Arena negotiation discussion. UPD: Flames release their proposal

[Parallex]

Honestly I think I fall on the side of whomever fronts the money on the ticket tax portion is the side that's contributing it. Calling it a ticket tax is mostly just propaganda at this point anyways.

I dislike King referring to it as "Flames contribution" because it implies that there is no way for any partner to draw revenue from the project. That the only definition in Ken King land of contribution is a loss taken by the "partner". I don't appreciate being called a partner and references to investment when all they appear to be looking for is a handout.

The city offered them $185,000,000.00 for free. And they turn their noses up at it?

[Cecil Terwilliger]

All this talk of a ticket tax sucks. It keeps reminding me how much more expensive everything is going to be.

If it was about $50-60 to sit in the 2nd level greens 3-5 years ago, it is now closer to $80 and equivalent seats will likely be closer to $120 or more in the new building.

I recently bought concert tickets that were $45 face and cost me $70 total because of fees. That is only going to get worse with a ticket tax right? Is a $120 FV Flames ticket going to cost more like $175 after fees are added on?

This assumes tickets are purcahsed from ticketmaster.

How would the ticket tax apply to STHs? Would it be built into their ticket price? Excluded? Added on as a surcharge? Curious how that would affect buying tickets on CP for FV.

[the2bears]

Originally Posted by taco.vidal

LOL. Stick to reporting the news rather than commenting it. Those demands are absurd regardless of when they were made.

WTF dude... in a whole thread of commentary you come up with this gem?

[GreenLantern2814]

I thought Ken King was beginning to resemble Potter from It's a Wonderful Life, but now I'm convinced this is more accurate.

Spoiler!

Spoiler!

Tell me I'm wrong.

[JFK]

I'm still laughing at King using the phrase "Our citizens".

[SebC]

The Flames are simultaneously expressing a desire to "pay back" through a CRL and disappointment with their existing arena's inability to spur development... did I get that right?

The tricky thing here is sorting out the stuff the Flames know are ridiculous, "because negotiations", from the stuff they actually think they should get. But the city's offer is more than fair. Any other business would take it.

And yeah, if you have a house/car/whatever you probably pay more than 100% on it. That's how taxes work.

[Samonadreau]

Ticket tax is still being paid by the fans. It doesnt cut into the bottom line, rather is added on top. Its not the flames paying it, its the fans and its a gauranteed stream as long as they put a decent product on the ice. They can say its cutting into their revenue but its not cutting into thw bottom line and is comming out of fans pockets and is realized by the fan when they purchase a ticket. Like gst or pst. Fans will still pay and the building will be full.

[mccalgary71]

Originally Posted by Samonadreau

Ticket tax is still being paid by the fans. It doesnt cut into the bottom line, rather is added on top. Its not the flames paying it, its the fans and its a gauranteed stream as long as they put a decent product on the ice. They can say its cutting into their revenue but its not cutting into thw bottom line and is comming out of fans pockets and is realized by the fan when they purchase a ticket. Like gst or pst. Fans will still pay and the building will be full.

Of course it cuts into Flames revenue. When setting prices they have to take the tax into account when figuring out how high the market will pay. Cone on. Common sense.

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[Philly06Cup]

-ticket tax is propaganda so that fans may be willing to pay a higher price, and to avoid putting that amount into HRR

-what matters in this negotiation is who is fronting that money: city or team.

[PeteMoss]

Originally Posted by FiftyBelow

Sigh* microeconomics. I'll try and take a stab at it. Thinking about tax incidence, the burden of the tax depends on the price elasticity of supply and demand. From what the Flames are saying, I would believe that the price elasticity of demand is relatively inelastic. They've indicated that the amount of the proposed tax is a value that they could have charged either way, implying that consumers are price takers; I'm assuming within the limits of what a realistic tax rate would be. So my understanding is that the burden of the tax would ultimately fall on the consumer, as everyone here is intuitively suggesting. From this perspective, I'd feel like CSEC is simply trying to distort this understanding and have got it ultimately wrong... assuming I've got this simplified view right.

Flames (and most sports team) are also typically pretty bad at pricing anyways.

I assume the Flames have at least got on board with dynamic pricing so a game against the Leafs is more expensive than a game against the Panthers but ticket brokers basically exist because teams under price their own tickets for high demand games.

[StrykerSteve]

Watched King's conference just now. There are obviously two sides to every story, but I think agree with the Flames on this one. The amount of money the team brings into the city, be it through taxes, charitable endeavours, international tourism, etc. certainly needs to be considered when talking about what's in it for the city to be contributing something.

This isn't a restaurant we're talking about here. This is the Calgary Flames. They are the epicentre of this city. Do what needs to be done and get this done, for goodness sake.

[PeteMoss]

Originally Posted by transplant99

What metric are you using for these rankings?

Cause, other than existing stadium, San Diego and Oakland simply cannot be classified as bottom 5 market....which is why they have moved/are moving.

St Louis also falls into that category.

San Diego is a bottom five media market in the NFL.

I was wrong on Oakland so fair point there. They do share their market with the Giants which adds complications to the calculation - but if you go with a 50/50 split they are more middle of the pack.

[TheFlamesVan]

Originally Posted by taco.vidal

No one is questioning whether King is a nice guy in private or a good guy in general. The discussion is about how he is doing is his job which is being the public face of the business side of the Flames.

Yes,which in the post you quoted I discussed that exact thing. And stated that he wasn't coming off well.

And this shouldn't be the discussion. It's something the "anti public money" side is clinging to. It doesn't matter if you think he's doing a good job or not. All that matters is where the funds come from.

It isn't a personality contest. It's a tax and public benefit discussion.

[monkeyman]

Originally Posted by mccalgary71

Of course it cuts into Flames revenue. When setting prices they have to take the tax into account when figuring out how high the market will pay. Cone on. Common sense.

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A consumers willingness to pay is mostly psychological. Why do you think retailers price a lot of items at 4.99, 99, 999? A ticket tax is no different. It's a way of separating the Flames from the added cost and allows them to market their product at a lower price, making it more palatable to the consumer.
Do acts lower the price of their concert tickets due to the ticket tax when passing through Edmonton or do they just add the tax on top of their existing price?
Bottom line, a ticket tax will not prevent the Flames from increasing prices on tickets along with everything else in a new arena.

[Roughneck]

Originally Posted by StrykerSteve

Watched King's conference just now. There are obviously two sides to every story, but I think agree with the Flames on this one. The amount of money the team brings into the city, be it through taxes, charitable endeavours, international tourism, etc. certainly needs to be considered when talking about what's in it for the city to be contributing something.

This isn't a restaurant we're talking about here. This is the Calgary Flames. They are the epicentre of this city. Do what needs to be done and get this done, for goodness sake.

What taxes do the team bring into the city?

I'd also probably put the international tourism at 'negligible' when talking about benefit.

[mcjmcj]

I am fine with Flames ownership arguing that the city's propsal is unfair because the revenues the city would come from the Flames, but if the owners are arguing for transit or lrt to be free during game dsys and they dont pay costs for police, I think that is equally unreasonable.

[opendoor]

Originally Posted by Philly06Cup

-what matters in this negotiation is who is fronting that money: city or team.

Not really. All of the principal and interest would be covered through the tax, so it really comes down to having the ability to borrow that much money and the risk of default. Neither is really an issue in this situation. Whoever fronts the money is simply a middleman.

[iggy_oi]

Originally Posted by StrykerSteve

Watched King's conference just now. There are obviously two sides to every story, but I think agree with the Flames on this one. The amount of money the team brings into the city, be it through taxes, charitable endeavours, international tourism, etc. certainly needs to be considered when talking about what's in it for the city to be contributing something.

This isn't a restaurant we're talking about here. This is the Calgary Flames. They are the epicentre of this city. Do what needs to be done and get this done, for goodness sake.

What about the amount of money calgarians bring to the flames? When I pay for my season tickets, I get to watch hockey games and the flames make money. It's a straightforward transaction. With an arena, if my tax dollars are paying for it my return is I get the opportunity to spend money at the arena and the flames make money. If no tax dollars are used, tax payers get the exact same return, an arena to pay to watch events at which will make the flames money. The flames don't need us to pay anything, they want us to because not paying for something is cheaper than paying for something. I wasn't completely opposed to some public money going to the arena, but the way the flames have approached this whole negotiation has been cringe worthy. They need to come up with a better excuse for why we should pay for it than "Edmonton paid for the Oilers' new building"

[iggy_oi]

Originally Posted by Roughneck

What taxes do the team bring into the city?

Property tax and income taxes from all their employees. While it is a fair statement to make, it doesn't take into account the amount of tax payer funded resources the flames require to operate their business so it's a bit of a moot point.

[Bill Bumface]

Originally Posted by MBates

If the answer is - nobody, the city would have to build at 100% their cost, then in that context, the current city proposal is as unfair to the Flames as King says it is...is it not?

In your scenario, the City would get 100% of the revenue from the building.

If the City pays for 1/3 of the building and pays 1/3 the operating costs and receives 1/3 of the revenue, this would all be pretty easy to swallow.