Huberdeau and Weegar Signing Discussion Thread

[Rick M.]

So, has Weegar signed yet?

[Sandman]

Originally Posted by Rick M.

So, has Weegar signed yet?

Go back to bed, the last month and a half was all a dream.

[Jay Random]

Originally Posted by kermitology

Hahahaha.. you think the obscenely wealthy use cash for anything? He’d borrow the money for a cut of the profit. At least that’s what he should do if it were any other business. You don’t build a building with your own money.

Hahahaha... you think banks lend money for nothing down and no collateral? You don't build a building without putting up a chunk of your own money.

[Jay Random]

Originally Posted by BoLevi

If the viability of the building comes from the Flames as a tenant then simply charge the Flames sufficient rent to cover the financing costs (along with the concerts etc).... And now we're back to square one.

And if you charge the Flames that much rent, they will lose money, because the hockey business is not that profitable in a city the size of Calgary.

If it were, the building would already have been built with private money.

[kermitology]

Originally Posted by Jay Random

Hahahaha... you think banks lend money for nothing down and no collateral? You don't build a building without putting up a chunk of your own money.

You should take a look at how T-Mobile arena was funded. Projects of this magnitude aren't funded by banks, mostly from private equity and the collateral is equity partnerships.

CSEC is just trying to get an interest free gift from the City of Calgary. I do not understand how such a conservative city as Calgary is okay being held over a barrel and having such a huge amount of money just handed to a private business.

[Jay Random]

Originally Posted by kermitology

You should take a look at how T-Mobile arena was funded. Projects of this magnitude aren't funded by banks, mostly from private equity and the collateral is equity partnerships.

That's nice. Private equity is not lining up to bulid a money-losing arena in a city the size of Calgary.

Again, if it were, it would have been done already.

[CliffFletcher]

Originally Posted by Jay Random

The question in that case is whether the benefits to the public are worth the cost in the given circumstances. City Council decided that they were, and made an agreement with CSEC on that basis. That agreement will have to be revisited now in light of drastically increased costs, and the answer to the question may not be the same. But the question still needs to be asked.

And that’s wholly on Edwards. He’s been playing chicken with the city for over a decade trying to extort a better deal. He’d be out of pocket far less money if he’d agreed to a deal six years ago.

The big dog gambled on timing and lost, and there’s no justification for taxpayers bearing the higher costs that his strategy has yielded.

[kermitology]

Originally Posted by Jay Random

That's nice. Private equity is not lining up to bulid a money-losing arena in a city the size of Calgary.

Again, if it were, it would have been done already.

I disagree. CSEC is trying to follow the Oilers way. Additionally, if you go back to CalgaryNext it's not really an arena proposal (same with Edmonton) it's a property development proposal. They want to be land barons.

[Jay Random]

Originally Posted by CliffFletcher

And that’s wholly on Edwards.

Edwards caused COVID-19? Good to know.

Originally Posted by kermitology

I disagree. CSEC is trying to follow the Oilers way. Additionally, if you go back to CalgaryNext it's not really an arena proposal (same with Edmonton) it's a property development proposal. They want to be land barons.

They're not going to be land barons. CalgaryNext was DOA. CSEC was not going to own or develop any land in Victoria Park under the agreement that was actually made. If they were trying to follow the Oilers way, they have already failed.

[CliffFletcher]

Originally Posted by Jay Random

Edwards caused COVID-19? Good to know.

He thought holding out for years for a better deal would work in his favour. It didn’t.

[Cleveland Steam Whistle]

Originally Posted by kermitology

You should take a look at how T-Mobile arena was funded. Projects of this magnitude aren't funded by banks, mostly from private equity and the collateral is equity partnerships.

CSEC is just trying to get an interest free gift from the City of Calgary. I do not understand how such a conservative city as Calgary is okay being held over a barrel and having such a huge amount of money just handed to a private business.

The answer to this question is easy. Doesn't mean that people should be in support of public funds going to an Event Centre project, but the answer on why it happens this way is super straight forward.

In the city of Calgary (or any other small Canadian market, or any city that is geographically isolated from other metro areas), if we want to have an event centre, of the caliber required for a pro sports franchise and the other events that come to town, if it were left to private equity, it simply wouldn't get done. Why? Because the return on investment is terrible. The Calgary Events centre is not a positive return investment for any private investor.

Murray Edwards, or any equity investor would be better off parking whatever capital they have to invest in a new arena in savings account. That would deliver a higher return on investment than what the Flames will deliver for him (or the other investors) on this capital project.

So, IF (and again, it's a debatable IF) we want to have NHL hockey in Calgary, and we want an events centre that will allow us to attract the other types of entertainment that we MIGHT want to have in our city, then we need to accept it likely needs to be a joint venture that includes a public desire to have such a facility. And for Public to be willing to invest, they have to believe there are intangible benefits for the city (like quality of life, ability to attract more jobs / business, indirect benefits for other businesses) that don't directly impact the private investors (like the Flames) who also invest in these types of projects.

I have no issue with anyone who's opinion is no public funds for something like this. I'm not sure I agree, but it's a very understandable and viable position. This issue is the thought that Edwards or any private business is looking for a hand out that's the issue. This a money losing endeavor for any private business, we shouldn't just expect someone to do that out of the goodness of their hearts. IF it's going to happen in a city like Calgary, the city needs to see benefit in having it happen too or else there will be no investment.

To your point, if that wasn't the case, in a city like Calgary, public funds to be allocated to a project like this simply wouldn't be entertained, if there was a way for it to make sense fully in the private sector, it would get done that way.

[SuperMatt18]

Originally Posted by kermitology

You should take a look at how T-Mobile arena was funded. Projects of this magnitude aren't funded by banks, mostly from private equity and the collateral is equity partnerships.

CSEC is just trying to get an interest free gift from the City of Calgary. I do not understand how such a conservative city as Calgary is okay being held over a barrel and having such a huge amount of money just handed to a private business.

Take a look at the event calendar for the T-Mobile Event Center and that will show you the big difference.

Big name concerts, marquee UFC PPVs, major boxing events, etc. That building has a much greater opportunity to be full every single night, with events that are generating a lot more revenue than what will be generated by the Flames/Hitmen/Wranglers.

It’s just not an apples to apples comparison.

[BoLevi]

Originally Posted by Jay Random

And if you charge the Flames that much rent, they will lose money, because the hockey business is not that profitable in a city the size of Calgary.

If it were, the building would already have been built with private money.

To run a sports team you need a facility and you need players.

If you are paying too much for one, such that you can't afford the other, then you are pretty dumb.

[Reggie Dunlop]

I'd like to see Weegar signed.

[BoLevi]

Originally Posted by Cleveland Steam Whistle

The answer to this question is easy. Doesn't mean that people should be in support of public funds going to an Event Centre project, but the answer on why it happens this way is super straight forward.

In the city of Calgary (or any other small Canadian market, or any city that is geographically isolated from other metro areas), if we want to have an event centre, of the caliber required for a pro sports franchise and the other events that come to town, if it were left to private equity, it simply wouldn't get done. Why? Because the return on investment is terrible. The Calgary Events centre is not a positive return investment for any private investor.

Murray Edwards, or any equity investor would be better off parking whatever capital they have to invest in a new arena in savings account. That would deliver a higher return on investment than what the Flames will deliver for him (or the other investors) on this capital project.

So, IF (and again, it's a debatable IF) we want to have NHL hockey in Calgary, and we want an events centre that will allow us to attract the other types of entertainment that we MIGHT want to have in our city, then we need to accept it likely needs to be a joint venture that includes a public desire to have such a facility. And for Public to be willing to invest, they have to believe there are intangible benefits for the city (like quality of life, ability to attract more jobs / business, indirect benefits for other businesses) that don't directly impact the private investors (like the Flames) who also invest in these types of projects.

I have no issue with anyone who's opinion is no public funds for something like this. I'm not sure I agree, but it's a very understandable and viable position. This issue is the thought that Edwards or any private business is looking for a hand out that's the issue. This a money losing endeavor for any private business, we shouldn't just expect someone to do that out of the goodness of their hearts. IF it's going to happen in a city like Calgary, the city needs to see benefit in having it happen too or else there will be no investment.

To your point, if that wasn't the case, in a city like Calgary, public funds to be allocated to a project like this simply wouldn't be entertained, if there was a way for it to make sense fully in the private sector, it would get done that way.

If your business model is flawed, that's on you, not the taxpayers.

Edwards knows, like Elites going back to the Roman times or before, that the unwashed masses demand their bread and circuses and he can use that to rent-seek on the backs of middle-class taxpayers.

It's disgusting and frankly I am proud of the citizens of Calgary for seeing through the charade. The citizens of Calgary should be telling Edwards and Bettman that we as taxpayers are not the dumb money at the table and they should pay for the building out of their own profits. Or failing that, take it to the NHLPA for a new deal that frees up cash flow for ALL the teams.

[Aarongavey]

Originally Posted by Jay Random

And if you charge the Flames that much rent, they will lose money, because the hockey business is not that profitable in a city the size of Calgary.

If it were, the building would already have been built with private money.

Just do it like the booming cosmopolitan city of Winnipeg did and have the Flames pay for 70% and the government pay for 30%.

[Southside]

Thought I stumbled into the arena discussion thread by mistake. Nope.

[Jay Random]

Originally Posted by BoLevi

If your business model is flawed, that's on you, not the taxpayers.

The Calgary Flames don't get to choose their business model. Either they run their business according to the NHL's rules, or they don't have a pro hockey team at all. You obviously prefer the latter.

Originally Posted by Aarongavey

Just do it like the booming cosmopolitan city of Winnipeg did and have the Flames pay for 70% and the government pay for 30%.

That would certainly be feasible, if you want a booming cosmopolitan arena of 15,000 seats that subsequently needs millions of dollars in renovations to bring it up to NHL standards.

However, if you insist on the Flames paying 100% because BoLevi thinks Murray Edwards has half a billion dollars stuffed in his mattress, it will never get built.

[BoLevi]

Originally Posted by Jay Random

The Calgary Flames don't get to choose their business model. Either they run their business according to the NHL's rules, or they don't have a pro hockey team at all. You obviously prefer the latter.

The owners are, collectively, responsible for how the NHL operates - including the Flames ownership. At any rate, the business model could refer to the league itself, which is obviously a flawed business model.

[Textcritic]

Can you guys please just take the arena and business talk to another thread?

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