[News Roundup] CSEC/City arena deal UPDATED: Third Party Facilitator

[kermitology]

Originally Posted by Manhattanboy

So I spoke with a few of my contacts at the Stampede this morning and their take is that this has many layers, all to do with uncertainty and the viability of the business model going forward. The new restrictions imposed, 50% capacity, no food/beverage revenues, etc. are a very big deal. The team is not discounting the possibility that restrictions could be in place for a long time. And that season ticket holders may not renew post-pandemic.

The Stampede folks are quite shaken and when I flippantly said well the Flames would never leave the City, their reaction was don't be so sure.

Sad times.

There has to be a market for them to move to. Seattle is out, and what would be an easier move/sell Arizona or Calgary to Houston? Even Bettman's defence of CSEC doesn't make market sense. Calgary has a stronger ticket base than pretty much any other destination and the concept of moving the Flames with a strong gate revenue presence over the Coyotes is laughable. It's a paper tiger threat because it just doesn't make sense. All you'd have to do is find another Fenway Sports Group type of buyer and the market analysis would probably keep the team in place.

[nieuwy-89]

Originally Posted by mile

https://twitter.com/user/status/1473718708401053713

https://twitter.com/user/status/1473718710825271299

I like this guy. A neutral party with no "skin in the game", who just loves the City and the team, and has the business clout to back him up. Making a lot of sense with these tweets.

[DJones]

Originally Posted by nieuwy-89

I like this guy. A neutral party with no "skin in the game", who just loves the City and the team, and has the business clout to back him up. Making a lot of sense with these tweets.

Until he puts up at least a billion hes wasting everyones time

[greyshep]

Is the thread title accurate? Threaten to pull out, or Has pulled out?

[Cappy]

Originally Posted by dissentowner

Yet a Flames fan. You: Calgary but not a Flames fan, a pot stirrer on a public forum.

Here come the “not a true flames fan” comments. As if non-flames boosters who live in the city can’t care about how their tax dollars are spent…

[Senator Clay Davis]

Originally Posted by Lanny_McDonald

Without the Flames, Calgary will be recognized by outside observers for only the Stampede and being the gateway to the Canadian Rockies. ?

Literally this is how 99% of the outside world currently recognizes Calgary, and a new arena or having an NHL team doesn't change that. That you personally value a city on it's sports teams, arenas, or lack thereof, is on you. Calgary could have the greatest arena in human history and 99% of the outside world will still view Calgary as the city with the Stampede and the stop before Banff.

[powderjunkie]

Originally Posted by Freeway

She had one vote on council for both iterations of the arena deal AND one vote on the planning commission that approved the project.


Heck, she phoned into the planning commission meeting and kept things on the rails when several commission members railed against aspects of the project they didn't like that were already addressed in the conditions.


To suggest she didn't support the project simply isn't the case. She definitely disliked specific aspects of the project's deal, though.

Does anyone remember the main council meeting where they voted the main approval (July 2019)? The one where it went from public info to a vote in about 7 days and they rushed to vote before summer holiday...

Evan Woolley was raising some valid questions/concerns, and Gondek smacked him down for 'grandstanding' - to a wide round of applause here from arena supporters.

It's really unfortunate that last council pissed away their bargaining position and didn't take a little more time to clear up some of the unresolved questions.

[Locke]

Originally Posted by greyshep

Is the thread title accurate? Threaten to pull out, or Has pulled out?

It depends on how skilled their pullout game is.

[taffeyb]

Originally Posted by kermitology

There has to be a market for them to move to. Seattle is out, and what would be an easier move/sell Arizona or Calgary to Houston? Even Bettman's defence of CSEC doesn't make market sense. Calgary has a stronger ticket base than pretty much any other destination and the concept of moving the Flames with a strong gate revenue presence over the Coyotes is laughable. It's a paper tiger threat because it just doesn't make sense. All you'd have to do is find another Fenway Sports Group type of buyer and the market analysis would probably keep the team in place.

CSEC didn’t make any threats of moving. Their statement says they will continue to play out if the Dome. They know better than to play that card. Just us folks speculating. That being said, if they do comment on relocating, I’d be worried.

[Joborule]

Originally Posted by greyshep

Is the thread title accurate? Threaten to pull out, or Has pulled out?

Just to be clear, based off of CSEC language in their statement, the deal itself hasn't been terminated yet? The current deal is still in place, but there's differences in who should cover the additional costs that city is requesting?

[getbak]

Originally Posted by taffeyb

No. Definitely recent. I’ll have to search that out…

Edit. From 2017….Ken King (rip!)

He said the team used to be among the top 10 revenue-earning teams in the NHL who, under the league’s revenue-sharing agreement, contribute funds to the lower-earning teams.

“We have now crossed the line. We are now receivers. We’ll get a cheque this year. Isn’t that ridiculous, in this beautiful market?” he said.

“And I can say, sadly, that we have crossed one of the remedies off the list, and that is the new facility.

Why is that a bad thing? We're one of the five smallest markets in the league. Why should we be happy that we're paying some of the highest ticket prices in the league just so the Flames can cut a cheque to prop up teams in huge US markets that no one locally cares about?

[Macindoc]

Without a new arena, it is inevitable that the Flames will move. Already having the most dated arena in the league, the franchise is at a severe disadvantage with respect to the generation of new revenue streams that will be vital to NHL franchises in the future. As King said in 2017, the Flames are already among those teams receiving stabilization payments from the league rather than contributing to the fund. With ticket revenues uncertain going forward and no revenue from food and beverage sales, there is simply no business case for going forward with the current venue. The franchise would have a higher value in any other major North American city. The league will not stand in the way of the Flames relocating, because it can charge a relocation fee, because it already has a presence in Alberta, and because moving the franchise would not impact the league's efforts to expand its U.S. market (which is why the league continues to prop up the Coyotes in Arizona). When city council added new demands for the facility and asked to renegotiate the contract, it was the final straw that broke an already borderline business case.

This is not to say the city council should give in to any demands made by CSEC, just that we should be realistic about the consequences. Maybe some day there will be an individual or group in Calgary with deep pockets who are hockey fans and want to bring an expansion franchise here. But it might be a long wait. And it will be a disaster for the Stampede, which, with the exception of the Convention Centre, will be a ghost town and a prime crime location 50 weeks a year.

I also wonder what this will mean for the Roughnecks and Stampeders. Since they are also under CSEC, it may also spell their demise, and with that, possibly the demise of their respective leagues.

[GioforPM]

Originally Posted by Joborule

Just to be clear, based off of CSEC language in their statement, the deal itself hasn't been terminated yet? The current deal is still in place, but there's differences in who should cover the additional costs that city is requesting?

The press release says they aren’t proceeding with the project. People talk about terminating the deal, but it doesn’t seem like it’s a matter of saying “this contract has been breached, therefore we terminate”. They are just choosing not to proceed.

[Enoch Root]

Part of the problem here is that the business model doesn't make sense - in a city this size, the cost of a privately-funded event center is not justifiable, and requires public funding. And there are lots of good reasons to be against public funding, when the building is then owned privately.

How would people feel about the city paying for, and owning the building - entirely? The Flames would be a tenant, paying rent. And the city would be free to use the facilities in whatever way they see fit, including making money from concerts, other events, and the Stampede. And would have full control over city planning and integration issues.

[PepsiFree]

Originally Posted by Macindoc

Without a new arena, it is inevitable that the Flames will move. Already having the most dated arena in the league, the franchise is at a severe disadvantage with respect to the generation of new revenue streams that will be vital to NHL franchises in the future. As King said in 2017, the Flames are already among those teams receiving stabilization payments from the league rather than contributing to the fund. With ticket revenues uncertain going forward and no revenue from food and beverage sales, there is simply no business case for going forward with the current venue. The franchise would have a higher value in any other major North American city. The league will not stand in the way of the Flames relocating, because it can charge a relocation fee, because it already has a presence in Alberta, and because moving the franchise would not impact the league's efforts to expand its U.S. market (which is why the league continues to prop up the Coyotes in Arizona). When city council added new demands for the facility and asked to renegotiate the contract, it was the final straw that broke an already borderline business case.

This is not to say the city council should give in to any demands made by CSEC, just that we should be realistic about the consequences. Maybe some day there will be an individual or group in Calgary with deep pockets who are hockey fans and want to bring an expansion franchise here. But it might be a long wait. And it will be a disaster for the Stampede, which, with the exception of the Convention Centre, will be a ghost town and a prime crime location 50 weeks a year.

I also wonder what this will mean for the Roughnecks and Stampeders. Since they are also under CSEC, it may also spell their demise, and with that, possibly the demise of their respective leagues.

It might be a realistic consequence, but it’s far below that of other more likely consequences, such as the sale of the team to local buyers.

CSEC balks at $350m to build a new arena, but is going to pay $600m+ to move the team? Uh huh.

[Lanny_McDonald]

Originally Posted by Wormius

We have a beautiful city, why do you need tribalism?

Because it breaks down barriers associated with class, socioeconomic condition, race, sex, etc. When you're sitting in the arena or at a bar during a Flames game and you're all wearing the jersey, all of those differences melt away. When the puck goes in the net, you all share in the moment and find a common connection that brings people together. The aesthetic of city doesn't do the same as aesthetics are more personal and subjective.

Originally Posted by kermitology

There has to be a market for them to move to.

Calgary is a great city, but don't discount others. Houston (#4 for population). Portland (#25). San Diego (#8). Salt Lake City. Oklahoma City (#22). San Antonio (#7). Jacksonville (#12). Charlotte (#16). ​Indianapolis (#15). Kansas City (#36). Cleveland (#54). Austin (#11). Still some interesting markets out there from the league's perspective.

Originally Posted by Senator Clay Davis

Literally this is how 99% of the outside world currently recognizes Calgary, and a new arena or having an NHL team doesn't change that. That you personally value a city on it's sports teams, arenas, or lack thereof, is on you. Calgary could have the greatest arena in human history and 99% of the outside world will still view Calgary as the city with the Stampede and the stop before Banff.

Disagree. Every time I meet someone and they ask me where I am from, and I share Calgary, I get "so you're a Flames fan?" about half the time. The other half the time are questions about the Stampede, with a little bit of Banff thrown in. I always tell them that Calgary is more than any one thing, but it is what the city is known for. Just like with Oakland. They will forever be associated with the Raiders and Raider nation, even after moving to Las Vegas.

[Lonestar]

Asking this question out of curiosity because while growing up in Calgary I've never paid taxes there myself. What would be the tax impact on a single family household in an area like Citadel under the proposed deal?



I get the reluctance of common citizens to line the pockets of billionaires, but I also know there is community value to having the Flames in Calgary, we can argue about the quantitative data behind that value until we're blue in the face, but just the fact that this is a talking point on a Flames fan forum screams that the community value of the team exists. The point at which the cost exceeds the value is going to be different for everyone.

[Bunk]

Originally Posted by smiggy77

That is exactly it. I'm in development and the city is NOTORIOUS for this. Even if CSEC said no, they would have threatened to not approve the permits. This is the definition of scope creep, typical of the city.

To put into perspective, I have also developed in Airdrie, Cochrane, Okotoks, Edmonton, Leduc,Winnipeg, and Regina and Calgary is by far the worst.

Conjecture. City asked, CSEC agreed. City structured condition to their liking. Even if what you say is true and they really didn't want to do it, felt railroaded by Administration, they could have asked the approval authority, Calgary Planning Commission on Nov 18, to remove the condition. They didn't. Still after the fact, if they didn't want the condition, they could have appealed the condition to SDAB up to just over a week ago. They didn't do that either.

[DJones]

Originally Posted by PepsiFree

It might be a realistic consequence, but it’s far below that of other more likely consequences, such as the sale of the team to local buyers.

CSEC balks at $350m to build a new arena, but is going to pay $600m+ to move the team? Uh huh.

They'd sell the team, someone else would relocate it. I assume the relocation fee would be signifcantly less than the expansion fees.

[Toonage]

How much would the team increase in value if moved to a market with a newer building w/ suites, etc?