Arena Negotiation Discussion v2

[topfiverecords]

Originally Posted by 868904

I think the NHL realizes that Calgary is a much better hockey market and they can pull at Calgarians heart strings a lot more than they can in Ottawa.

Most people in Ottawa are transplants and their hockey loyalties are with other franchises. I've seen more people wearing Flames gear in Ottawa than Senators gear and it wasn't even during hockey season.

If they made a serious threat to move the Senators, most people in Ottawa would be "meh".

If the Flames were in last place, just came off trading away Giordano, Gaudreau, Monahan, Lindholm and Backlund and the team was essentially just Andersson & Tkachuk with a few prospects and picks acquired you wouldn't see much Flames gear around town either.

[Hockey Fan #751]

Originally Posted by the-rasta-masta

Love how Bettman mentions possibility of relocation in Calgary when everything came to a head years ago, but denies the possibility when it comes to the Ottawa situation:

https://www.tsn.ca/nhl/video/bettman...tion%7E1628450

All Bettman does is take queues from the ownership. He'll come into a market and say, "What do you want me to say." Clearly CSEC was comfortable with Bettman saying this and probably asked him to.

He generally doesn't (Arizona, Atlanta, Carolina, Florida, Ottawa, etc.) because the local ownership groups don't ask him to say that.

[Joborule]

Besides, Melnyk has already implied the relocation threat.

What I'm most interested in when CSEC and the city come to an agreement, is how real estate will be ironed out so CSEC can have a hand in the pot for mixed-use development.

[GioforPM]

Originally Posted by Hockey Fan #751

All Bettman does is take queues from the ownership. He'll come into a market and say, "What do you want me to say." Clearly CSEC was comfortable with Bettman saying this and probably asked him to.

He generally doesn't (Arizona, Atlanta, Carolina, Florida, Ottawa, etc.) because the local ownership groups don't ask him to say that.

I can't believe Textcritic thanked this.

[marsplasticeraser]

Originally Posted by Joborule

What I'm most interested in when CSEC and the city come to an agreement, is how real estate will be ironed out so CSEC can have a hand in the pot for mixed-use development.

Jeez! I hope they have nothing to do with it.

Saying the flames should be involved in the real estate aspect of new arena is as logical as saying they should be involved in the roadworks on the project.

The Flames have no expertise in real estate development. What they’ve shown so far is embarrassing to be the work of an adult, let alone a company valued at $500mm.

The flames struggle with doing a mediocre job of putting on a Good fan experience for a flames game. Let’s have them focus on getting that right before we add more complexity.

[jayswin]

Bettman generally implies the opposite of what's possible. If a team has a legitimate chance of leaving he paints a rosy picture to try to make fans stay loyal and help local ownership try to right the ship before relocation.

If there's almost zero chance of relocation and ownership is just playing hardball with their city than he'll suggest relocation is a real possibility to try to get locals to support subsidizing owners.

[jayswin]

Calgarians are collectively too smart for that play, though. It went over horribly here. I'm actually quite proud of our city for standing up to ownership looking to be gifted an arena in this economic climate (or any economic climate, really) .

[Tyler]

Originally Posted by jayswin

I'm actually quite proud of our city for standing up to ownership looking to be gifted an arena in this economic climate (or any economic climate, really) .

I wouldn't jump on that bandwagon until we see what the final deal is

[Joborule]

Originally Posted by marsplasticeraser

Jeez! I hope they have nothing to do with it.

Saying the flames should be involved in the real estate aspect of new arena is as logical as saying they should be involved in the roadworks on the project.

The Flames have no expertise in real estate development. What they’ve shown so far is embarrassing to be the work of an adult, let alone a company valued at $500mm.

The flames struggle with doing a mediocre job of putting on a Good fan experience for a flames game. Let’s have them focus on getting that right before we add more complexity.

As much as it would be best if CMLC would handle all of it, the main reason the Flames want a new arena along with more luxury suites, is land they can have surrounding development on so they can pull in even more money. I don't envision any deal not letting CSEC have at least a stake in that.

[bettercallbettman]

The way things are going now see we months away from a deal or still looking at 2 years

[Freeway]

I'd be shocked if we don't hear something before the summer.

[Fuzz]

Originally Posted by Joborule

As much as it would be best if CMLC would handle all of it, the main reason the Flames want a new arena along with more luxury suites, is land they can have surrounding development on so they can pull in even more money. I don't envision any deal not letting CSEC have at least a stake in that.

If CSEC wants a bunch of businesses around the arena, they are welcome to buy land or buildings and do it like any other business would. The arena deal should have no concessions for extraneous crap that they want, "just because".

[Flamenspiel]

Originally Posted by Joborule

As much as it would be best if CMLC would handle all of it, the main reason the Flames want a new arena along with more luxury suites, is land they can have surrounding development on so they can pull in even more money. I don't envision any deal not letting CSEC have at least a stake in that.

Everything has a price, if CSEC wants a bunch of extra land then they need to contribute more to the project. My understanding is from the Calgary Herald article is that no contribution has been approved, they go forward without being committed to a specific amount.

[Freeway]

Almost all of the surrounding land is owned by the City, so it's completely possible that CMLC would continue to manage the land development and CSEC would be given "points" of ownership. The development itself would be managed the same, but CSEC would get a portion of the action's value/profits.

[burn_this_city]

Any arena is going to be a tough sell with the tax shift proposal and general economic malaise.

https://calgaryherald.com/opinion/co...say-businesses

[Oil Stain]

I was just at the Saddledome for the first time this year.

It's fine.

Unless you are someone that regularly sits in club seats. If that is the case then you should be pushing for a new arena.

If you sit with the "normies" you'd be better off hoping they just keep playing in the Dome and save yourself an extra 30% on season tickets prices.

[Tyler]

Originally Posted by burn_this_city

Any arena is going to be a tough sell with the tax shift proposal and general economic malaise.

https://calgaryherald.com/opinion/co...say-businesses

Honestly, I think we are past the 'sell' point, and onto the 'how to pay for it/let's make a deal'.

[N-E-B]

Originally Posted by Oil Stain

I was just at the Saddledome for the first time this year.

It's fine.

Unless you are someone that regularly sits in club seats. If that is the case then you should be pushing for a new arena.

If you sit with the "normies" you'd be better off hoping they just keep playing in the Dome and save yourself an extra 30% on season tickets prices.

It’s absolutley fine for watching hockey. In fact, it has the best sightines of any NHL rink I’ve been to. I really enjoy watching games there.

What’s not fine is the amount of musical acts skipping Calgary forcing me to go to Edmonton and spend my money in that city if I want to go. Most of the artists that’s skip town suck, but there’s probably 1-2/year I go to (and maybe 1-2/year I would go to if it was in Calgary but wouldn’t drive three hours for). Personally the amount I spend going to Edmonton would cancel out with any food/beverage price increase. I rarely drink at games and concerts so the beer price isn’t really an issue for me.

[Buff]

Originally Posted by Oil Stain

I was just at the Saddledome for the first time this year.

It's fine.

Unless you are someone that regularly sits in club seats. If that is the case then you should be pushing for a new arena.

If you sit with the "normies" you'd be better off hoping they just keep playing in the Dome and save yourself an extra 30% on season tickets prices.

Where did you sit?

I make the trek to Calgary once per year to see the Flames. I have a hard time accepting nose bleed seats. View of the ice is okay but you don't see the main score board. You get old screens on the back of the press boxes. The lighting is dark and gloomy compared to the rest of the building too. It's two completely different experiences. That can be improved.

Also, we're you there for an game or concert? Did you leave your seats at intermissions or use the washroom during or after the event? Lineups are ridiculously slow and get in the way of general flow of traffic.

Many improvements can be made to enhance a users experience. In today's society everything needs to be made easier for people to use. Some people can only put up with so much of the little nuances and annoyances before they get tired of it and move along.

Some aspects of the Dome I'd be sad to lose and I'm not excited about the inevitable higher cost of attending events in the new arena, but something better does need to exist.

[Cowboy89]

Originally Posted by marsplasticeraser

Jeez! I hope they have nothing to do with it.

Saying the flames should be involved in the real estate aspect of new arena is as logical as saying they should be involved in the roadworks on the project.

The Flames have no expertise in real estate development. What they’ve shown so far is embarrassing to be the work of an adult, let alone a company valued at $500mm.

The flames struggle with doing a mediocre job of putting on a Good fan experience for a flames game. Let’s have them focus on getting that right before we add more complexity.

We are witnessing first hand a microcosm of the decline of growth in the professional sports business model. The professional sports business has basically reached the apex of how much revenue it can generate on its own in North America.

Ticket pricing
Tickets are optimally priced to maximize profit for an organization. You see this with dynamic pricing (the Flames do this now by not publishing their Face value for tickets, they adjust them according to demand.) So there is not much more room to grow on that front. Once the Flames have a new building there won't be any more incremental revenue opportunities for premium tickets / suites etc.

Television / Streaming Rights

With how cable cord cutting is accelerating across North America, the long term value of TV rights deals will no longer be subsidized by other channels and cable packaging. Sports rights and the valuation of TV / streaming rights will fluctuate with actual eyeballs watching. This can only mean the value will go down and require growth in other aspects of the business model to recoup this decline.

Arena naming rights

Teams already all take the maximum value available from any company willing to purchase them. No growth here

Expansion to other markets

North America is almost saturated. There is only and handful of markets left to expand to. Expect the NHL to show up in Houston and maybe Kansas City and/or Quebec City, but at that point there will still be problem franchises that would need an alternate city to threaten their local politicians with. Growth longer term will have to come from international expansion and that opens up a number of other practical issues, such as travel, rest time, different (more punitive if it's Europe) income and business tax structures.

Merchandising

How many new jersey styles can a team release before it starts to canibalize sales? It's already customary for everyone to wear a team branded jersey, hat and/or shirt to a game when that never was the case before. How much more money can be squeezed? Maybe following the NBA and adding corporate sponsors to the kit. After that basically not much more growth.


Other Sources

This is where the real estate angle comes in. Teams are arguing that their product allows a concentration of foot traffic near their venues over a certain number of nights that theoretically support businesses that pay local taxes. In all new arena negotiations there seems to be a real estate angle to play because quite frankly the sources for incremental growth in the business does not support the historic growth arc of the business.

Below is an article about the Atlanta Braves. It outlines how they basically hose local governments for new venues / real estate and play them against each other for consistently better deals at every level they play at: Rookie league, low A, advanced A, AA, AAA, Spring Training facilities and even at the big club level (New ballpark in an Atlanta Suburb after only being in Turner Field for 20 years). There's even a quote in the article that the organization isn't a baseball team, but a real estate corporation.

During a question-and-answer with shareholders in April, Malone shrugged off the Braves’ slow start. “Keep in mind,” he said, “the Braves now are a fairly major real estate business as opposed to just a baseball club.”

https://www.bloomberg.com/features/2...raves-stadium/