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

[BoLevi]

Originally Posted by Mull

Sarcasm?

https://www.statista.com/statistics/...es-since-2006/

Seems like a golden goose to me given that while asset value isn’t cash flow- it’s still …. Assets.

There is not way they would let the players suck up all of the profit without there being either a significant capital gain or cash flow.

Why would they? They would simply shut down the league until the players came to their senses.

[Mull]

Originally Posted by BoLevi

There is not way they would let the players suck up all of the profit without there being either a significant capital gain or cash flow.

Why would they? They would simply shut down the league until the players came to their senses.

I don’t understand what your saying or why you quoted me in context of your comment and what I replied to?

Are you saying the nhl players don’t get access to team valuation profits? I agree but not sure the relevance.

[Strange Brew]

Originally Posted by Shazam

Only companies that are publicly traded have shares?

Oh man.

Well the quote was about a Board of Directors that have a fiduciary responsibility to their shareholders. Not really a construct that is relevant to most private companies.

[BoLevi]

Originally Posted by Mull

I don’t understand what your saying or why you quoted me in context of your comment and what I replied to?

Are you saying the nhl players don’t get access to team valuation profits? I agree but not sure the relevance.

i was agreeing with you.

[Shazam]

Originally Posted by Strange Brew

Well the quote was about a Board of Directors that have a fiduciary responsibility to their shareholders. Not really a construct that is relevant to most private companies.

Point being, private companies most definitely have a share structure, and they certainly still have a fiduciary duty to their shareholders. And private companies do have directors.

I think yet again, there's a few posters that don't understand what "breakeven" means.

Your company makes $1,000,000 revenue.
Your expenses are $1,000,000 in Murray Edwards' salary.
Your profit is therefore zero.

Your company is breaking even. But Murray Edwards is $1,000,000 richer.

[powderjunkie]

Originally Posted by Shazam

Only companies that are publicly traded have shares?

Oh man.

You think it would violate fiduciary responsibility to invest in a capital venture that is critical to the corporation's viability?

Oh man.

Fiduciary duty really means to NOT abuse your position for personal-gain. So John Bean can't insist that all tech in the building is supplied by his brother's AV company at an exorbitant cost. Or to insist that the Flames trade five 1sts for Jake Bean and sign him to a league max contract. FD has absolutely no bearing on strategic business decisions by the owners, which is only four guys in this case (though their partnership may have its own governance principles).

It's an insane leap to say that NOT trying to extort your local municipality would violate FD.

[powderjunkie]

Originally Posted by Joborule

I'm not referring to the one from Summer of 2019. I mean the one during covid where CSEC agreed to cost overruns and putting in more upfront costs since city had concerns they couldn't go through with the deal anymore.

Alternate phrasing could be: bought CMLC off the project so they could freely spend more on non-essentials that drive revenue (and less oversight to the 'public good' elements of the project...I can't recall if this was also when the community rink was scrapped?). Let's not pretend it was some benevolent gesture...once their costs started to approach a realistic 50% they balked.

[Strange Brew]

Originally Posted by Shazam

Point being, private companies most definitely have a share structure, and they certainly still have a fiduciary duty to their shareholders. And private companies do have directors.

I think yet again, there's a few posters that don't understand what "breakeven" means.

Your company makes $1,000,000 revenue.
Your expenses are $1,000,000 in Murray Edwards' salary.
Your profit is therefore zero.

Your company is breaking even. But Murray Edwards is $1,000,000 richer.

In almost all cases, these are closely held businesses. If there's a Board, it's made up of the owners or their designate. There is no one in place with a fiduciary responsibility to look out for the little guy, that's not how they work.

Of course there are shares if there is more than one owner but these things aren't run like public companies with the kind of oversight and governance the poster was referring to.

And honestly I don't think many sports teams are set up to pay their owners a big salary. Rather poor tax planning.

[GioforPM]

Originally Posted by Strange Brew

In almost all cases, these are closely held businesses. If there's a Board, it's made up of the owners or their designate. There is no one in place with a fiduciary responsibility to look out for the little guy, that's not how they work.

Of course there are shares if there is more than one owner but these things aren't run like public companies with the kind of oversight and governance the poster was referring to.

And honestly I don't think many sports teams are set up to pay their owners a big salary. Rather poor tax planning.

I suspect CSEC is governed via a USA anyway.

[The Familia]

The minute the community rink was scrapped for an attached parkade was the signal the Flames were only in this for themselves. I can’t think of any new arenas that have a parkade of that size physically attached to the building at the expense of other things like concourse size, practice rink, or the pedestrian realm. The physical land which the building will be built on is already on the smaller size meaning every square inch counts. These bone heads decide they need an attached parkade to take up valuable space. Is the new $100 million dollar platform parkade that is two blocks away too far for Murray Edwards to walk from?

[Mr.Coffee]

Originally Posted by The Familia

The minute the community rink was scrapped for an attached parkade was the signal the Flames were only in this for themselves. I can’t think of any new arenas that have a parkade of that size physically attached to the building at the expense of other things like concourse size, practice rink, or the pedestrian realm. The physical land which the building will be built on is already on the smaller size meaning every square inch counts. These bone heads decide they need an attached parkade to take up valuable space. Is the new $100 million dollar platform parkade that is two blocks away too far for Murray Edwards to walk from?

Sure, however I thought that when Centennial Arenas on Crowchild trail built the 3rd red arena in there it was funded by the Flames and that’s why it changed its name to Flames Community Arenas.

I think the Flames do quite a bit for the community actually even if it does benefit them (tax breaks, reputation/ marketing, etc.).

Losing the Flames would be a disaster for Calgary IMO.

[cam_wmh]

Originally Posted by Mr.Coffee

Sure, however I thought that when Centennial Arenas on Crowchild trail built the 3rd red arena in there it was funded by the Flames and that’s why it changed its name to Flames Community Arenas.

I think the Flames do quite a bit for the community actually even if it does benefit them (tax breaks, reputation/ marketing, etc.).

Losing the Flames would be a disaster for Calgary IMO.

It would also be a disaster for the NHL.

[GGG]

Originally Posted by GullFoss

The flames could move to a bigger market and build a new arena on private economics. Or just move to a market where such an arena already exists.

I don't believe public money was required in Vegas or in Seattle. Because they're big markets and the business case justifies itself. The business case does not justify itself in Calgary.

Realistically, if you're a small market and you want a team, you pay for it via higher ticket prices and arena subsidies. Like Winnipeg, like Nashville, like Edmonton.

And if youre a small market and don't want a team, you don't need to have one. There are 32 teams and I'm willing to bet Calgary isn't in the 32 top metro areas of Canada/US. The NHL doesn't need to have a franchise here. An owner doesn't need to operate here either.

The fact that Murray Edwards operates the team at breakeven here rather than sell it for $500m to someone who can profitably run it in Houston, is charity and community service in and of itself.

He doesn't owe you or the city anything at all. The fact that you expect him to spend more money out of his own pocket for your happiness is insane.

Reading some of these posts is like reading the fable about the golden goose.

In the absence of any arena subsidies I’m willing to bet Calgary is a top 32 hockey market. It has a strong head office presence relative to its size and higher incomes than many places that are larger. It’s also more of a hockey city then many of the larger metros. So in the absence of any subsidy by any jurisdiction Calgary would have a team.

I think the fact that Seattle and Vegas both required subsides is ridiculous and they shouldn’t have caved to build facilities. You are correct that Edwards owes us nothing. I’m not asking Edwards to pay more of his money.

I just find this argument that their isn’t enough money for it to be viable disingenuous. There is clearly enough money when 50% of 5 billion dollars is spent on salaries when the next closest league spends a few hundred million in salary. The money exists, the problem is cities refuse to work together to get it.

NHL players can take 50% payouts instead of you or I finding stadiums. The Challenge is getting to the point where cities say no. The racket the NFL,NHL,NBA, and MLB have put together to extort cities is impressive.

I would prefer we don’t play. I’m also willing to risk the flames to make that stand.

[Mull]

Originally Posted by Mr.Coffee

Sure, however I thought that when Centennial Arenas on Crowchild trail built the 3rd red arena in there it was funded by the Flames and that’s why it changed its name to Flames Community Arenas.

I think the Flames do quite a bit for the community actually even if it does benefit them (tax breaks, reputation/ marketing, etc.).

Losing the Flames would be a disaster for Calgary IMO.

I am pretty sure the Calgary flames community arenas expansion was funded with the flames foundation money, provincial grants and city tax dollars no? The flames foundation money donated money to them- not money the flames give from their heart.

While the flames have an unique ability to raise money for their foundation:

1. If flames ceased to exist by the laws of economics at least a portion of the money raised would still get raised by other charities - they averaged at 1.25M per year in donations to the community (although in 2019-2020 they state >4M but I don’t think they disperse equally each year given the negative news stories at the time)

2. It’s odd to bring in the flames community arenas as a counter to the flames nixing the new proposed community arenas to be built with 50% of the flames cost as part of the arena deal- when the portion of funds the flames donated to the community arenas you mentioned were funds donated to the flames - NOT flames donations

3. I don’t agree loosing the flames would be a disaster to this city. We are not so frail that a disaster is the right word in my mind. I am sure the flames think that however.


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[GullFoss]

Seattle:

2006 - CEO of Starbucks owns Seattle Sonics and says he wants to keep team in Seattle, but public money is needed. City of Seattle balks at cost ($200m). Owner sells team to outside group because City of Seattle won't contribute $200m for new arena

2007 - Steve Balmer of Microsoft offers to buy team and partially pay 50% of arena costs if City of Seattle will pay remainder. Seattle says says no to the $150m cost.

2008 - Seattle SuperSonics relocate to Oklahoma due to lack of public funding

2016 - After 8 years with no professional sports team, Seattle spends $1.1 billion of public money for arena (100% of cost) to entice an NHL and NBA franchise to the city.

Outcome:
Seattle pays full cost instead of having a public-private partnership because of "principles"
Seattle pays $1,100,000,000 instead of $150m because of "principles"
Seattle lost NBA team because of "principles"

Ideals vs Reality 101

[Mull]

Originally Posted by GullFoss

Seattle:

2006 - CEO of Starbucks owns Seattle Sonics and says he wants to keep team in Seattle, but public money is needed. City of Seattle balks at cost ($200m). Owner sells team to outside group because City of Seattle won't contribute $200m for new arena

2007 - Steve Balmer of Microsoft offers to buy team and partially pay 50% of arena costs if City of Seattle will pay remainder. Seattle says says no to the $150m cost.

2008 - Seattle SuperSonics relocate to Oklahoma due to lack of public funding

2016 - After 8 years with no professional sports team, Seattle spends $1.1 billion of public money for arena (100% of cost) to entice an NHL and NBA franchise to the city.

Outcome:
Seattle pays full cost instead of having a public-private partnership because of "principles"
Seattle pays $1,100,000,000 instead of $150m because of "principles"
Seattle lost NBA team because of "principles"

Ideals vs Reality 101

Isn’t the climate pledge arena $1.11Billion renovations 100% funded by OVG? A private investment group

Seems like smart by Seattle to wait.

Saved their taxpayers a huge amount of money and got an even better arena then the first proposal- but for free!

What am I missing?

[Demzy84]

Originally Posted by GullFoss

2016 - After 8 years with no professional sports team, Seattle spends $1.1 billion of public money for arena (100% of cost) to entice an NHL and NBA franchise to the city.

Outcome:
Seattle pays full cost instead of having a public-private partnership because of "principles"
Seattle pays $1,100,000,000 instead of $150m because of "principles"
Seattle lost NBA team because of "principles"

Ideals vs Reality 101

Climate Pledge Arena did indeed cost $1.1B to build but was privately financed through OVG, city of Seattle didn’t pay anything for it

Isn’t this essentially the kind of deal the Flames are looking at now?

[Mull]

Originally Posted by Demzy84

Climate Pledge Arena did indeed cost $1.1B to build but was privately financed through OVG, city of Seattle didn’t pay anything for it

So Gullfoss is making the point of what type of positive outcome can happen when cities say no to blackmail from sport team owners.

So don’t give the flames a dime of public money?

[White Out 403]

I don't have much else to add, other than, it's amazing watching blue collar people like ourselves argue over arena financing. The team is owned by people who are so wealthy that this is a hobby to them, the idea that we should, as taxpayers, be bled to pay out of pocket so they can have a fancy arena to further increase their windfalls is completely insane. The corporate brainwashing is impressive, albeit awful for society. Someone said it best in the thread already, the way that these rich owners extort cities for their fancy toys is actually criminal.

[Locke]

Originally Posted by White Out 403

I don't have much else to add, other than, it's amazing watching blue collar people like ourselves argue over arena financing. The team is owned by people who are so wealthy that this is a hobby to them, the idea that we should, as taxpayers, be bled to pay out of pocket so they can have a fancy arena to further increase their windfalls is completely insane. The corporate brainwashing is impressive, albeit awful for society. Someone said it best in the thread already, the way that these rich owners extort cities for their fancy toys is actually criminal.

Wow. Are you skimming or actually paying attention?

Reading this post I'm envisioning a giant 'WOOSHING' noise when finance is being discussed.