line item.

NA sports as a whole are facing a bit of a transition period in terms of fan interest and willingness to spend money. I know this has been covered in the thread, but you have to really wonder if the fact that $ per patron during in game experience decreasing on average along with runaway salary costs to run the team and the city not being anywhere near it’s previous growth curve means a new NHL rink will simply never be viable. If that’s the case I wish they would just come out and say that bluntly though. “We can’t make the math work on a new rink funded entirely by us because we’re a smaller market in the league and we think we’ve already tapped out how much money we can realistically earn per game and this isn’t going to get better”. At least then the question is framed around the issue very clearly - should we use public funds to keep a team in the city that might not otherwise be viable to stay at the league’s current cost structure. You’d still have a lot of detractors, but I think there would be a lot more support if there was the appearance of some intellectual honesty with what’s going on. Like I said, the above is all speculative, but to me it’s seems a lot more likely than some new building being a magic potion to getting the flames back in the top 10 in revenue.

[Bingo]

Originally Posted by Freeway

They changed their ticketing reporting 2-3 seasons ago; before the tickets they distributed to Co-op/SportChek to be sold in the 300s were all counted as "sold," now they only count tickets distributed total. The most accurate way would be tickets scanned, but that would only reflect attendance and under-report cashflow slightly.

So more accurate now, but doesn't speak to who's actually in the seats.

[Bingo]

Originally Posted by morgin

One of the only issues I have with the idea of the Flames being a have not based largely on the age and inadequacy of their building is that you have to believe that with a new building there is extra money in this city to boost their revenues that they are currently leaving on the table. I’m skeptical of that and based on the way the owners are playing this you have to believe they are too. As many have said, without the numbers clearly laid out this is all speculation anyway, but if I had to fashion a guess, it would be that the rapid rise in the salary cap has exceeded the capacity of this city’s sports entertainment revenue pot. This is especially probelmatic for a mid market team when you also factor in the purported transition from have to have not has also coincided with a recession and rapidly expanding USD player salary line item.

NA sports as a whole are facing a bit of a transition period in terms of fan interest and willingness to spend money. I know this has been covered in the thread, but you have to really wonder if the fact that $ per patron during in game experience decreasing on average along with runaway salary costs to run the team and the city not being anywhere near it’s previous growth curve means a new NHL rink will simply never be viable. If that’s the case I wish they would just come out and say that bluntly though. “We can’t make the math work on a new rink funded entirely by us because we’re a smaller market in the league and we think we’ve already tapped out how much money we can realistically earn per game and this isn’t going to get better”. At least then the question is framed around the issue very clearly - should we use public funds to keep a team in the city that might not otherwise be viable to stay at the league’s current cost structure. You’d still have a lot of detractors, but I think there would be a lot more support if there was the appearance of some intellectual honesty with what’s going on. Like I said, the above is all speculative, but to me it’s seems a lot more likely than some new building being a magic potion to getting the flames back in the top 10 in revenue.

Spot on ... and I think the "model" is coming down.

Teams that avoid having too many 8 year contracts will be able to adjust when the revenue stagnates or erodes and the cap actually comes down.

[transplant99]

Originally Posted by jayswin

It's the WHL, most of the arenas are small city dumps built in the 60'-80's. The Dome is getting old for the NHL, but let's not pretend it's not at the top of the heap as far as junior facilities goes.

Fun Fact.

22 teams in the WHL.

16 of them play in newer facilities than the Hitmen.

Portland, Lethbridge, Swift Current, Regina, Brandon and Prince Albert are the only teams that play in older facilities.

[Fire]

Originally Posted by getbak

Average for the last 40 years, but weak for the last 13, which is how long the NHL revenue-sharing system has been around.

Sure, but the Flames need to be able to be successful when the dollar is at this level, because being close to par with the US dollar will not be the norm.

[monkeyman]

Originally Posted by Bingo

Well first off all you are fully able to decide what's telling for yourself.

For me the Flames have gone from a top 6 revenue team that pays every year to a team that is paid by their peers to be a bottom half team.

Hard to question books when their peers are cutting cheques, and dropping into the bottom 15 given their attendance and the market they play in suggests there could be a problem.

Is the problem the building? Clearly the exchange rate is a bunch of it, but an old building with the exchange rate seems to have moved them from elite market to "average" or just below.

That's telling to me.

Why do they have to be in the top 1/3 of the league in revenue every year? During one of Calgary's worst economic downturns of our lifetime when the Canadian dollar is at a low, I'm not surprised they've slipped out of the top 1/3. Isn't the the whole point of revenue sharing, to balance out the ebbs and flows of markets? It also doesn't mean they're not profitable.
If things are so bad, why won't they open their books to the city?

[Bingo]

Originally Posted by monkeyman

Why do they have to be in the top 1/3 of the league in revenue every year? During one of Calgary's worst economic downturns of our lifetime when the Canadian dollar is at a low, I'm not surprised they've slipped out of the top 1/3. Isn't the the whole point of revenue sharing, to balance out the ebbs and flows of markets? It also doesn't mean they're not profitable.
If things are so bad, why won't they open their books to the city?

I think you're in a completely different argument.

I'm saying there is clearly a change in the economics or they wouldn't move from a revenue giver to a taker with their peers using the same model.

That's kind of obvious.

From there you can draw any conclusions you want. They say a new building would help generate more revenue, and you don't agree?

[CliffFletcher]

Originally Posted by curves2000

I do wonder how much of the revenue change for the Flames games, in general, is also due to the corporate nature of the fan base? I do think that a lot of companies and corporate boxes are spending less on games on the entertainment side. The tickets and the attendance for the games might be similar or slightly down but the expensive wine, the $75 popcorn bowls, the prime rib dinner etc are for sure down. Talk to the staff who work the boxes and the bartenders who are in the Chrysler Club.

If a 1000 less people are NOT spending $100 a game, with pre-season that's almost $5 mil a year in revenue.

You can see this with where corporate tickets end up. These days it's not the VP of Operations and the Head of Sales heading down to the dome to shmooze and drop $100 each. The tickets are getting handed down to Diane in HR, who goes with her boyfriend and they buy a beer and hot dog each.

[IamNotKenKing]

Originally Posted by transplant99

Fun Fact.

22 teams in the WHL.

16 of them play in newer facilities than the Hitmen.

Portland, Lethbridge, Swift Current, Regina, Brandon and Prince Albert are the only teams that play in older facilities.

Thanks for this. The link I found did not list them all.

[IamNotKenKing]

Originally Posted by jayswin

It's the WHL, most of the arenas are small city dumps built in the 60'-80's. The Dome is getting old for the NHL, but let's not pretend it's not at the top of the heap as far as junior facilities goes.

So you have no clue other than a random assumption, based upon nothing.

[GGG]

Originally Posted by Bingo

Such a pattern on this site these days, I guess its born of the time of fake news and that anyone can find a source for anything.

But use facts unless they don't work with your view and if that's the case then suggest the facts aren't real.

Are you suggesting the Flames have an attendance issue? I get that a recession down may have more unsold seats than say in the last 5 years but the building is essentially "full" most nights.

They had a continued sell out streak when the building wasn't sold out. White seats were clearly empty and unsold based on the pattern they were filled. Why should I take their numbers as credible if they were clearly extending a sellout streak with some underhanded numbers. I disagree this is a case of not using facts if they don't match my world view. Its a case of all facts should be evaluated on the smell test. And flames attendance numbers don't pass the smell test.

But you are right that they have not had a problem selling tickets that would impact the difference between being a revenue sharing team and not a revenue sharing team.