Arena negotiation discussion. UPD: Flames release their proposal

[corporatejay]

Originally Posted by IgiTang

Society has already said it’s acceptable. If you have ever spent a dime on a pro-sport item or ticket, you have already said that it’s ok for these billionaires to continue to profit at extreme rates via their franchises. To say “No” now is simply
Hypocrisy.

Out here on the island I see tons of “No LNG” signs for the coastal communities but they all have LNG running to their house. I see this as a similar hypocrisy.

This kind of money from tax payers is going to get gouged by the Municipality, Province and Feds anyway.. to think that if your dollar doesn’t go to the Flames that that’s where it ends. But that’s naive, your dollars are going to be gouged by a tax in some way or another. Perhaps a useless blue ring or a facility that a very small number of the population uses. Someway or another your dollars are going to leave your pocket without you having much of a say in the matter.
Why not have it be for something you claim you love? Like Calgary Flames Hockey?

So let me get this straight. I'm a hypocrite for saying that the people who benefit from the entertainment should have to pay for it? I would gladly pay more for my hockey tickets if it meant no public money. How much more? Who knows, if it becomes too expensive and people stop going then it's a broken system and the team needs to lower its price.


I'm fine with MY DOLLARS going to pay for the Flames, how is the fair to my friends and colleagues who don't go to hockey games at all.

[Weitz]

nvm

[karl262]

Originally Posted by Flash Walken

then you must be irate about Murray Edwards leaving the country.

I would do the same in his position. Do you try to maximise or minimise the amount of taxes you pay?

Any so yes, you're ok with those revenues leaving?

[CorbeauNoir]

Originally Posted by stone hands

correction, the flames are not losing money, they just dont make the top 10 in revenue anymore

ken kings statements on equalization payments is a red herring

For now. Will it still be a red herring in five years? Ten? If Calgary's economy continues to trend downhill under a hostile federal government and an exodus of the corporate support necessary to a pro team? When that oh-so-ironclad canadian TV deal expires and is subject to renegotiation?

It's a red herring until the moment it's not. Expect the QC treatment when that happens.

[Roughneck]

Originally Posted by karl262

$50m CAD per year in taxes collected off of the players salaries alone will leave, using todays dollars/salary cap.

Players are paying over 70% of their salaries in tax?

[Backlunds_socks]

Calgary's not leaving.

The NHL moved a team to Winnipeg a big town of 700,000 - not really a big city

The NHL started a 31st team in Las Vegas, not really a place to put a pro sport since its mostly transient.

There are other teams that financially need to move - so theres that.

Economics trump all other factors and its best for the flames to stay here.

[Parallex]

Originally Posted by Flash Walken

those taxes are paid federally and provincially, not to the city.

It's also not really "gone" the economic activity that generates the revenue that pays the players remains... it just gets shifted to different areas. It's not like season ticket holders will take the money they spend on hockey, dump it into a pile and literally burn it. It'll just be reinvested into different leisure activities.

[karl262]

Originally Posted by Roughneck

Players are paying over 70% of their salaries in tax?

USD vs CAD

[Flash Walken]

Originally Posted by karl262

I would do the same in his position. Do you try to maximise or minimise the amount of taxes you pay?

Any so yes, you're ok with those revenues leaving?

If the alternative is the city paying more than a billion dollars so that the players can pay about a billion dollars over 30 years to the provincial and federal governments, then yes, I am perfectly fine with those revenues leaving.

[Enoch Root]

Originally Posted by Major Major

There is a critical hole in your logic that you think is so sound. The league, as in 31 owners who all want to maximize their bottom line, just like Edwards, will NEVER allow the flames moving.

I think we need to apply some logic to your argument as well..

First of all, the other owners don't share in the revenues of the Flames. The players do - it's the players (NHLPA) that would be worse off if the Flames went to a city where revenues were lower.

However, for each individual owner, or ownership group, it might actually be beneficial for them if the Flames moved to a city with lower revenues. As long as that city didn't need subsidization. Here's why:

Each team has its own, independent revenue stream. But their primary expense is a joint function of total revenues. What this actually means for individual teams is that lower total revenues (due to lower revenues of a different team) means a lower salary cap, which means lower expenses, with no impact on their own individual revenues. In other words, an improved income statement. And on top of that, many of the US teams would rather have another major city like Houston role in once or twice a year, than have Calgary come to town (meaning their own revenues might also be enhanced).

Yes, again, if the new city were failing, and required revenue subsidization, then this argument wouldn't apply, and they would be worse off. But as long as Houston could hold its head above water, most owners would be better off with Houston than with Calgary, even though Houston's team revenues were lower than Calgary's.

Then there is the little matter of the relocation fee. I am pretty sure every owner would be in favour of that.

And as far as the Sportsnet TV deal goes, I don't see that as a concern for them either. All it means is fewer broadcasts (which is mostly positive), and eliminating one of the two least-watched teams, and replacing them with more Leafs coverage. Plus, adding Houston to the US TV market most likely has a larger positive impact on the next US TV deal than losing Calgary would have on the Canadian TV deal (or at the very least would partially offset it).

So IMO, I don't think the 'the league will never allow it' argument holds much water. In fact, I think the opposite is true.

[Diemenz]

Originally Posted by Parallex

As for why the other owners wouldn't allow them to move (any time soon)...

http://www.espn.com/nhl/attendance

... take a look at that list. Are the BOG really going to allow a top 10 attendance team to just up and move when there are several bottom 10 teams (By my count at least 4) that have either ownership problems or arena problems?

Do we have an example of them blocking a relocation because there was a team that was “worse off”?

Again I am not arguing it just seems there is a bunch of people with this concrete notation that they are correct in this thread yet it seems strictly opinion and is not really backed up by any previous facts. If there is some I’m totally on your side I’m just trying to understand why people so firmly believe the team will stay when from a financial aspect it makes zero sense for the owners to do so. I am a consultant for a private equity company and I cannot think of a single example in the last 20 years where anyone on any board blocked a relocation of a company, a business, or a project due to another entity within that company being less profitable, even if that meant that it would enter into an area that was already saturated. Like I said before I am far from an expert in the sports world economics which is why I am looking for some information on why it would operate differently.

On a side note thank you for the information in this thread from posters, a lot of it is great and is very informative!

[stone hands]

Originally Posted by Diemenz

Do we have an example of them blocking a relocation because there was a team that was “worse off”?

Again I am not arguing it just seems there is a bunch of people with this concrete notation that they are correct in this thread yet it seems strictly opinion and is not really backed up by any previous facts. If there is some I’m totally on your side I’m just trying to understand why people so firmly believe the team will stay when from a financial aspect it makes zero sense for the owners to do so. I am a consultant for a private equity company and I cannot think of a single example in the last 20 years where anyone on any board blocked a relocation of a company, a business, or a project due to another entity within that company being less profitable, even if that meant that it would enter into an area that was already saturated. Like I said before I am far from an expert in the sports world economics which is why I am looking for some information on why it would operate differently.

On a side note thank you for the information in this thread from posters, a lot of it is great and is very informative!

Imagine if your firm had 2 different offices, one being successful by most metrics and another being an absolute tire fire. You get the opportunity to expand into a *potentially* lucrative market, but you must relocate one of your existing offices. Why on earth would you move the office that performs well while keeping the failure? Why would you put move yourself from a position of having 1 known good franchise and 1 POTENTIALLY successful franchise to one known bad office and one potentially succesful franchise. it makes absolutely no sense to me, and these guys are by all accounts much more business savvy than i am

[Enoch Root]

Originally Posted by Parallex

It's also not really "gone" the economic activity that generates the revenue that pays the players remains... it just gets shifted to different areas. It's not like season ticket holders will take the money they spend on hockey, dump it into a pile and literally burn it. It'll just be reinvested into different leisure activities.

For the fan that goes to one or two games a year, yes I agree that they will simply spend their entertainment dollars elsewhere within the city.

But for STHs (the vast majority of the revenues), I disagree with this sentiment. The average pair of seats runs between $8 and $10 thousand a year. Do you really think that STHs are going to take than $10K and just go to Applebee's more often?

I, for one, will spend 100% of it on travel. And while I am not suggesting for one second that all STHs will spend all of it on travel, I would certainly posit that a good chunk of that foregone revenue is not going to be spent at Applebee's or the local Irish pub.

[Parallex]

Originally Posted by Diemenz

Do we have an example of them blocking a relocation because there was a team that was “worse off”?

We would never see that... by which I mean that a relocation "nay" vote would never be brought to the floor. The owner would just be informed that he did not have the required support of the BoG and it would never be recorded. So no we don't have an example and we won't ever have that example (regardless of whether it's happened or hasn't ever happened).

Although we do have an example of a change in ownership being blocked (that would have included relocation) in Phoenix.

[Manhattanboy]

As sure as night follows day, as spring follows winter, as the apple always falls to the ground the Flames will never ever leave Calgary...

[stone hands]

I'm taking the 4k i spend on the flames for season tickets this year and going out for dinner and enjoying local entertainment much more frequently next year when i dont renew

anecdotal evidence is the best evidence

[Enoch Root]

Originally Posted by stone hands

Imagine if your firm had 2 different offices, one being successful by most metrics and another being an absolute tire fire. You get the opportunity to expand into a *potentially* lucrative market, but you must relocate one of your existing offices. Why on earth would you move the office that performs well while keeping the failure? Why would you put move yourself from a position of having 1 known good franchise and 1 POTENTIALLY successful franchise to one known bad office and one potentially succesful franchise. it makes absolutely no sense to me, and these guys are by all accounts much more business savvy than i am

First of all, you're using extremes, and second, NHL teams are not branch offices, like your argument suggests.

[stone hands]

Originally Posted by Enoch Root

First of all, you're using extremes, and second, NHL teams are not branch offices, like your argument suggests.

how is it extremes

are the flames not succesful by most accounts? do they not sell out the majority of their games?

are there not a number of franchises that one could say are far less successful, bordering on tire fires like arizona?

[Enoch Root]

Originally Posted by stone hands

I'm taking the 4k i spend on the flames for season tickets this year and going out for dinner and enjoying local entertainment much more frequently next year when i dont renew

anecdotal evidence is the best evidence

First of all, I clarified my position with respect to it being anecdotal, and suggested how that might apply to a larger scale.

And second, I think you are just being obtuse. Let's see: $4K... and let's suggest an average bill of $80 per night. That would mean 50 dinners, or one more every week of the year than you are doing now.

Maybe you really like going to local restaurants, but I am going to go ahead and suggest that your (sarcastic and) anecdotal example doesn't happen.

Let's try and keep the arguments reasonable. How many STHs do you honestly think will spend all or substantially all of those entertainment dollars in Calgary? Sure, there are some that will transfer to the symphony or another type of entertainment. But it is beyond optimistic to think that most would.

[Rubicant]

I don't know why I keep checking this thread - it's the exact same arguments for 197 pages now.

If they truly are done negotiating and are "holding on as long as they can" I'd rather them just move now, rather than hanging around like a separated couple where nobody moves out.

If not, then quit running through all the plays in the public money for arena extortion playbook.