Arena negotiation discussion. UPD: Flames release their proposal

[ToraToraTora]

Originally Posted by thymebalm

I'd help him out of the well, I just don't want to have to do 120% of the work to get him out.

If you helped him out of the well, he would refuse because it would have been him doing 120% of the work.

[Phaneufenstein]

double burn, well done gentlemen

[getbak]

Originally Posted by ToraToraTora

Apparantly the Canadian Bar Association is putting on an event with Ken King to offer tips and tricks in effective negotiation.

I want to know how he negotiated himself from a popular member of the community to someone who many Flames fans wouldn't help if he fell into a well.

[Frequitude]

Originally Posted by Demzy84

Incorrect, the city is not putting 1/3 of the cost to the arena. The money the city is putting in will be paid back.

If city was offering to just pay 1/3 of the cost with no strings attached, this arena deal would be done.

Neither rent (if the city owns the building) nor property taxes (if the Flames own the building) constitute "repayment" of the City's public contribution. They're freaking rent or property tax just like everyone else pays when they occupy space in this city.

[EldrickOnIce]

Originally Posted by Frequitude

Neither rent (if the city owns the building) nor property taxes (if the Flames own the building) constitute "repayment" of the City's public contribution. They're freaking rent or property tax just like everyone else pays when they occupy space in this city.

The Oilers 30 year lease payment is counted as part of Katz share of contribution toward the project.

[GGG]

Originally Posted by Frequitude

Neither rent (if the city owns the building) nor property taxes (if the Flames own the building) constitute "repayment" of the City's public contribution. They're freaking rent or property tax just like everyone else pays when they occupy space in this city.

Just discuss it as yearly subsidies whether it's a upfront capital payment or tax/rent discounts. It makes it so much easier for everyone.

City offer is 185 million up front is a 8.5 million subsidy for 30 years @ 3% interest.

Current subsidy is 5-7 million in free rent / taxes plus current value of dome.

More or less the same amount of money per year.

Flames offer wanted 280? Up front plus 5-7 million in property taxes plus development deals

So somewhere around 18-20 million in subsidies per year.

[corporatejay]

Originally Posted by EldrickOnIce

The Oilers 30 year lease payment is counted as part of Katz share of contribution toward the project.

Edmonton got ####ed on that deal. Hard!!! They are spinning it any way they can.


Sent from my iPhone using Tapatalk

[SebC]

Originally Posted by PeteMoss

Very likely your new seat isn't going to be any bigger or more comfortable than your current seat, very likely you'll end up just as far or further from the action. But you'll pay a ton more per ticket and likely for concessions - in return - you'll get a bigger concourse (so people will go out there more and spend more money).

It's almost a paradox. Why do markets support higher prices for the same products in new arenas? There must be people who see value in it, or the teams would be pricing themselves out. Yet, I agree with you that the value is not there.

[getbak]

Speaking of concession prices, the Falcon's new stadium in Atlanta has introduced what they call "Fan First Menu Pricing"...




$5 for a 12oz Draft Beer. Refillable Coke for $2.

[powderjunkie]

$5.2 Billion. That number will very likely be a mighty big impediment to moving the Flames.

It's possible that the Rogers execs and lawyers are so stupid that they didn't consider this possibility, but I wouldn't bet on it. Even if not explicitly considered in the contract (consequences of a team leaving Canada), it could be a way from them to get out of the deal altogether, as you can damn sure bet the contract specifies the properties involved (7 specific Canadian teams x 82+ games, etc.).

[Tinordi]

Yup just love the arena supporters waving their hands at the Rogers contact issue. It's worth billions. If you think for a second that it isn't water right on the composition and total games aired for Canadian teams then you aren't thinking.

There is no chance the BoG approves a move based on this contract alone. Flames threats to move are empty.

[Wormius]

I am still not really sure what the Flames would achieve by moving? I mean, wouldn’t they just be another guest in an arena elsewhere, only getting ticket revenue for hockey games at the new arena? Nobody is going to build an arena in another city and give the Flames free reign over the place. They’d just get there 42 games of ticket sales revenues and that would be it, wouldn’t it?

[GioforPM]

Originally Posted by Wormius

I am still not really sure what the Flames would achieve by moving? I mean, wouldn’t they just be another guest in an arena elsewhere, only getting ticket revenue for hockey games at the new arena? Nobody is going to build an arena in another city and give the Flames free reign over the place. They’d just get there 42 games of ticket sales revenues and that would be it, wouldn’t it?

Presumably the present owners would make a pile of money by selling it to someone in the other city. And yeah, for example, in the Houston example, that owner controls that building already, the Rockets play there.

The history of that building's funding is kind of interesting.

[GioforPM]

Some of the Houston tactics sound familiar, no?

(from Wikipedia)

Rockets owner Leslie Alexander first began to request a new arena in 1995, and attempted to release the Rockets from their lease at The Summit, which ran until 2003. However, he was denied by arena owner Chuck Watson, then-owner of the Aeros, who also wanted control of a new arena. The two sides agreed to equal control over an arena in a deal signed in 1997, but the proposal was rejected by city voters in a 1999 referendum. It was not until the city and the Rockets signed an amended agreement in 2001, excluding the Aeros, that the proposal was accepted.

Construction began in July 2001, and the new arena was officially opened in October 2003. The total costs were $235 million, with the city of Houston paying the majority, and the Rockets paying for enhancements. Toyota paid US$100 million for the naming rights.

In May 1995, several Texas sports teams, including the Houston Rockets, proposed legislation that would dedicate state tax revenue to build new arenas.[6] Although the bill was failed in the Texas House of Representatives,[7][8] Rockets owner Leslie Alexander announced he would continue to study the possibility of constructing a new arena in downtown Houston,[9] saying the 20-year-old Summit arena was too outdated to be profitable.[10] Although the Summit's management said they could renovate the building for a small part of the cost of a new arena,[11] the Rockets began talks with the city of Houston on a possible location for an arena,[12] They also negotiated with Houston Aeros and Summit owner, Chuck Watson, to release them from their contract with the Summit, which ran until 2003.[13]

As the negotiations continued into 1996, a panel appointed by Houston mayor Bob Lanier reported that building a new arena was "essential to keep pro sports in Houston".[14] After Watson rejected a contract buyout proposal of $30 million,[15] the Rockets filed a legal challenge against their lease,[16] stating the "need to be able to buy out" of the lease.[17] However, the city of Houston filed a counterclaim to force the Rockets to stay at the Summit, saying that if the Rockets did not honor their contract, then they might "have no incentive to honor any new agreement with the city of Houston to play in a new downtown sports arena".[18] The validity of the lease was eventually upheld,[19] and in April 1997, Lanier announced that the Rockets and Watson would have to agree to share control of the new arena equally, or lose access to it altogether.[20] After both parties agreed to the terms,[21] a bill that authorized increased taxes to pay for a new arena was signed into law in July, by then-Governor George W. Bush.[22]

However, after the National Hockey League decided not to consider Houston as a location for an expansion team because of the indecision over the new arena, Lanier said that he would not have a referendum in November.[23] The Rockets began an appeal in January 1998 against the court order to stay at the Summit,[24] but then dropped it in May, because they felt that a new arena would be ready by the time they finished their lease.[25] In January 1999, recently elected mayor Lee Brown guaranteed a referendum on the issue before the end of the year.[26] After several months negotiating with the Harris County-Houston Sports Authority, the Rockets finalized a deal to pay half of the constructions costs, and a referendum was set for November 2.[27] The deal was approved by Brown and the Houston City Council,[28] but Watson started an opposition group against the referendum,[29] saying the arena was "not in Houston's interest".[30] On November 3, the results of the referendum were announced, and the arena proposal was rejected by 54% of voters.[31] Alexander said "we never thought we would lose" and that they were "devastated by the loss".[31]

After the vote, NBA commissioner David Stern said "if there's not a new building...I think it's certain that the team will be relocated."[32] The Houston Sports Authority had not planned to meet with the Rockets until after the 1999–2000 NBA season ended, but after the Rockets began to talk to other cities about relocation, they resumed talks in February 2000.[33] Although the Rockets continued to negotiate with Louisville, Kentucky,[34] a funding plan for the arena in Houston was released in June.[35] A final agreement was proposed on July 6,[36] and both the Rockets and mayor Brown agreed to the terms.[37][38] After the city council approved the deal,[39] the proposal was placed on the November referendum ballot.[40] Leading up to the vote, the Rockets stressed that there would be "no new taxes of any kind",[41] although opponents said the new arena would raise energy consumption, and also contended that the public would pay for too much of the costs of the arena.[42] Contributions for the campaign for the arena included donations of US$400,000 from Reliant Energy, and a total of $590,000 in loans and contributions from Enron and Ken Lay,[43] who the Rockets said was a "tireless" force in the campaign.[44] On November 8, the arena was approved by 66% of voters.[45]

[GioforPM]

The final deal:

https://web.archive.org/web/20121013...d=2000_3230232

Negotiators say the final agreement, obtained by the Chronicle Tuesday night, addresses previous opponents' concerns in several ways:
There is no ticket tax, a loathed provision of the 1999 deal.
Financial arrangements are more amenable to a National Hockey League franchise, an attempt to placate would-be NHL team owner Chuck Watson.
There is a greater financial commitment from the Rockets; the effective up-front contribution is $105 million vs. $74 million in the 1999 agreement.
There are no tax abatements; in 1999 Rockets owner Leslie Alexander would have received an abatement on a parking garage he was to build.
The estimated $12 million to $15 million cost of the land, which as in the 1999 deal is to be purchased by the city's Convention and Entertainment Facilities Department, is less than half the cost of last year's proposed arena site.
The city will receive 5 percent of arena naming rights, or about $200,000 a year. Under previous iterations of this year's proposal, that revenue would have gone to the sports authority as part of the Rockets' rent payment.
The city will have more access to the arena, 20 dates as opposed to 10, and may use five of those dates for charitable organizations' fund-raisers.
Private interests will assist in construction of the facility's parking garage.
The basic terms of the $175 million arena agreement have remained unchanged for months. The sports authority will finance construction with its hotel and car rental tax revenue, and the Rockets will pay $8.5 million annually in rent to help pay off the bonds.

[Cecil Terwilliger]

Originally Posted by stone hands

Awesome interview on the fan right now, political scientist skewering the csec

[Strange Brew]

No doubt Ferrtitta wants an NHL team and would buy one tomorrow if the price was right. But as others have said, hard to imagine the league being cool with the Flames moving.

For what it’s worth, I’ve been to dozens of game in the Toyota Centre and the Saddledome and I will take the dome everyday. But I’m an old guy and I don’t always think newer is better.

[GioforPM]

Originally Posted by Strange Brew

No doubt Ferrtitta wants an NHL team and would buy one tomorrow if the price was right. But as others have said, hard to imagine the league being cool with the Flames moving.

For what it’s worth, I’ve been to dozens of game in the Toyota Centre and the Saddledome and I will take the dome everyday. But I’m an old guy and I don’t always think newer is better.

I'm not disputing an actual sale would be hard to bet through the BOG. I was just commenting on the question about why the Flames would move to a place where (in the poster's view) they still wouldn't have control of revenue. The answer was (a) the present owners would cash out and (b) if it went to Houston, that owner already has the lion's share of revenue (though the City does get a piece of the pie).

[CaramonLS]

Originally Posted by powderjunkie

$5.2 Billion. That number will very likely be a mighty big impediment to moving the Flames.

It's possible that the Rogers execs and lawyers are so stupid that they didn't consider this possibility, but I wouldn't bet on it. Even if not explicitly considered in the contract (consequences of a team leaving Canada), it could be a way from them to get out of the deal altogether, as you can damn sure bet the contract specifies the properties involved (7 specific Canadian teams x 82+ games, etc.).

Not only that, if it exists (I'd bet money that is does) it is possible the NHL would have pushed for it to extract more $$$ from Rogers if a Quebec team entered the picture.

[Lanny_McDonald]

Originally Posted by Tinordi

Yup just love the arena supporters waving their hands at the Rogers contact issue. It's worth billions. If you think for a second that it isn't water right on the composition and total games aired for Canadian teams then you aren't thinking.

There is no chance the BoG approves a move based on this contract alone. Flames threats to move are empty.

Do you have anything to back that up? Here's the original announcement.

https://www.nhl.com/news/nhl-rogers-...-deal/c-693152

The only things specific to teams is the regional broadcast rights for the eastern teams. I doubt the contract would have anything in there specific to teams, or team count or existence of teams. What would happen if Winnipeg just folded? Or on the other end, what would happen if Quebec was added? Is the contract null and void? No. What Rogers bargained for was the right to broadcast NHL hockey in the Canadian market. I do believe that would include any of the members teams, if they felt inclined to pay for the access. If there was even a clause in the contract for Canadian content, which I don't believe there would be one, the new owners could very easily pay what ever penalty to get out of said portion of the contract.