[News] New Arena - Plan B - Victoria Park

[JerryUnderscore]

I understand the owners not wanting to pay for the arena themselves. After all, if you had the choice between paying full price for a new car or relying on a government subsidy to bring down the price of the car, which would you choose? If the owners can get the government to subsidize the arena I fully expect they will try.

However, it's also in the city's best interest to figure out just how economically viable a new arena will be for the city itself. And it's not surprising that the owners will try to spin the arena as more economically viable than it will be.

The solution, to me, should be in a ticket tax. The city should put up $200M for the arena, but then charge a 5% ticket tax to all events that happen there.

The current average ticket price of Flames tickets is $186.45. A 5% ticket tax (which would average $9.32), would increase the average ticket price to $195.77; hardly noticeable.

However, with roughly 20,000 seats in a new arena, you could bring in roughly $186,400 per home game or $7,642,400 per season for the Flames (assuming no playoffs). Over a 30 year life span for that arena, the arena would bring in ~$230M in revenue, which would pay for their part of the arena.

The Flames alone would pay for the city's investment in the arena. This says nothing for the additional revenue from Hitmen games, concerts or other events.

Furthermore, by taxing ticket sales, the city recoups the money from those who actually use the arena rather than the entire city.

It seems like a win-win really.

[CorbeauNoir]

Originally Posted by polak

Is it shallow?

All we hear is how boring and uncultured Calgary is. How there is nothing to do.

This is a reputation that follows Calgary around the world. You might not think concerts and performances are worth anything but they contribute a lot to what little culture and arts we get here and are important in attracting young talent to the city. Not everyone Hikes or is a Skier.

Young talent will get attracted here if the economy promotes that attraction. The music scenes in the Maritimes are fantastic considering how small the cities are, that doesn't mean young people in those cities have many practical options if they want to stay put. Half of Newfoundland didn't migrate to Alberta because of the Saddledome's roof.

[KingMoo]

underground stadium for the win.

just hope there's no fire or, god forbid, a flood....

[GGG]

Originally Posted by JerryUnderscore

I understand the owners not wanting to pay for the arena themselves. After all, if you had the choice between paying full price for a new car or relying on a government subsidy to bring down the price of the car, which would you choose? If the owners can get the government to subsidize the arena I fully expect they will try.

However, it's also in the city's best interest to figure out just how economically viable a new arena will be for the city itself. And it's not surprising that the owners will try to spin the arena as more economically viable than it will be.

The solution, to me, should be in a ticket tax. The city should put up $200M for the arena, but then charge a 5% ticket tax to all events that happen there.

The current average ticket price of Flames tickets is $186.45. A 5% ticket tax (which would average $9.32), would increase the average ticket price to $195.77; hardly noticeable.

However, with roughly 20,000 seats in a new arena, you could bring in roughly $186,400 per home game or $7,642,400 per season for the Flames (assuming no playoffs). Over a 30 year life span for that arena, the arena would bring in ~$230M in revenue, which would pay for their part of the arena.

The Flames alone would pay for the city's investment in the arena. This says nothing for the additional revenue from Hitmen games, concerts or other events.

Furthermore, by taxing ticket sales, the city recoups the money from those who actually use the arena rather than the entire city.

It seems like a win-win really.

The issue there is that is effectively an owner contribution and not a city contribution. As the total money the owners will earn over the life of the arena will be reduced by 3%-5% depending the elasticity of the fee vs face value.

[polak]

Originally Posted by CorbeauNoir

Young talent will get attracted here if the economy promotes that attraction. The music scenes in the Maritimes are fantastic considering how small the cities are, that doesn't mean young people in those cities have many practical options if they want to stay put. Half of Newfoundland didn't migrate to Alberta because of the Saddledome's roof.

Calgary is competing with Vancouver, Toronto, Montreal and other hot economies in North America. "Sh*t to do" is probably #2 on the list for young talent looking for a home.

[Cecil Terwilliger]

Originally Posted by jayswin

lol, troutman calls the Calgary vs Edmonton concert discrepancy anecdotal again. Him and nenshi are the only two people in Calgary.

Originally Posted by East Coast Flame

Updated list I posted in the concerts thread. The following concerts are skipping Calgary and playing Edmonton in 2017:

February - Garth Brooks (9 shows)
March - The Lumineers
April - John Mayer
June - Future
July - Queen & Adam Lambert, Bruno Mars, Ed Sheeran
August - Lady Gaga, One Direction, Metallica, Guns N Roses
September - Coldplay, Lionel Richie & Mariah Carey
October - Roger Waters, Depeche Mode

The only concerts I can find that are playing The Dome and not Edmonton are the 3 Stampede concerts: Alabama, Johnny Reid and Usher/The Roots.

As I've said before though, it isn't like Calgary and Edmonton used to both get every concert.

It wasn't uncommon for some acts to skip Calgary and some to skip Edmonton. It is unfair to say we lost all of those to the arena issue, as some of them may have not played here regardless.

That being said, the new arena in Edmonton is clearly the difference in the recent bias toward our neighbors in the north.

The interesting part will be what happens when we get our new arena. The cities are big enough that most acts will play both, but the really big hitters will probably still only pick one.

How depressing would it be if we did get a new arena but still didn't get the concerts?

[CorbeauNoir]

Originally Posted by polak

Calgary is competing with Vancouver, Toronto, Montreal and other hot economies in North America. "Sh*t to do" is probably #2 on the list for young talent looking for a home.

Young talent can't afford to live in those places, the obscene real estate markets in those cities are extensively documented and it's scaring people off. "#### to do" is pretty limited no matter where you live if your paycheck can barely clear food and rent in a broom closet.

[CorbeauNoir]

Originally Posted by Cecil Terwilliger

As I've said before though, it isn't like Calgary and Edmonton used to both get every concert.

It wasn't uncommon for some acts to skip Calgary and some to skip Edmonton. It is unfair to say we lost all of those to the arena issue, as some of them may have not played here regardless.

That being said, the new arena in Edmonton is clearly the difference in the recent bias toward our neighbors in the north.

The interesting part will be what happens when we get our new arena. The cities are big enough that most acts will play both, but the really big hitters will probably still only pick one.

How depressing would it be if we did get a new arena but still didn't get the concerts?

The thing is that Edmonton is in a really bad location if you're an act planning out a route to go on tour. Logistically it's a massive detour to take your bus convoy out on no matter what direction you approach it from and it's not cheap to haul everything there and back without any logical venues to bridge the distance in between. When I was living out in Halifax it was a big talking point about how massive acts like U2 or Bruce Springsteen would opt to perform in Moncton instead because Nova Scotia is a massive geographical cul-de-sac that's a pain in the ass to get in and out of for most artists. It's essentially the same deal with Edmonton.

Calgary ought to make a lot more sense for big tours if you're performing dates to cross the PNW into the Midwest, the fact that it's routinely skipped over to take a big northward spike regardless of the logistical hurdle it creates to do so speaks to something significant being up.

[N-E-B]

90% of the acts that skip town are garbage anyways. Not a big loss, and it's not that hard or expensive to do a day trip to Edmonton if you want to see a concert there. This is a non-issue to me.

[Clarkey]

They should put a library, music studio, art gallery and renewable energy think tank in the bowels of the new arena plans and get the NDP to pay.

[cam_wmh]

Originally Posted by Maritime Q-Scout

Maybe it's that I haven't slept in 4 days, but I'm failing to see why the city can't contribute a percentage of the building cost and then recoup that as as percentage of revenues from the building until the original payment is repaid.

IE: Arena costs $800million, city pays $200million. That's 25%.

Have an independent auditor check the books and assess fair market value for rent to the Flames, Hitmen, Roughnecks combined with any private rentals (concerts, conventions, etc) then take either 25% of profits of the year or something like 10% of revenues and repay the city until the $200million is repaid. Economic spinoff would equate payment of interest not payment of interest and principle.

Billionaires get their new arena, city gets repaid, economy gets a boost, everyone wins.

I appreciate the creativity, in a sea of combative posts;
Is there a challenge in an NHL club opening its books to an independent auditor, sharing alot of privileged financials? I believe they surrendered their books to the City, under NDA, as part of their CalgaryNext proposal?

[Ozy_Flame]

Originally Posted by N-E-B

90% of the acts that skip town are garbage anyways. Not a big loss, and it's not that hard or expensive to do a day trip to Edmonton if you want to see a concert there. This is a non-issue to me.

This is where I shake my head. "X number of bands are garbage" is not a fruitful argument to even start with.

There is every indication that you'll have similar crowds in Calgary as you will in Edmonton. In fact, you'll have less crowds in Edmonton because then Calgarians aren't compelled to travel up there to catch these acts.

Pretty sure 9 Garth Brooks shows would have been 5-6 in Edmonton and the rest in Calgary (if not a bit more in Calgary's favor) if he didn't skip the Saddledome as a venue. Which he did. And Calgary lost for it.

[gottabekd]

Originally Posted by Table 5

If the strongest argument for putting public money into a hockey arena is to have more concerts, then perhaps we should just build a music-specific venue instead.

I haven't kept up with the fate of the Saddledome discussions, but last I remember the consensus was there wasn't much reason to keep it around after a brand-spanking new arena is built.

Here's my idea: take the roof and 200+300s down, leaving an outdoor half-bowl concert venue! Would be awesome for some midsize summer concerts, especially for Stampede. Coke stage is too small.

[Reaper]

Originally Posted by JerryUnderscore

However, with roughly 20,000 seats in a new arena...

That number is going to be closer to 17,000 than 20,000. The days of building 20,000 seat capacity is gone for the NHL. Now, it's all about creating scarcity.

[Reaper]

Originally Posted by N-E-B

90% of the acts that skip town are garbage anyways. Not a big loss, and it's not that hard or expensive to do a day trip to Edmonton if you want to see a concert there. This is a non-issue to me.

That three hour drive is difficult after the last encore at the concert. Especially in winter.

[trumpethead]

Originally Posted by JerryUnderscore

The current average ticket price of Flames tickets is $186.45. A 5% ticket tax (which would average $9.32), would increase the average ticket price to $195.77; hardly noticeable.

That number is incorrect (and comes from a ticket reseller in the secondary market). The average Flames ticket is barely half that amount.

[Maritime Q-Scout]

Originally Posted by cam_wmh

I appreciate the creativity, in a sea of combative posts;
Is there a challenge in an NHL club opening its books to an independent auditor, sharing alot of privileged financials? I believe they surrendered their books to the City, under NDA, as part of their CalgaryNext proposal?

Well I would assume the arena would be run independently, as I assume the Flames, Hitmen, Roughnecks are run independently despite the same owner.

It's not relevant if the Flames make a profit, and the Hit men make a profit and the Roughnecks break even. It wouldn't matter that they're owned by the same holding company.

You determine the arenas expenses and revenues and base on that, with an independent auditor applying a market value for rent.

Kind of like how Presidents Choice, Loblaws, and Shoppers are owned by the same person but run independently.

Arena charges rent to the teams (who cares what their balance sheet looks like), vendors, concert promoters, conventions, parking, etc. Costs out its expenses, and there are your numbers.

Basically imagine if the arena was owned by a company other than Calgary Sports Entertainment.

Even if it's run as one an independent auditor could construct books as if he arena was run 100% separately.

[GGG]

Originally Posted by Maritime Q-Scout

Well I would assume the arena would be run independently, as I assume the Flames, Hitmen, Roughnecks are run independently despite the same owner.

It's not relevant if the Flames make a profit, and the Hit men make a profit and the Roughnecks break even. It wouldn't matter that they're owned by the same holding company.

You determine the arenas expenses and revenues and base on that, with an independent auditor applying a market value for rent.

Kind of like how Presidents Choice, Loblaws, and Shoppers are owned by the same person but run independently.

Arena charges rent to the teams (who cares what their balance sheet looks like), vendors, concert promoters, conventions, parking, etc. Costs out its expenses, and there are your numbers.

Basically imagine if the arena was owned by a company other than Calgary Sports Entertainment.

Even if it's run as one an independent auditor could construct books as if he arena was run 100% separately.

The interesting question would be what is the market value of the rent to the flames. How much could you charge them before they moved out of Calgary. Because as the arena owner you have a monopoly you can charge as much the market will bare.

The flames have already put that at 450million plus op costs in today's dollars.

[Jay Random]

Originally Posted by GGG

Because as the arena owner you have a monopoly you can charge as much the market will bare.

On the other hand, as the sole major-league tenant you have a monopsony, and you can offer as little as the seller can stand.

All the team really has to do in a situation like that is pay more than the second-best tenant would be able to offer.

[dino7c]

Originally Posted by N-E-B

90% of the acts that skip town are garbage anyways. Not a big loss, and it's not that hard or expensive to do a day trip to Edmonton if you want to see a concert there. This is a non-issue to me.

Your solution of "go spend your money in another city" is exactly the point

Calgary economy is losing out

Your pesonal taste is irrelevant...these acts are many of the biggest draws on the planet