New Edmonton Arena Construction will begin in March 2014

[nik-]

Yeah Fan support is higher, but if you have 3 more boxes, that's essentially the equivalent of what ... 2000 ticket purchase? How about a dozen more boxes?

Plus if he got in early and could be part of returning the Sonics, the earnings potential is way higher.

[Northendzone]

Originally Posted by Sidney Crosby's Hat

Although right now the ticket tax money goes straight to the Katz Group. In this new plan, the ticket tax money goes to the city so in essence, Katz is paying $225 million or exactly half.

This is a really good (but long) read on the issue and what the hang-ups are right now:

http://blogs.edmontonjournal.com/201...arena-project/

i skimmed the article and it still seems to me like there is more governemtn money than Katz money in this deal given subsidy's to run the arena and the government leasing the office towers.........

[Mike F]

Originally Posted by nik-

Yeah Fan support is higher, but if you have 3 more boxes, that's essentially the equivalent of what ... 2000 ticket purchase? How about a dozen more boxes?

Plus if he got in early and could be part of returning the Sonics, the earnings potential is way higher.

Like I said, the potential is there, but it was there in Phoenix, Columbus, ad Anaheim, and all of those teams lose money annually.

[longsuffering]

Originally Posted by Mike F

An NHL team could potentially generate so much more money elsewhere.

There's no shortage of potential gold mines that have dried up when the team actually set up shop, and there's no guarantee that a team going into Seattle would be a financial success if it struggled on the ice.

Fan support in Edmonton is essentially guaranteed.

Katz has got the city of edmonton right where he wants them. He's convinced them they're on the verge of a dynasty. Now he's going to attempt to blackmail the city into building him a sports palace or he's going to pack up his dynasty and move.

If the NHL allowed a move to ever happen, which I doubt they would in the next 5 years, coming on the heels of a labour dispute, it would damage hockey in Canada. That would be the tipping point for me for sure.

[flamesaresmokin]

Excellent news! Hopefully this means that the Flames can't continue hovering in the shadows ready to scoop up the same taxpayer funded deal the Oilers have been trying to snag any longer.

[Erick Estrada]

Originally Posted by flamesaresmokin

Excellent news! Hopefully this means that the Flames can't continue hovering in the shadows ready to scoop up the same taxpayer funded deal the Oilers have been trying to snag any longer.

I don't understand what you find excellent. The Oilers are going to get a taxpayer funded deal eventually and the Flames will likely seek the same deal. The deal will probably not be for as much as the Oilers ask for but it's going to happen and you will just have to deal with it.

[flamesaresmokin]

Originally Posted by Erick Estrada

I don't understand what you find excellent. The Oilers are going to get a taxpayer funded deal eventually and the Flames will likely seek the same deal. The deal will probably not be for as much as the Oilers ask for but it's going to happen and you will just have to deal with it.

I find it fantastic that our elected officials are standing up to billionaire owners that don't want to fund their own revenue generators! The sooner the masses realize that a new rink benefits them in essentially no way other then sitting in a new building instead of a slightly outdated one, the less likely it is your scenario plays out.

If Katz or the Flames don't like it, they can pack it up like they love to threaten every few years and enjoy a fruitful market like Kansas city. They'll have lost the money they would have spent to fund the building themselves in a matter of years.

[EddyBeers]

Originally Posted by flamesaresmokin

I find it fantastic that our elected officials are standing up to billionaire owners that don't want to fund their own revenue generators! The sooner the masses realize that a new rink benefits them in essentially no way other then sitting in a new building instead of a slightly outdated one, the less likely it is your scenario plays out.

If Katz or the Flames don't like it, they can pack it up like they love to threaten every few years and enjoy a fruitful market like Kansas city. They'll have lost the money they would have spent to fund the building themselves in a matter of years.

Exactly, take the team to Houston or El Paso or Mesa and get your huge profits down there.

[Erick Estrada]

Originally Posted by flamesaresmokin

I find it fantastic that our elected officials are standing up to billionaire owners that don't want to fund their own revenue generators!

Of course they are standing up to Katz. That's their job. Even if they were all willing to open up their wallets to the teams they know they have to show taxpayers that they aren't going to roll over and hand it to them. Katz like all good businessmen is going to push and try to milk every last penny he can and the elected officials will draw the line but I have no doubt in my mind that the Oilers will get their money.

[flamesaresmokin]

Originally Posted by Erick Estrada

Of course they are standing up to Katz. That's their job. Even if they were all willing to open up their wallets to the teams they know they have to show taxpayers that they aren't going to roll over and hand it to them. Katz like all good businessmen is going to push and try to milk every last penny he can and the elected officials will draw the line but I have no doubt in my mind that the Oilers will get their money.

There's no doubt in my mind that its a completely terrible idea to give the Flames or Oilers even a cent of public money.

[FanIn80]

Originally Posted by Reaper

If he did move the Oilers you can pretty much guarantee the ransacking and arson of every Rexall Drugs in the greater Edmonton area.

Not to mention a few Safeways, Co-Ops and 7-11s since 90% of the people rioting won't even know why they're rioting or even wtf any of has to do with Rexall to begin with.

[FanIn80]

I have to say I don't appreciate the way our ownership group is being lumped in along side Darryl Katz. We're talking about a group of people who have been here and owned this team for a very long time, and who have remained dedicated to keeping the Flames here in Calgary the entire time. They lost a ton of money along the way, and yes they had "season ticket drives" in the lean years, and there was talk of not being able to keep the team with the "current economics" of that time... but these guys are not, and and should never be compared with the likes of Darryl Katz.

[JayP]

Originally Posted by FanIn80

I have to say I don't appreciate the way our ownership group is being lumped in along side Darryl Katz. We're talking about a group of people who have been here and owned this team for a very long time, and who have remained dedicated to keeping the Flames here in Calgary the entire time. They lost a ton of money along the way, and yes they had "season ticket drives" in the lean years, and there was talk of not being able to keep the team with the "current economics" of that time... but these guys are not, and and should never be compared with the likes of Darryl Katz.

And yet when it comes down to getting taxpayers to put up hundreds of millions of dollars to fund a new arena I guarantee they'll act the same way. The Flames owners may be better overall owners, but when that kind of money is on the line (even though they don't need it - Katz doesnt either), it's hard for them not to.

The onus is on government to be smart enough to look into independent economic research and not the privately funded, biased "research" the owners spread around every time this issue comes up in a new city.

[Tinordi]

Originally Posted by JayP

And yet when it comes down to getting taxpayers to put up hundreds of millions of dollars to fund a new arena I guarantee they'll act the same way. The Flames owners may be better overall owners, but when that kind of money is on the line (even though they don't need it - Katz doesnt either), it's hard for them not to.

The onus is on government to be smart enough to look into independent economic research and not the privately funded, biased "research" the owners spread around every time this issue comes up in a new city.

The research is well established. There is very little public return in investing in pro sports facilities. Owners of pro-sports fanchises have huge financial incentives to offset as much possible the cost of these facilities but there's really nothing in it for the public.

[Tinordi]

http://onlinelibrary.wiley.com/doi/1...omisedMessage=

This article explores the literature on the impact of professional sports teams and stadiums on their host communities. A large body of research has addressed these issues, some of it academic and much of it for hire by team and sport boosters. The broad conclusion of this literature is that stadiums and franchises are ineffective means to creating local economic development, whether that is measured as income or job growth. There may be substantial public benefits from stadiums and franchises, but those too are insufficient to warrant large-scale subsidies by themselves. In combination with consumer surpluses from attendance, however, subsidies may be efficient. (JEL R58, J30, H71, L83)

http://www.ualberta.ca/~bhumphre/papers/pfm2003.pdf

Local political and community leaders and the owners of
professional sports teams frequently claim that professional sports
facilities and franchises are important engines of economic
development in urban areas. These structures and teams allegedly
contribute millions of dollars of net new spending annually and create
hundreds of new jobs, and provide justification for hundreds of
millions of dollars of public subsidies for the construction of many new
professional sports facilities in the United Sates over the past decade.
Despite these claims, economists have found no evidence of positive
economic impact of professional sports teams and facilities on urban
economies. We critically review the debate on the economic effects of
professional sports and their role as an engine of urban economic
redevelopment, with an emphasis on recent economic research.

http://web.centre.edu/johnsonb/eco40...rts%20Econ.pdf

This article reports an application of the contingent valuation method to measure the value
of public goods generated by a professional sports team, the Pittsburgh Penguins of the
National Hockey League. The data and analysis indicate that a major league sports team
can produce widely consumed public goods such as civic pride and community spirit and
that the value of those public goods may be substantial. However, in the case of the Penguins, the value of the public goods is far less than the cost of building a new arena

http://www.jstor.org/discover/10.230...21101221326037

Sports leagues, franchises, and civic boosters tout the economic benefits of professional sports as an incentive for host cities to construct new stadiums or arenas at considerable public expensive. Past league-sponsored studies have estimated that new stadiums franchises and mega-events such as the Super Bowl increase economic activity by potentially hundreds of millions of dollars in host cities. A detailed regression analysis of taxable sales in Florida over the period extending from 1980 to 2005 fails to support these claims. New stadiums, arenas and franchises as well as mega-events, appear to be as likely to reduce taxable sales as increase them. Similarly, strikes and lockouts in professional sports have not systematically lead to reductions in local taxable sales.

[Locke]

Originally Posted by mikephoen

I would be dancing in the streets! Maximum schadenfreude!

I would walk around Edmonton in Flames gear just to remind them what isnt there anymore.

[flamesaresmokin]

Originally Posted by Tinordi

The research is well established. There is very little public return in investing in pro sports facilities. Owners of pro-sports fanchises have huge financial incentives to offset as much possible the cost of these facilities but there's really nothing in it for the public.

As an alternative I'd like to see the government offer the owners a low interest loan using public funds to build these arenas. They get their money at low cost and the public gains interest on their tax dollars.

Its hardly unfair either as the owners would make that interest back when they cash their first arena naming rights cheque.

[Tinordi]

You're probably wondering why the afformentioned peer-reviewed articles are arriving to these conclusions.

In a nutshell, sports franchises do not expand to any noticeable degree the size of the total budget in a jurisdiction for entertainment. Sports is entertainment and we all have a household budget to consume entertainment. All of the households in a jurisdiction then have the aggregate budget. Whether there is a sports team there or not, the budget does not change. So instead of going to the Flames game, we will spend that entertainment budget on other types of entertainment meaning no net change in economic activity.

For a sports team to actually have a net benefit it would need to demonstrate that it was either adding sports spending from other jurisdictions (net of outflowing sports spending from within the jurisdiction to other franchises) or that people were spending a higher budget on entertainment to a noticeable degree. Neither effect happens.

As a result, there's no incremental economic activity from sports franchises on the new very expensive stadiums that support them.

For the public, it's just a plain bad investment and unnecessary knowing that the owners of franchises would have to pay for them if there were no public subsidies.

[Tinordi]

Originally Posted by flamesaresmokin

As an alternative I'd like to see the government offer the owners a low interest loan using public funds to build these arenas. They get their money at low cost and the public gains interest on their tax dollars.

Its hardly unfair either as the owners would make that interest back when they cash their first arena naming rights cheque.

Sure some notional support would be okay such as jointly paying for access and egress rights of way that would be used without the stadium and using the state's credit rating to lower financing costs (provided the owners provided collateral). But to outright pay for the arena or to subsidize it by lower than market value land sales etc. is just not sound policy.

[Tinordi]

But it's very important to understand that a dollar spent on arenas means a dollar not spent somewhere else. For the City of Edmonton $100 million is alot of scratch. How many swimming pools, after school programs, etc. is that? How much road maintenance is that? Or provided that you keep the same level of service how much additional property tax revenue per household is that? And is it equitable to be charging higher property tax on people who aren't even hockey fans?