Arena negotiation discussion. UPD: Flames release their proposal

[edslunch]

Originally Posted by Bingo

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?

It comes down, to me, to understanding ownership’s motivation. The team isn’t losing real money that we know of, and has appreciated greatly over the years. Is that enough along with civic pride to keep them happy? Or do they see this as competing for their investment dollars and not cutting it? It feels more like the latter but without seeing the books or getting in their heads it’s impossible to know. It would a shame if the whole city loses a team because a few people who already have more money than they could possibly spend expect to make substantially more.

[Toonage]

The team can appreciate in value year over year but that doesn't mean they aren't losing money running the operation each year.

Appreciation would be tied to the league and its dealings.

Or am I wrong on this?

[Jiri Hrdina]

Originally Posted by edslunch

It would a shame if the whole city loses a team because a few people who already have more money than they could possibly spend expect to make substantially more.

If the basis if your argument is for the Flames' owners to suddenly behave much differently than they have to this point in the process or much differently than most other very wealthy people behave, then I think you are being unrealistic.

From the POV of the Flames owners, they want the same deal others have received in very similar situations (e.g. Edmonton). Thus the stalemate.

But I don't think how wealthy they are already has any real relevance to the conversation.

[GioforPM]

Originally Posted by Toonage

The team can appreciate in value year over year but that doesn't mean they aren't losing money running the operation each year.

Appreciation would be tied to the league and its dealings.

Or am I wrong on this?

Not at all. A house bought years ago has undoubtedly increased in theoretical value, but op costs might be in the red every year.

[Parallex]

Originally Posted by CliffFletcher

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.

Which is the Flames fault. The VP of Operations and the Head of Sales clearly can still go... that they don't want to go (and the ticket thus goes down to Diane in HR) reflects on the quality of the product.

You want to make more money? Win more games.

[Da_Chief]

Originally Posted by Jiri Hrdina

If the basis if your argument is for the Flames' owners to suddenly behave much differently than they have to this point in the process or much differently than most other very wealthy people behave, then I think you are being unrealistic.

From the POV of the Flames owners, they want the same deal others have received in very similar situations (e.g. Edmonton). Thus the stalemate.

But I don't think how wealthy they are already has any real relevance to the conversation.

Wait, I could be wrong on this but are you saying the Flames current wealth is not relevant to them wanting to build a private arena? So they can tuck away their millions of dollars and ask a recession hit tax paying citizens to foot the cost?

Haven't paid attention to this lately, are the Flames still hiding their books?

[Jiri Hrdina]

Originally Posted by Da_Chief

Wait, I could be wrong on this but are you saying the Flames current wealth is not relevant to them wanting to build a private arena? So they can tuck away their millions of dollars and ask a recession hit tax paying citizens to foot the cost?

Yes I am saying that the personal wealth of the individual owners is not going to be a productive or relevant part of the conversation.

I just don't think all of a sudden Murray Edwards is going to sprout a halo and gift the city a new arena (to use an exaggeration to make the point)

[Parallex]

Originally Posted by Da_Chief

Haven't paid attention to this lately, are the Flames still hiding their books?

IIRC the last thing we heard was that the city requested a look at the Flames audited financials and the Flames refused.

[CliffFletcher]

Originally Posted by Jiri Hrdina

Yes I am saying that the personal wealth of the individual owners is not going to be a productive or relevant part of the conversation.

I just don't think all of a sudden Murray Edwards is going to sprout a halo and gift the city a new arena (to use an exaggeration to make the point)

It's not relevant in terms of the likely outcome of the negotiations. However, I personally do find the enormous wealth of the owners does affect where my sympathies lie. They could have built a new arena five years ago, and still had more money than they could ever spend, or their children could ever spend, or their grandchildren could ever spend.

The fact the owners are people with extreme personality types, whose motivations I find incomprehensible, is not something I can just dismiss. It may be a given in the negotiations, but it still colours how I regard those negotiations.

[Jiri Hrdina]

Originally Posted by CliffFletcher

It's not relevant in terms of the likely outcome of the negotiations. However, I personally do find the enormous wealth of the owners does affect where my sympathies lie. They could have built a new arena five years ago, and still had more money than they could ever spend, or their children could ever spend, or their grandchildren could ever spend.

The fact the owners are people with extreme personality types, whose motivations I find incomprehensible, is not something I can just dismiss. It may be a given in the negotiations, but it still colours how I regard those negotiations.

Yup I get that.
But that's where the negotiations have to evolve. The arguments are on the extreme right now, and Bunk is precisely right, that a group needs to come together and explore other models that create a true win-win for both sides.

Right now the argument is basically "You pay for it all because Edmonton paid for it all" v. "You pay for it all because you're already rich"

Public perception is one thing, but we should expect our leaders and the leaders of the Flames to be able to rise above that discourse

And so far they've exhibited very little ability to do so.

[I_H8_Crawford]

Originally Posted by Jiri Hrdina

Yup I get that.
But that's where the negotiations have to evolve. The arguments are on the extreme right now, and Bunk is precisely right, that a group needs to come together and explore other models that create a true win-win for both sides.

Right now the argument is basically "You pay for it all because Edmonton paid for it all" v. "You pay for it all because you're already rich"

Public perception is one thing, but we should expect our leaders and the leaders of the Flames to be able to rise above that discourse

And so far they've exhibited very little ability to do so.

I actually think the City's response is much more grounded, they come across to me as

"you should pay for most of it because Seattle, Vancouver, Winnipeg, Montreal, Toronto, and Vegas paid for theirs privately"

If the Flames are picking the Oilers as their hill to die on, then they can die.

[Parallex]

Originally Posted by Jiri Hrdina

Right now the argument is basically "You pay for it all because Edmonton paid for it all" v. "You pay for it all because you're already rich"

I think that's a misrepresentation of Calgary's position. The city's position is basically that it should just be made whole on it's investment.

The City is perfectly willing to "pay for it all"... it just thinks that if it's going to spend a lot of money on what is clearly a privately run luxury item it should receive equivalent revenue streams (rent/tax/user fees etc. etc.) back on that expenditure. That hardly strikes me as an extreme position.

Originally Posted by I_H8_Crawford

If the Flames are picking the Oilers as their hill to die on, then they can die.

Ibid. I have zero interest whatsoever in doling out a bunch of money so that Murray Edwards can win (or draw) some metaphorical dick measuring contest with Darryl Katz.

[Fuzz]

Just curious how much playoff mean financially to the team? I'd assume each round brings more money than a season missing the playoffs. Can most of the financial trouble be due to the team sucking?

[GioforPM]

Originally Posted by I_H8_Crawford

I actually think the City's response is much more grounded, they come across to me as

"you should pay for most of it because Seattle, Vancouver, Winnipeg, Montreal, Toronto, and Vegas paid for theirs privately"

If the Flames are picking the Oilers as their hill to die on, then they can die.

Nope. The Province kicked in VLT money to help True North pay down its debt. The city and the feds also kicked in money.

http://www.cbc.ca/news/canada/manito...ntre-1.1026604

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

Manitoba also subsidizes the Jets' operations:
http://www.cbc.ca/news/canada/manito...ions-1.4423605


If you want to suggest that most arenas are privately built, that just isn't true. Recently, Brooklyn, Pittsburgh, NJ, Glendale, Minnie, Columbus, - in fact, the vast majority of NHL arenas were. See also Houston and Quebec, in the hopes of getting a team.

[Parallex]

Originally Posted by Fuzz

Can most of the financial trouble be due to the team sucking?

I would dispute the idea of financial trouble to begin with. YMMV but "we're not making as much money as we want" isn't financial trouble... "we're teetering on the edge of bankruptcy" is financial trouble.

The team sucking no doubt does have a suppressing effect on the financials thou. Worse product means less demand means lesser ticket prices then they could otherwise charge and less whales able to make in arena luxury purchases (beer and hotdogs instead of steak and wine). Not to mention less "free" gate/consessions from playoff games.

It's one of the more infuriating things about Ken Kings lil dog and pony show he puts on... he goes and puts out a sub-standard product and then when he doesn't like the financial results he goes and blames everyone/everything but himself and his bosses.

[united]

Originally Posted by Fuzz

Just curious how much playoff mean financially to the team? I'd assume each round brings more money than a season missing the playoffs. Can most of the financial trouble be due to the team sucking?

Playoffs are massive. During the regular season, teams are spending between $2 and $3 million USD per week on player salaries. During the playoffs, player salaries drop to nearly $0, while ticket demand and prices increase in addition to concessions seeing a much higher increase in sales volume.

Just making the playoffs and getting swept makes a material difference, while a run to the finals generates tens of millions of dollars.

[Robbob]

Originally Posted by Parallex

IIRC the last thing we heard was that the city requested a look at the Flames audited financials and the Flames refused.

I thought they said they would allow but the city would have to sign a non disclosure. I think this comes up every year in the STH events.

[Fuzz]

I guess sucky hockey would also hurt revenues during the regular season. Even if most games are "sold out" all those empty seats are lost concession revenues.

[FireFly]

The Playoffs garner approximately $1 million in revenue per home game for the team. (Although that figure is a decade old now from when I was working there.)

I can understand the Flames not wanting to open their books to the City. Are they turning a profit? Probably. However, as far as asset management goes, the building is old and as it gets older it costs more to run/maintain. It is nearing the end of it's life expectancy and in order for it to continue to be operable for an NHL team, the amount they would need to spend in just maintenance is staggering.

I think a lot of people don't want to realize that it's not JUST about profit and opportunities. It's about user experience. What do their books have to do with the fact that you can miss an entire period waiting to get a Pocket Dawg or go to the bathroom? Do the books tell you about all the revenue left on the table because the building doesn't support it?

If you want to open books, let's open the books on their projections for after a new building is built.

[CaptainCrunch]

Originally Posted by united

Playoffs are massive. During the regular season, teams are spending between $2 and $3 million per week on player salaries. During the playoffs, player salaries drop to nearly $0, while ticket demand and prices increase in addition to concessions seeing a much higher increase in sales volume.

Just making the playoffs and getting swept makes a material difference, while a run to the finals generates tens of millions of dollars.

Its going to be interesting to see the Forbes year this year.


Edmonton in 2017-2017 made the playoffs and went two rounds and they made $151 million and 21 million in Operating income. Calgary had two home games and made 129 million and 5.4 million in operating income.


Last year neither team made the playoffs, I heard that teams usually make something like 300k for a playoff game because they don't have payroll expenses for the players. so there's a possibility that the Flames operating income would be below 500k.


Just in terms of operating income the Flames were ranked something like 18th in the NHL.


Looking at the Oilers, which nobody wants to do, i think they went from about $4 million in operating income to 21 million in the new building.


I'd fully expect that if the Cap rises to the rumored $82 million dollars or an increase of $7 million dollars that the Flames probably won't be spending to the cap this year or again.