[News] Calgary, Alberta, & CSEC agree in principle to $1.223bn Event Centre + infrastructure

[Leeman4Gilmour]

I'm a big fan the decision to build this facility and don't agree with lot of the negative sentiment regarding the use of taxpayer dollars to fund it. That's not the point of this post though.

Franchise valuations lately got me thinking though. A clause the city should consider putting in their final agreements is around franchise valuation increase due to the new facility. My thinking;

If the franchise increases in value, like other franchises have, due to a brand new city owned arena, if the ownership decides to sell the franchise, the city should be eligible for a portion of that increased valuation. I feel that's fair. If Edwards and Co. decide to sell after the new rink is built, they could end up getting another $200M or more because of the new facility. A portion of that, in my mind, should be distributed to the city.

Random thought.

[Monahammer]

Originally Posted by Leeman4Gilmour

I'm a big fan the decision to build this facility and don't agree with lot of the negative sentiment regarding the use of taxpayer dollars to fund it. That's not the point of this post though.

Franchise valuations lately got me thinking though. A clause the city should consider putting in their final agreements is around franchise valuation increase due to the new facility. My thinking;

If the franchise increases in value, like other franchises have, due to a brand new city owned arena, if the ownership decides to sell the franchise, the city should be eligible for a portion of that increased valuation. I feel that's fair. If Edwards and Co. decide to sell after the new rink is built, they could end up getting another $200M or more because of the new facility. A portion of that, in my mind, should be distributed to the city.

Random thought.

I was thinking about very similar things in the context of the TB sale.

Since 2006 our franchise value has gone up almost $700+ Million. The current ownership group bought in 1994, so no doubt their actual increase in wealth is greater than that cumulatively. And we are asking for less than half of that increase in wealth to fund the new arena. A new Arena has typically added 3-400 million to a franchise value. Edmonton saw their value DOUBLE due to new arena (according to forbes): https://www.forbes.com/sites/mikeoza...h=4256a4b170dd
vs
https://www.forbes.com/sites/mikeoza...h=9461590360cb

IMO not only should we be looking to wrap in future clauses about increased value on franchise sale, but also we need to be critically looking at how much value the franchise has gained over the period of ownership. The ownership group potentially stands to have gained over a billion in total value once the arena deal is finalized. In fact likely 1.3 billion-ish.

Yet some will still make the argument that this is not a profitable venture without government support. Get bent.

[Bubba17]

Originally Posted by Monahammer

I was thinking about very similar things in the context of the TB sale.

...total value once the arena deal is finalized. In fact likely 1.3 billion-ish.

Yet some will still make the argument that this is not a profitable venture without government support. Get bent.

Here is something people keep forgetting to factor into the usual discussion about money from the valuation, the owner needs to factor in Capital gains, so it isn't quite as profitable as it seems.

https://thehockeynews.com/nhl/ottawa...s-sale-process

[timun]

Woe is the billionaire's plight, having to *gasp* pay taxes on hundreds of millions in capital gains.

[Monahammer]

Originally Posted by Bubba17

Here is something people keep forgetting to factor into the usual discussion about money from the valuation, the owner needs to factor in Capital gains, so it isn't quite as profitable as it seems.

https://thehockeynews.com/nhl/ottawa...s-sale-process

Only applicable if they sell. If they are borrowing off the value of the shares increasing, then they are gaining access to huge capital without it being taxed.

[calf]

Paying taxes is a by-product of making money, not a cost of doing business

[Aarongavey]

Originally Posted by Bubba17

Here is something people keep forgetting to factor into the usual discussion about money from the valuation, the owner needs to factor in Capital gains, so it isn't quite as profitable as it seems.

https://thehockeynews.com/nhl/ottawa...s-sale-process

Since NHL teams lose so much money and are definitely not profitable you can just offset your capital losses from when you ran the team against your capital gains and remove the tax liability. Unless the owners are making a bunch of money each year anyways, in which case there would not be capital losses. One other way to avoid the taxes would be to pay for your own arena, that would likely generate enough of a loss to avoid paying taxes on your 700 million dollar profit.

[Enoch Root]

Originally Posted by Monahammer

Only applicable if they sell. If they are borrowing off the value of the shares increasing, then they are gaining access to huge capital without it being taxed.

lenders understand tax liability too

[FlamesAddiction]

Just wondering if there has been any news regarding the timeline of getting this thing going? I kind of expected it move quickly to a vote after the election.

[GullFoss]

I think all facilities should be paid for by the federal government and they can fund it by putting a 90% capital gains tax on the sports franchises.

The flames value has increased some $700m since Edwards bought it. A 90% tax on that amount to pay for a $1.2b arena seems fair to me.

It's absurd that the public build the stadiums, the players create the product...but some billionaire who adds zero value walks away with all the money.

[Mass_nerder]

I thought I read somewhere that they were going back to revisit the design after the new funding/budget was agreed upon, but I don't have the time to read back through and confirm that.
If that is the case, and they're working with a bigger budget, I would assume it will be a while before anything new is released.

[Mr.Coffee]

Originally Posted by Leeman4Gilmour

I'm a big fan the decision to build this facility and don't agree with lot of the negative sentiment regarding the use of taxpayer dollars to fund it. That's not the point of this post though.

Franchise valuations lately got me thinking though. A clause the city should consider putting in their final agreements is around franchise valuation increase due to the new facility. My thinking;

If the franchise increases in value, like other franchises have, due to a brand new city owned arena, if the ownership decides to sell the franchise, the city should be eligible for a portion of that increased valuation. I feel that's fair. If Edwards and Co. decide to sell after the new rink is built, they could end up getting another $200M or more because of the new facility. A portion of that, in my mind, should be distributed to the city.

Random thought.

Or better yet, a ROFR to buy the team.

[Paulie Walnuts]

Originally Posted by FlamesAddiction

Just wondering if there has been any news regarding the timeline of getting this thing going? I kind of expected it move quickly to a vote after the election.

The UCP hasn't even passed their portion of the project I think that needs to happen first before they get going.

Now that its happening and we are getting screwed out of the money, hopefully they make some design changes to this thing.

[Paulie Walnuts]

Originally Posted by Mass_nerder

I thought I read somewhere that they were going back to revisit the design after the new funding/budget was agreed upon, but I don't have the time to read back through and confirm that.
If that is the case, and they're working with a bigger budget, I would assume it will be a while before anything new is released.

Last time they had I think they had projected 530 million for the project this time it looks like its going to be almost a billion with cost overruns.

[getbak]

Originally Posted by FlamesAddiction

Just wondering if there has been any news regarding the timeline of getting this thing going? I kind of expected it move quickly to a vote after the election.

After the election it was said the cabinet will be meeting in August and issuing a budget update, which should finalize this funding.

Also, there was an RFP issued in mid-June for a project manager, which is supposed to start in 2 weeks, so we might hear something then.

[Mass_nerder]

Originally Posted by GullFoss

It's absurd that the public build the stadiums, the players create the product...but some billionaire who adds zero value walks away with all the money.

Not to derail the thread completely, but that's capitalism pretty much across the board. Those who generate the value see a disproportionately small amount of the profit compared to those who own the means of production, and who add little to no value.

[topfiverecords]

Originally Posted by FlamesAddiction

Just wondering if there has been any news regarding the timeline of getting this thing going? I kind of expected it move quickly to a vote after the election.

Design needs a rework.

[Badgers Nose]

Are we there yet?

Also, some of you guys must be lots of fun at parties.

[Freeway]

Agreements are being worked on by the City/province as we speak.


Deal can't be fully executed until provincial cabinet and treasury board formally approve it, which will happen late July/early August.


There's not a lot being ANNOUNCED right now, but a lot of work is being done behind the scenes.

[Scary Eloranta]

I doubt they’re doing a redesign but if they were, I’d give a kidney to see a sphere like the one in Vegas, plus - have the inside be an inverted bowl. Wouldn’t that be something.


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