Arena negotiation discussion. UPD: Flames release their proposal

[Wormius]

Originally Posted by CaptainCrunch

If the Flames continue to slide into loss territory and no new building is on the horizon, the BOG won't block a move. Add to that the flames ownership probably isn't all that interested in funding losses like other owners did in the past while waiting for cost certainty.

I very much doubt that Rogers has a say in franchises staying or going.

The reputation thing is nice for the owners, but if they're making a $5 million dollar operating income last year, and its sliding to that negative mark, would anyone blame them for moving? I probably wouldn't its business, and its that simple.

I would imagine a lot of people who they do business with are wondering what they're waiting for.

Is there anything in the above though that a new arena would remedy?

[Toonage]

Originally Posted by Wormius

Is there anything in the above though that a new arena would remedy?

Revenue.

[ah123]

Originally Posted by Wormius

Is there anything in the above though that a new arena would remedy?

Really, the Flames want to be able to develop the area around the arena to maximize their revenue. An arena on its own is not going to add a lot of revenue, which explains why they were pushing CalgaryNext, and didn’t like the idea of an arena around where the Saddledome is

[CaptainCrunch]

Originally Posted by Wormius

Is there anything in the above though that a new arena would remedy?

Edmonton went from a similar spot as Calgary to about $25 million in operating revenue when they went to the new building.

That insulates them against a low Canadian dollar and increased payroll cost.

If in theory the Cap does go from 75 to 80 million dollars, we will probably see the end of Calgary being a cap team.

[Parallex]

Originally Posted by GioforPM

I mean, I get it - you don't want a single dime of taxpayer money going to them. I imagine you hate the deal they have now. So why not just say you don't support any deal and leave it at that?

I do support a deal... I support a fair deal.

CSEC are not a charity, they're a business (based on their on ice performance, their admitted declining profits, and their inability to negotiate a PPP... not a very well run one, they should hire a new President and CEO because the one they got ain't doin' so hot). If they want someone to be an investment partner with them on a new facility then they should propose a real partnership.

So yeah... I oppose just giving the Flames taxpayer money in exchange for nothing at all. Offer me up a deal that see's taxpayers share in the reward.

[the-rasta-masta]

When Bettman makes comments that the Flames used to write cheques for revenue sharing and now receive them, it doesn't necessarily mean that they are losing money does it? The revenue sharing program really only serves to even out the playing field year in and year out. If I'm looking at it correctly, the Flames could still be making a profit each year and receiving revenue sharing from some teams that are really doing well. Say 20 team in the NHL make a profit and 10 don't, well there are still 5 teams that are receiving a cheque that are already profitable.

The team has made the playoffs twice in the past 8 years (soon to be 9 likely). Prior to that they made the playoffs 5 straight seasons including a renewal/boost of fan interest from the 2004 Cup run. Of course they were making more money in those years. Is it really the old building that is making the Flames a team receiving a cheque or is it the product on the ice?

I was down at the Flames game in Nashville this February and couldn't believe how much better the Predators Arena and Marketing staff were at getting the crowd going, and generating a buzz in the rink. I think the Flames really miss the mark in their marketing and in-game contests/etc...

I would love for the Flames and city to find some common ground and move towards a new arena. It just feels that the Flames have really not acted in the best interest of anybody but themselves and have turned this into a bit of PR nightmare for the team. I truly believe the Flames could focus on improving their own product and stadium entertainment to jumpstart some revenue within the current building, and then continue negotiations in good faith with the city to get something done.

The "I'm taking my ball and going home" attitude of the Flames right now is quite disappointing and juvenile.

[Beninho]

Originally Posted by the-rasta-masta

When Bettman makes comments that the Flames used to write cheques for revenue sharing and now receive them, it doesn't necessarily mean that they are losing money does it? The revenue sharing program really only serves to even out the playing field year If I'm looking at it correctly, the Flames could still be making a profit each year and receiving revenue sharing from some teams that are really doing well. Say 20 team in the NHL make a profit and 10 don't, well there are still 5 teams that are receiving a cheque that are already profitable.

The team has made the playoffs twice in the past 8 years (soon to be 9 likely). Prior to that they made the playoffs 5 straight seasons including a renewal/boost of fan interest from the 2004 Cup run. Of course they were making more money in those years. Is it really the old building that is making the Flames a team receiving a cheque or is it the product on the ice?

I was down at the Flames game in Nashville this February and couldn't believe how much better the Predators Arena and Marketing staff were at getting the crowd going, and generating a buzz in the rink. I think the Flames really miss the mark in their marketing and in-game contests/etc...

I would love for the Flames and city to find some common ground and move towards a new arena. It just feels that the Flames have really not acted in the best interest of anybody but themselves and have turned this into a bit of PR nightmare for themselves. I truly believe the Flames could focus on improving their own product and stadium entertainment to jumpstart some revenue within the current building, and then continue negotiations in good faith with the city to get something done.

The "I'm taking my ball and going home" attitude of the Flames right now is quite disappointing and juvenile.

Flames have done themselves zero favors with their product they have put on the ice at home. This whole year has been a big F U to the fans. Bettman has had zero problems bailing out the Panthers, Coyotes and Hurricanes for the past 10-15 years. But hey, let's claim that the Flames have no hope for a new arena going forward and will move. The possibility of the Flames moving when multiple teams in this league have been on life support from is beyond pathetic.

[CaptainCrunch]

Originally Posted by the-rasta-masta

When Bettman makes comments that the Flames used to write cheques for revenue sharing and now receive them, it doesn't necessarily mean that they are losing money does it? The revenue sharing program really only serves to even out the playing field year in and year out. If I'm looking at it correctly, the Flames could still be making a profit each year and receiving revenue sharing from some teams that are really doing well. Say 20 team in the NHL make a profit and 10 don't, well there are still 5 teams that are receiving a cheque that are already profitable.

The team has made the playoffs twice in the past 8 years (soon to be 9 likely). Prior to that they made the playoffs 5 straight seasons including a renewal/boost of fan interest from the 2004 Cup run. Of course they were making more money in those years. Is it really the old building that is making the Flames a team receiving a cheque or is it the product on the ice?

I was down at the Flames game in Nashville this February and couldn't believe how much better the Predators Arena and Marketing staff were at getting the crowd going, and generating a buzz in the rink. I think the Flames really miss the mark in their marketing and in-game contests/etc...

I would love for the Flames and city to find some common ground and move towards a new arena. It just feels that the Flames have really not acted in the best interest of anybody but themselves and have turned this into a bit of PR nightmare for the team. I truly believe the Flames could focus on improving their own product and stadium entertainment to jumpstart some revenue within the current building, and then continue negotiations in good faith with the city to get something done.

The "I'm taking my ball and going home" attitude of the Flames right now is quite disappointing and juvenile.

Last year according to Forbes they had a $5 million dollar operating income. That was after the team made the playoffs and had a couple of home playoff games, which generate something like $2 million dollars a night without player payroll attached.

I would expect that the owners are angry at the 0 dollars in playoff revenue this year because either they're going to be losing or basically breaking even this year.

I would have to go back into the archives, which is probably painful, but as the dollar has declined and the salary cap has increased the Flames situation hasn't improved




Revenue, which seems to be peaked



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

[CaramonLS]

Originally Posted by the-rasta-masta

When Bettman makes comments that the Flames used to write cheques for revenue sharing and now receive them, it doesn't necessarily mean that they are losing money does it? The revenue sharing program really only serves to even out the playing field year in and year out. If I'm looking at it correctly, the Flames could still be making a profit each year and receiving revenue sharing from some teams that are really doing well. Say 20 team in the NHL make a profit and 10 don't, well there are still 5 teams that are receiving a cheque that are already profitable.

You're completely correct with this statement. Bettman and King have been very specific in their talking points regarding the arena and not once have them mentioned the Flames are losing money. They're counting on fans only doing a surface level reading of their comments and infer the Flames are losing money.

If they were, you can bet that they would be saying that to garner public sympathy.

[corporatejay]

I'd also take anything the flames say about their EBIT and profitability with a grain of salt. We have no idea how they account for things or how they have set things up within their organization. Depending on how they allocate costs among their entities (hitmen, necks, stamps) it's possible the flames shoulder the majority of those costs because they make the most profit.

Furthermore, none of this takes into account the increased value of the franchise over the years either. Would you say an investment in Berkshire is terrible because it doesn't pay dividends even though the value of the share has risen dramatically?

[CaptainCrunch]

Oh great, so now are we saying that no matter what the Flames say about their value, revenue and profitability is that they're lying 1%'ers?

If that's the case then why have this debate, clearly they're hiding billions.

There's no premise or reason to have a debate about this if that's the road we're going down, where we're casting ownership as the sole villain, and no matter what as a dishonest one.

[Matty81]

I hate the way this is going and am nervous but I don't see the BoG green lighting a move. Calgary is the 4th biggest city in Canada now, pulling in $130 mil in operating revenue... someone out there is going to look at the business and take a stab at it if Edwards takes off - those are viable numbers maybe just not eventually as a max payroll team.

For me this is where Murray Edwards measure as a man gets taken though... people have suggested he left Canada because he didn't want to pay higher taxes and contribute more of his wealth to our society and now the Flames are in hard times, if he hightails it again his legacy in Canada will be nothing more than a selfish villain.

Harley Hotchkiss never would have abandoned ship here, time for Edwards to show that he's worthy of carrying Harley's torch. Stick it out, cut payroll if you have to. The Flames are a Calgary institution. Eventually Nenshi will be gone and/or you appoint neutral negotiators and something gets hashed out, this is never going to be a permanent impasse.

[corporatejay]

Originally Posted by CaptainCrunch

Oh great, so now are we saying that no matter what the Flames say about their value, revenue and profitability is that they're lying 1%'ers?

If that's the case then why have this debate, clearly they're hiding billions.

There's no premise or reason to have a debate about this if that's the road we're going down, where we're casting ownership as the sole villain, and no matter what as a dishonest one.

Sorry, that's not what I was suggesting. What I'm suggesting is that operating revenue shouldn't be the only thing looked at to consider how well the flames are/aren't doing and that unless they are willing to open their books and have an auditor review them, I'm not taking them as gospel.

I believe the flames make what they say they make, but it doesn't show the whole picture. WHat do they make from the hitmen by being able to leverage personnel? Stamps? Necks?

[Barnes]

Originally Posted by ah123

Really, the Flames want to be able to develop the area around the arena to maximize their revenue. An arena on its own is not going to add a lot of revenue, which explains why they were pushing CalgaryNext, and didn’t like the idea of an arena around where the Saddledome is

Where anywhere in the CalgaryNEXT presentation or collateral does it give any indication that they were looking to develop anything other then an arena/Fieldhouse?

The area around the Saddledome is being primed for development by CMLC and the Flames would be free to purchase that land or any other land currently for sale to develop whatever they want, unless you mean the Flames are pushing to be given land on which to develop.

[CaptainCrunch]

Fair enough, sorry if I snapped. It just seems to be that there is a segment that's really intent on villianizing the owners here.

To me, if I was an owner and heard half the stuff that I've heard in this city, not just on this board but elsewhere. I'd move the franchise, its not worth the heartache.

[CaramonLS]

Originally Posted by CaptainCrunch

Oh great, so now are we saying that no matter what the Flames say about their value, revenue and profitability is that they're lying 1%'ers?

If that's the case then why have this debate, clearly they're hiding billions.

There's no premise or reason to have a debate about this if that's the road we're going down, where we're casting ownership as the sole villain, and no matter what as a dishonest one.

On the flip side, it's also completely fair to call out the potential incentives that the ownership group would have by not being completely upfront with the general public about their finances. We're talking about hundreds of millions of public dollars at stake and many others who have come before the Flames that have lied and cheated their way to public stadium deals.

[Parallex]

Originally Posted by CaptainCrunch

Oh great, so now are we saying that no matter what the Flames say about their value, revenue and profitability is that they're lying 1%'ers?

Well... they're most assuredly 1%'ers, I find it hard to say they haven't been somewhat deceitful in at least their public comments, and they (reportedly) refused to share their financials with the city.

Let's just say that they're not above having their interpretations questioned.

[powderjunkie]

Originally Posted by CaptainCrunch

The reputation thing is nice for the owners, but if they're making a $5 million dollar operating income last year, and its sliding to that negative mark, would anyone blame them for moving? I probably wouldn't its business, and its that simple.

IMO, pro sports teams are rare, luxury investments - not much different than rare art, vintage vehicles, or really expensive wine. The main difference being that they typically pay very nice dividends while, the principal value continues to increase dramatically.

For the city, I don't care much about the dividends/operating income - I want a piece of ownership. I don't care if that's "not the way it works".

[Parallex]

Originally Posted by powderjunkie

For the city, I don't care much about the dividends/operating income - I want a piece of ownership. I don't care if that's "not the way it works".

Won't happen but I thought a nice way to solve the impasse would be for the city to get a slice of the team equal to a what a new arena does to the franchise valuation. So say the Flames go from being valued at 430M in the saddledome to 550M with a new arena the City would get 120M worth (21.8%) of ownership. 21.8% of profit pays down the purchase price and the City then can sell the team at the end of the lease and use the profits to help finance the next arena (or pay off the current one if the Flames don't do as well as projected). Solve the arena problem for 60-70 years instead of 30-35.

[cal_guy]

Originally Posted by CaptainCrunch

Edmonton went from a similar spot as Calgary to about $25 million in operating revenue when they went to the new building.

That insulates them against a low Canadian dollar and increased payroll cost.

If in theory the Cap does go from 75 to 80 million dollars, we will probably see the end of Calgary being a cap team.

It's not a guarantee that those revenues stay high. For example Yankees Stadium revenues in 2016 actually fell below their last season in old Yankees Stadium, and 2017 appears to be much worst. Will that revenue still be there when the Oilers trade McDavid and get are tanking for the 1st overall in 2023?

Originally Posted by powderjunkie

IMO, pro sports teams are rare, luxury investments - not much different than rare art, vintage vehicles, or really expensive wine. The main difference being that they typically pay very nice dividends while, the principal value continues to increase dramatically.

For the city, I don't care much about the dividends/operating income - I want a piece of ownership. I don't care if that's "not the way it works".

The thing is that owning a sports team shouldn't be like only a business, but rather like owning the most exclusive set of season tickets. That's how it works in most of the world, and the only reason that isn't true here is because North American government have been lenient on the franchise-model and as a reward they extort large amounts of money from our local governments.