You answered your first question with your last sentence...the Calgary Stampede is legitimately a not-for-profit organization. I'm not sure about their charity preceding the Flames arrival, but I'm also not sure about how much charity the Flames did in their first few years either.
I hate the Stampede for a lot of reasons, but they are generally good corporate citizens, and do a lot on the arts and culture side for the city (look no further than the upcoming youth campus.
I have no doubt the Flames Foundation is a non-profit, but I'm skeptical about the Flames org as a whole (and haven't been able to find anything to support your assertion)...can you provide any evidence to support your claim? If they are a non-profit (I assume you actually mean not-for-profit), shouldn't they have stockpiled even more money to reinvest into their most predictable business need?
Yeah, not for profit is more accurate. The owners have not been in it to make money. If they were, this team would have been relocated a long time ago. Options have been there but they recognize the value of the team to the community, and how bad they would be held in the court of public opinion if they did sell or move the team.
Quote:
While you're at it, how about some evidence of actual conflict between Stampede and Flames (bonus if you can show that the Stampede was any more aggravating)?
Feel free to back through the Herald archives during the dark times of the Flames and the whole Save Our Flames campaign. The Stampede Board had a strangle hold on all revenues to do with the Saddledome and that caused much tension between the Flames and the Board. The Flames needed more money and part of that deal meant they would assume management of the dome and receive the lions share of revenues from the facility, much to the chagrin of the Stampede Board. This was pretty well known back in the day. Heady times for people to think about.
I love that there are hopes to bring a MLS team to use this new field house.
Field House use:
For Profit CFL team? Check
Fort Profit MLS team? Check
Amateurs? If room permits. But the city is in desperate need of this facility for the people of Calgary so we should built it with the CalgaryNEXT proposal.
So... 10 dates for football, and maybe 35-40 dates for MLS (on the assumption they could get a team), leaving only 310-320 dates for amateur sports (plus the potential to still be able to utilize it on those above mentioned dates)?
Function normally means that some kind of tax or ticket tax was used to fund the facility, and then the use of the facility paid it back. Pretty straight-forward.
Use of the facility rarely pays it back considering the source of funding for all of these is some form of tax. As mentioned Denver was able to build a stadium through a sales tax...in SIX counties. That's just taxing people, that isn't even taxing a district that benefits from the traffic of the stadium, yet you'd probably claim that as a win for "functioning normally".
Quote:
As I have said several times, there is an arena and/or stadium in virtually every city. The vast majority are (at least partially) funded with public money. In many, if not most of those cases, there is some form of ongoing tax to cover the costs.
Then it is not being funded by use, it is being funded by the city and taxpayers. That isn't "functioning normally" that is corporate welfare through and through.
Quote:
Again, in most cases, they work fine. Some quick examples of cities where there was either a ticket tax, or a sales tax, or a hotel tax, or whatever, that did its job so to speak includes: Cleveland, Dallas, Houston, Miami, Tampa, Nashville, St Paul, Arlington, to name a few, and there are many others.
This discussion was about the viability of a ticket tax and the riskiness of its ability to to meet the payments of the debt service.
None of those places used a ticket tax exclusively (if they did at all). It's a crappy tax to use, especially on its own because its funding source is so relatively small. Cleveland was sin taxes (still is, they're financing $11M in construction debt with $5M in tax revenue). Dallas was tourism taxes, Miami?! Are you seriously bringing up Miami as a place where anything worked out?
Quote:
No one has made any argument that might suggest the ticket tax would be risky or on shaky ground. The Flames aren't just one tenant, they are (at least) three. The viability of the primary tenant (the Flames) is hard to dispute.
Funny, Bettman and the Flames have been very adamant that the viability of the primary tenant is very much in doubt.
Quote:
That was the point, and moving the goalposts to disputes about whether a team should be paying rent or not, or another deal was poorly constructed because teams didn't have to pay rent unless they were profitable or whatever, does not change that.
The common theme is that the cities were getting screwed because the funding model was bad. The CalgaryNEXT funding model is bad. Pretty straight-forward.
So... 10 dates for football, and maybe 35-40 dates for MLS (on the assumption they could get a team), leaving only 310-320 dates for amateur sports (plus the potential to still be able to utilize it on those above mentioned dates)?
The audacity
Subtract practices for Home and Away teams, grey cup preparations and concerts.
Yes, the audacity considering the Flames are billing this as a public need and then leeching on it.
Might as well talk about the Olympics instead of MLS. If I were picking between the two to come to Calgary by 2030, the Olympics would be far more likely given MLS' model going forward. The IOC is far more desperate for markets than MLS is.
Then we can at least get that sweet federal and provincial funding windfall and build whatever fancy #### we want.
Yeah, not for profit is more accurate. The owners have not been in it to make money. If they were, this team would have been relocated a long time ago. Options have been there but they recognize the value of the team to the community, and how bad they would be held in the court of public opinion if they did sell or move the team.
Or they'd look incredibly stupid for selling an asset that has done nothing but increase, increase and increase in value.
Quote:
Feel free to back through the Herald archives during the dark times of the Flames and the whole Save Our Flames campaign. The Stampede Board had a strangle hold on all revenues to do with the Saddledome and that caused much tension between the Flames and the Board. The Flames needed more money and part of that deal meant they would assume management of the dome and receive the lions share of revenues from the facility, much to the chagrin of the Stampede Board. This was pretty well known back in the day. Heady times for people to think about.
Did the big bad Stampede Board acquire operational control at gunpoint or something? Should they have given up that revenue stream out of the goodness of their hearts? Did the Flames not have an opportunity to contribute to the financing of the arena in exchange for management rights?
Spoiler!
The City of Calgary established the Saddledome Foundation in 1983 and leased the arena for 50-years to the non-profit organization. Its mandate was to "oversee the operation in a manner that protects taxpayers and benefits amateur sports at the local, provincial and national level".[35] The foundation is made up of a board of nine directors: three appointed by the city, three appointed by the province, and one each appointed by the Calgary Olympic Development Association (now WinSport Canada), Hockey Canada and the Calgary Exhibition and Stampede.[71] The foundation contracted the Stampede to manage the arena, and through its lease agreements with the Stampede and the Flames, earned 15% of gross concession sales, 50% of net income from luxury suites and executive seating and investment income on the arena's revenues.[35] The Flames signed a 20-year lease in 1983 that earned them 70% of advertising revenues and 90% of ticket revenues. The Stampede earned 85% of concession revenues and all revenue from parking.[35]
As part of the 1994 deal with the city, the Flames bought out the Stampede's contract for $20 million and took over management of the facility.[33] While the city and Saddledome Foundation paid for the 1994–95 renovations, the new agreement required the Flames to pay for future arena maintenance and repairs, as well as any further renovations.[35] The Flames agreed to manage the arena for 20 years and to contribute $14.5 million toward amateur sport in the city over that time.[33] The Saddledome Foundation retains the responsibility of distributing funds to amateur sport. From its inception through 2007, it had allocated over $20 million toward this cause.[72]
No Stampede board member has made a single penny directly from the Stampede's teet (even though they are all shareholders via a grandiose symbolic $5 investment). There are lots of good reasons to be on the Stampede Board, including advancing personal business interests and access to the city's elite networks, but they are not benefitting from any equity growth, unlike the Flames ownership. People in this city talk about the 'Stampede Board' with absolutely zero understanding of how it actually works.
There are lots of bad things to say about the Stampede (as a former employee I have a laundry list longer than most), but I have a lot less problem serving public funds up to them, because they are guaranteed to find their way back into the community in one way or another (whether it's in the best possible way can certainly be debatable at times), but it will never end up lining the pockets of wealthiest citizens...they can earn those returns on their own, just like every other business.
If all of this talk about the Flames owners not really being in it to make money, then they should have no problem giving up even more than 25% of a future sale...let's make it 50. Then we'd actually be talking about a partnership.
The Following 2 Users Say Thank You to powderjunkie For This Useful Post:
or better yet, we can expect that when an owner sells their future share of their interest in the Flames organization, the hundreds of millions they've collected will be donated right back into the local community, right?
Also don't confuse what I'm saying with they don't deserve to make money. They took the risk. Just let's call a spade a spade. This is an investment for these people, not a charitable cause.
Look up the Flames Foundation. Lots of stuff out there on it. Very active in the community and very generous in their giving. Kind of sad that the average Calgarian is not aware of the incredible work they do for the community at large.
I understand the work they do in the community, but many companies put money back into the community. I look at it as a major win for the owners as they are in a city that sells out each night regardless of the product on the ice. Many owners of NHL teams can't say the same. So again, why aren't we paying half for office towers as well?
I understand the work they do in the community, but many companies put money back into the community. I look at it as a major win for the owners as they are in a city that sells out each night regardless of the product on the ice. Many owners of NHL teams can't say the same. So again, why aren't we paying half for office towers as well?
You don't think that companies that have head offices in Calgary have been given huge incentives and subsidies to be here? Companies don't just decide to pick up and move to another major city on a whim. There are always large incentives and tax breaks that draw companies to cities. You are paying for those towers, or some of the leases to space in those towers, you just don't know it because the deals cut to bring companies to Calgary are not public knowledge. Sports teams get the same incentives, but because of the nature of their business much of those negotiations happen in the open.
@powederjunkie
Glad to see someone else to work for the Board and come away with a bad opinion of them. I know they cannot be completely blamed for the deal cut to establish the Saddledome, but that deal has been hurting the Flames for years. They do not control important revenue streams that would allow them access to the dollars that will allow them to be more aggressive in their game. This is why the team is looking for a new facility, one away from Stampede owned land. When people suggest they build back on the grounds they just don't understand the board or what they are like to deal with. The Stampede grounds are a non-starter, which is a good thing. I hope a deal gets done, but it won't disappoint me if it doesn't. I just hope the people of Calgary will understand if ownership finally decides to cash in that savings bond they are sitting on and the team moves on to greener pastures.
You don't think that companies that have head offices in Calgary have been given huge incentives and subsidies to be here? Companies don't just decide to pick up and move to another major city on a whim. There are always large incentives and tax breaks that draw companies to cities. You are paying for those towers, or some of the leases to space in those towers, you just don't know it because the deals cut to bring companies to Calgary are not public knowledge. Sports teams get the same incentives, but because of the nature of their business much of those negotiations happen in the open.
@powederjunkie
Glad to see someone else to work for the Board and come away with a bad opinion of them. I know they cannot be completely blamed for the deal cut to establish the Saddledome, but that deal has been hurting the Flames for years. They do not control important revenue streams that would allow them access to the dollars that will allow them to be more aggressive in their game. This is why the team is looking for a new facility, one away from Stampede owned land. When people suggest they build back on the grounds they just don't understand the board or what they are like to deal with. The Stampede grounds are a non-starter, which is a good thing. I hope a deal gets done, but it won't disappoint me if it doesn't. I just hope the people of Calgary will understand if ownership finally decides to cash in that savings bond they are sitting on and the team moves on to greener pastures.
Let's have a look at some of this as proof. I
So far I have heard that the Flames run a not for profit business which they put all profit back into the community, and now I hear that taxpayers are paying a bunch for towers for corporations.
I'm only doubting this as I have seen zero proof of any of this. My understanding for corporations moving head offices here is due to lower tax and not the promise to pay half of the head office.
I love that there are hopes to bring a MLS team to use this new field house.
Field House use:
For Profit CFL team? Check
Fort Profit MLS team? Check
Amateurs? If room permits. But the city is in desperate need of this facility for the people of Calgary so we should built it with the CalgaryNEXT proposal.
That's one thing that never will make sense with this proposal. If the city wants to allocate $200 million for a field house, why would they want to share with the Stampeders and, most likely, some sort of soccer franchise (be it MLS or some minor league)? Why not just build it themselves?
Game days would be off limits to the public all day I'm sure. Most of May would be taken by the Stamps for training camp. Then you add in daily practices for both football and soccer teams. Why would the city want to pay full price for a fieldhouse that isn't accessible to the public 20% of the time?
Last edited by JayP; 03-24-2016 at 11:29 AM.
The Following 3 Users Say Thank You to JayP For This Useful Post:
That's one thing that never will make with this proposal. If the city wants to allocate $200 million for a field house, why would they want to share with the Stampeders and, most likely, some sort of soccer franchise (be it MLS or some minor league)? Why not just build it themselves?
Game days would be off limits to the public all day I'm sure. Most of May would be taken by the Stamps for training camp. Then you add in daily practices for both football and soccer teams. Why would the city want to pay full price for a fieldhouse that isn't accessible to the public 20% of the time?
Glad to see someone else to work for the Board and come away with a bad opinion of them.
Here's the thing though...I didn't work for the "Board", I worked for the Calgary Stampede. I certainly had interactions with board members, and they would get involved in my business from time to time (although that was a part of their job (each director was assigned to various aspects of the organization). It only meant a little bit of politicking and playing some lip-service, but it didn't have much impact on how I, or anyone on my team made strategic decisions or implemented said strategy (no more than the influence from board members of any other company).
The Stampede has a CEO, CFO, and a few VP's. They signed my paycheque and had the power to send me packing if they were so inclined (FWIW I wasn't fired, so nothing to do with my bitterness). They are NOT members of the "Board". The "Board" is not sitting in a ivory tower coming coming up with the ideas and making the deals. The executive leadership team does all of that, and brings it to the Board for approval, feedback, guidance and direction. Of course the Board has a major say in how things go, and essentially guide the direction of the organization (and decide if the CEO sticks around or not), but it's a few hours a week for most of them (more in June/July of course). Running the top of an organization is lots of work, which is why it's down by the aforementioned CEO, CFO and VPs, who are salaried, and spend ~8 hours on any given day focused on Stampede.
This is hardly any different from any other organization (perhaps Stampede board members seem a bit more prominent, but I think that may have to do with the breadth of backgrounds they come from, including some higher profile folks. An oil company's board is going to be mostly other oil dudes, and maybe some bankers, etc.).
Why aren't people outraged at the Encana Board or Petro Canada Board, etc. for layoffs? "Stampede Board" must just has a nice ring to it.
Lastly, because the Stampede isn't putting a team on the ice, they should have been more willing to give up their revenue stream? Giving it up for nothing would probably have meant the loss of some full time jobs (people like I used to be)...the majority of Flames payroll expense is for P/T, typically second jobs for people; 5-20 hrs/week.
The Following 2 Users Say Thank You to powderjunkie For This Useful Post:
That's one thing that never will make with this proposal. If the city wants to allocate $200 million for a field house, why would they want to share with the Stampeders and, most likely, some sort of soccer franchise (be it MLS or some minor league)? Why not just build it themselves?
Game days would be off limits to the public all day I'm sure. Most of May would be taken by the Stamps for training camp. Then you add in daily practices for both football and soccer teams. Why would the city want to pay full price for a fieldhouse that isn't accessible to the public 20% of the time?
Maybe they want to be a good partner with the Calgary Sports and Entertainment group, because they can see the benefits this project can create?
That's one thing that never will make with this proposal. If the city wants to allocate $200 million for a field house, why would they want to share with the Stampeders and, most likely, some sort of soccer franchise (be it MLS or some minor league)? Why not just build it themselves?
Game days would be off limits to the public all day I'm sure. Most of May would be taken by the Stamps for training camp. Then you add in daily practices for both football and soccer teams. Why would the city want to pay full price for a fieldhouse that isn't accessible to the public 20% of the time?
I can't tell if you understand that we are in agreement with each other.
They're not fronting the money (and therefor sharing in any of the risk) so I don't consider that an equitable split of costs.
They also won't be receiving that loan from the city for free. There will be an interest rate attached. Or at least there had better be, and thus far there is nothing to suggest that there won't be.
Quote:
Originally Posted by Parallex
If the user rate falls short of projections (which we haven't seen) the city is the one left holding the bag on the shortfall.
Then interest will keep accruing and the amount the Flames will have to pay the city back will keep climbing until the $250M principal plus accrued interest is paid off. Think of it if you stopped paying your mortgage for a few months. Your tab would not stay frozen where you left off. It would keep climbing because of the interest rate. The only bag to be left holding here is counterparty risk (i.e. the Flames going bankrupt) and the risk of that would likely be reflected in the interest rate.
Quote:
Originally Posted by Parallex
If the Flames want to partner with the city I’m fine with that… but make it a real partnership and not some sham of a deal where the public pays most of the cost and private enterprise reaps most of the revenue. I want a fair deal for our city and a fair deal for our city in a PPP is a deal that using realistic projections results in it at least breaking even in terms of direct revenue received less direct cost incurred.
They're certainly not looking for a partnership. That much is clear. Nothing about this is equitable. I'm not saying that it is. I'm simply saying that the Flames are putting up $450M dollars.
Quote:
Originally Posted by Cappy
It's a user tax. That is still a tax that citizens will pay.
The ticket tax will be added to the price of the ticket. It will have no effect on the overall cost of the ticket.
As buddy with horrible taste in friends noted, Edmonton's prices are increasing dramatically; not including the ticket tax.
Sure, it's not the city's money, but it certainly isn't the Flames money either.
At the risk of repeating myself, as a consumer the only thing I care about is the total cost of the ticket. If it is, say, $110 total cost to me I don't care if $0, $10, or $87.65 of that is ticket tax. It costs me $110. The demand curve only cares about that total cost. If there were no ticket tax, the Flames aren't going to benevolently lower the total cost to me. They'd keep it at the total amount and pocket the change.
The ticket tax is simply the Flames borrowing against a slice of their future revenues.
The Following User Says Thank You to Frequitude For This Useful Post:
Pretty debatable to say the Flames are paying the ticket tax when they are just adding it to their tickets and having customers pay it.
You can argue they would charge the same price for tickets with or without the ticket tax but it also opens the door to justify higher prices because of the ticket tax.
