Arena Negotiation Discussion v2

[Strange Brew]

Originally Posted by New Era

I'm betting Houston or Portland comes calling. There is a reason why two groups paid the huge expansion fees they did. There's money in the NHL.

Yeah the owners controlling those arenas may certainly call and see if Edwards wants to sell. Wouldn’t they be calling Arizona and Florida first?

In Houston, I don’t think Fertitta has the will or resources right now to pick up a team. But then again, he has the kinds of connections that have money stuffed in a lot of mattresses.

[Senator Clay Davis]

Originally Posted by Strange Brew

Yeah the owners controlling those arenas may certainly call and see if Edwards wants to sell. Wouldn’t they be calling Arizona and Florida first?

In Houston, I don’t think Fertitta has the will or resources right now to pick up a team. But then again, he has the kinds of connections that have money stuffed in a lot of mattresses.

I think this is another problem for selling the Flames with the purpose of moving them. There are cheaper, and likely easier to move teams already out there. Fertitta could probably get the Coyotes for much less than buying the Flames. It's not like you can even say buying the Flames means getting a better franchise

[powderjunkie]

Originally Posted by New Era

I'm betting Houston or Portland comes calling. There is a reason why two groups paid the huge expansion fees they did. There's money in the NHL.

Maybe they should be self-sufficient then?

Originally Posted by Jay Random

If they are thinking of relocating the team, I take it for granted that they are selling as well. That's how relocation in the NHL works. First you try to sell to owners who want to keep the team where it is, and if you don't find any, you look for owners who want to buy the team and move it.

So we have, in fact, been talking about whether Edwards & Co. want to stay in the pro sports business right from the beginning.

That's not how it tends to be talked about. There are a million steps that have to happen first.


The only way the team moves is:
1. 'Keep the team local' buyers (don't necessarily have to be local) are unable to meet Murray's price
2. Relocation owners will meet Murray's price AND pay a $150M+ relo fee (probably $200M).
3. Another ownership group would not accept a price lower than Murray's for their team (ARI, CAR, FLA, OTT, etc.).
4. League approval, etc.

If the golden goose for #2 actually exists, do we think Murray is willing to sell for less than one of the 'troubled' teams is? In other words, would Murray Edwards sell the Flames for less money than any other owner in the league?

Even this is oversimplified, but 2&3 are unlikely to exist at the same time.

[FlamesAddiction]

Originally Posted by Senator Clay Davis

I think this is another problem for selling the Flames with the purpose of moving them. There are cheaper, and likely easier to move teams already out there. Fertitta could probably get the Coyotes for much less than buying the Flames. It's not like you can even say buying the Flames means getting a better franchise

It's not always the franchises in the worst shape or least valuable that relocate. They're not usually in great shape, but even the Pens were on the verge of relocating in the 2000s (because of arena issues). Kansas City even offered free rent to the team in their brand new arena if they moved there. The NHL didn't have the appetite to move into the Kansas City market at the time, hence why they went to bat for them so hard to keep the team there. If it was a different city, who knows how it might have turned out.

[GioforPM]

Originally Posted by FlamesAddiction

It's not always the franchises in the worst shape or least valuable that relocate. They're not usually in great shape, but even the Pens were on the verge of relocating in the 2000s (because of arena issues). Kansas City even offered free rent to the team in their brand new arena if they moved there. The NHL didn't have the appetite to move into the Kansas City market at the time, hence why they went to bat for them so hard to keep the team there. If it was a different city, who knows how it might have turned out.

You are aware the Pens were bankrupt in 1998 and 1999 right? They were still struggling financially in 2004 when the lockout happened and the arena issue arose.

[FlamesAddiction]

Originally Posted by GioforPM

You are aware the Pens were bankrupt in 1998 and 1999 right? They were still struggling financially in 2004 when the lockout happened and the arena issue arose.

Yes, but it was the Penguins in 2007 that were on the verge of relocating. The team with Crosby, Malkin, and sellout crowds. It was a valuable franchise at the time that just had a crappy arena situation. They couldn't make enough money in it to pay for their players. Comparing the 1999 to the post-lockout salary cap Pens in 2007 would be like comparing the 2000 Flames that almost relocated, to the 2008 Flames.

[Manhattanboy]

Originally Posted by GioforPM

Well, compared to lots of other lawyers and businessmen I’ve dealt with. City officials make deals all the time, but rarely of the magnitude of this one (or, for example, acquiring the Athabaskan Oil Sands projects, or buying BP Amoco assets, or a bailout of the RCR ski and gold reports. This arena deal is a lot smaller than CNRL’s major deals.

I know the lawyers on for CMLC. The City is getting excellent advice. Murray and Co. are not taking advantage of anyone.

[GioforPM]

Originally Posted by FlamesAddiction

Yes, but it was the Penguins in 2007 that were on the verge of relocating. The team with Crosby, Malkin, and sellout crowds. It was a valuable franchise at the time that just had a crappy arena situation. They couldn't make enough money in it to pay for their players. Comparing the 1999 to the post-lockout salary cap Pens in 2007 would be like comparing the 2000 Flames that almost relocated, to the 2008 Flames.

According to Mario they were never serious anyway:

https://www.pensburgh.com/2012/2/14/...-than-hed-like

Though the reporter says he’s lying.

[Weitz]

Who’s buying the flames to keep them here if they can’t get an arena deal that edwards and co would be happy with?

[Jay Random]

Originally Posted by Weitz

Who’s buying the flames to keep them here if they can’t get an arena deal that edwards and co would be happy with?

Apparently we have all kinds of local billionaires who have $500 million burning a hole in their pockets to buy a so-called asset that makes no profit now, and will inevitably lose money if the salary cap ever starts rising again, because the existing revenue streams are all maxed out.

[GGG]

It always bothers me that if the cap was 50 million instead of 80 million with HRR being something like 50%/30%/20% each team could get a “free” building every 30 or so years. The owners just pay the players too much because they know municipalities will bail them out.

Unfortunately the owners and players would never agree to a deal that gives away 20%.

[Cappy]

Originally Posted by GioforPM

Well, compared to lots of other lawyers and businessmen I’ve dealt with. City officials make deals all the time, but rarely of the magnitude of this one (or, for example, acquiring the Athabaskan Oil Sands projects, or buying BP Amoco assets, or a bailout of the RCR ski and gold reports. This arena deal is a lot smaller than CNRL’s major deals.

Fair enough. I will agree there are better negotiators than others. I have read that Edwards' negotiation tactics are... grating; similar to Nenshi which might explain some of those early failed negotiations. Getting two bulldogs in the room does not make for a great negotiation. I used to work closely with a prominent lawyer in Toronto who is well known for his tactics (brings a bazooka to a knife fight as is said of him) and it sometimes worked and sometimes didnt.

I don't think the magnitude of the deal matters, in all honesty. I've been involved in a billion dollar settlement negotiation and some for a couple grand. The size truly didn't matter on the negotiation tactic as much as the complexity and the different options available.

I would also disagree City negotiators don't do multi-million dollar deals on the regular.

[FlamesAddiction]

Originally Posted by Jay Random

Apparently we have all kinds of local billionaires who have $500 million burning a hole in their pockets to buy a so-called asset that makes no profit now, and will inevitably lose money if the salary cap ever starts rising again, because the existing revenue streams are all maxed out.

With a new arena, it probably would turn a profit. Right now, the Flames break even (aside from the COVID thing). I don't know how long they can keep that going though if the salary cap rises more. They could just raise ticket prices in the Dome to make up for it, but it's easier to convince people to pay more when the amenities are nicer.

[Cappy]

Originally Posted by Jay Random

Apparently we have all kinds of local billionaires who have $500 million burning a hole in their pockets to buy a so-called asset that makes no profit now, and will inevitably lose money if the salary cap ever starts rising again, because the existing revenue streams are all maxed out.

Off of the top of my head, there are two Calgarians who currently own or recently owned part of an existing franchise.

There is a lineup of prospective buyers for NA sports teams and profit has nothing to do with it.

Hell, if you guys want to do it, lets start a SPAC and buy the flames.

[Jay Random]

Originally Posted by FlamesAddiction

With a new arena, it probably would turn a profit.

True, but the contention seems to be that local buyers would want to buy the Flames and keep them in the Saddledome indefinitely. I find that a bit of a stretch.

[calgarywinning]

Originally Posted by Weitz

Who’s buying the flames to keep them here if they can’t get an arena deal that edwards and co would be happy with?

CP Go Fund me,

So finally all the stuff said here means a damn lick. What a glorious day.

[Senator Clay Davis]

Originally Posted by Jay Random

True, but the contention seems to be that local buyers would want to buy the Flames and keep them in the Saddledome indefinitely. I find that a bit of a stretch.

I mean there is (or was) literally a deal in place to have a new arena built. I'm sure there are prospective owners who would accept the deal already agreed upon. But this notion that a city should cave to any and all demands, even as the evidence shows public money for private arenas and stadiums is a loser financially, is where people draw the line. If sports teams can't make profit (despite the Christload of revenue sports generate) without the public subsidizing or bailing them out, perhaps we should spend more time wondering whether the model of sports is broken.

[GioforPM]

Originally Posted by Manhattanboy

I know the lawyers on for CMLC. The City is getting excellent advice. Murray and Co. are not taking advantage of anyone.

I don’t think anyone said “taking advantage”. Just good negotiator. But even the best negotiator is tied to circumstances of leverage and motivations of each side.

FWIW the lawyers for RCR when he white knighted them were excellent. I imagine the lawyers for Royal Dutch Shell, Anadarko, Penn West, et al were pretty darn good too.

Frankly, legal advice has little to do with these kinds of negotiations. And I don’t even know if Edwards is involved on a direct basis.

[Mull]

Originally Posted by sfpipes

Sorry Mull, nothing against you personally or this statement in and of itself. Merely quoting because to me what a lot of it really comes down to is what side of the fence each of us started on and how entrenched we are on that side.


For a CMLC/City sided individual, this quote is bang on. For someone siding with the Flames, you just need to change it a bit. "Siding with CMLC over Edwards without more details simply shows how blinded and irrational people can act towards a billionaire hockey owner."



For me personally, I'm kind of in the middle. I want the Flames to have a new arena. I'm not paying taxes in Calgary so I don't need to worry about how my tax dollars are spent. That said, as a person who grew up there and still consider it my "hometown", I also don't want the City to get bent over as badly as Edmonton did. So for me to "pick a camp", I really need more details, from all parties involved.



But like religion, politics and Covid, if a person is firmly set in their ways, not much is going to change that person's opinion.

You didn't address my point, only stated people can be blinded, but failed to explain why there was anything wrong with my key point as I did with the other poster. If I am blind, address my point and provide evidence.

I think that's why the other poster said you had a long post about nothing, but I can't read their mind.

[puckbrain]

i read that the city is backing out of the arena deal....


does this mean the flames will leave calgary?