Arena negotiation discussion. UPD: Flames release their proposal

[Flash Walken]

There are more potential ownership groups in canada/alberta than there are teams to own, which is why Brett Wilson owns a piece of the predators and why the Flames have continually consolidated ownership rather than take on new partners to spread the burden of operating the club in such a poor money making environment.

It's all one incredibly shallow and obvious bluff that comes from talking out of both sides of their mouths at once.

[Loyal and True]

Originally Posted by Major Major

Regardless of how much money the flames do make, it is not debated that there are many teams in the NHL that are bleeding money... Profusely. No one will claim that Calgary's financial situation is dire, nor are they claiming so. Just that they could be doing better. Fine, and I hope they do.

Now, some teams in the league are losing 10s of millions of dollars per year, and Carolina specifically is speculated to be for sale. The opportunity for a BIG loser in cash to move to a profitable situation is a huge infusion of cash for the whole league. Asking your shareholders to vote for an option that would would make them less profitable as a business would be impossible.

However, making it very clear to them that they will threaten to move teams to leverage new buildings is nothing new and would be widely accepted practice.

To argue that Calgary should move would be to go against the profit worship and squeezing every penny possible philosophy that bettman has made his living on. It simply makes no sense.

This argument only holds water in the short term.

Right now, there are a few other teams in worse situations that will be resolved one way or another. Everyone expects them to be sold or relocated in the near future.

Then it will be our turn, and what will our resolution be?

I predict that eventually the city and owners will come to a reasonable split on arena costs and the Flames will stay for another 30+ years.

But if they don't come to an agreement then the owners will be able to justify selling the team. It is not an "empty threat". It is just reality at some point.

The leverage that exists here is simply natural. But it is not artificial.

[stone hands]

Originally Posted by CorbeauNoir

None of that is relevant. If the owners are willing to sell what happens in the other 30 cities means nothing, they've leapfrogged over all those other tire fires. That's why Winnipeg claimed the Thrashers and not the Coyotes. Saying "yeah but look at X" doesn't guarantee anything.

fair point, i just have reservations about the bog allowing a relocation(the real question here, not purchase of the team) from calgary to houston when the rest of the league has some real blights, even when taking into consideration relocation fees

[Major Major]

Originally Posted by Loyal and True

This argument only holds water in the short term.

Right now, there are a few other teams in worse situations that will be resolved one way or another. Everyone expects them to be sold or relocated in the near future.

Then it will be our turn, and what will our resolution be?

I predict that eventually the city and owners will come to a reasonable split on arena costs and the Flames will stay for another 30+ years.

But if they don't come to an agreement then the owners will be able to justify selling the team. It is not an "empty threat". It is just reality at some point.

The leverage that exists here is simply natural. But it is not artificial.

So you honestly believe that first the NHL will sell and move the 15 to 20 teams in a worse financial spot than the flames, then circle back and move Calgary? This is the concern? There is like one relocation per decade in the NHL. There aren't a lot of Houston/Seattle markets out there, and 1 is earmarked for expansion. This is really reaching, sorry to say.

[Strange Brew]

Originally Posted by Flash Walken

There are more potential ownership groups in canada/alberta than there are teams to own, which is why Brett Wilson owns a piece of the predators and why the Flames have continually consolidated ownership rather than take on new partners to spread the burden of operating the club in such a poor money making environment.

It's all one incredibly shallow and obvious bluff that comes from talking out of both sides of their mouths at once.

Yeah it's this. There is zero reason to expect the Edwards and co. are selling the team to Fertitta in Houston.

[opendoor]

Originally Posted by CorbeauNoir

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.

What a weird argument. You're suggesting that in 5-10 years an NHL team won't be viable in Calgary because of the economy, yet you want the city to commit to spending hundreds of millions of taxpayers' dollars over the next three decades to keep the team? How does that make even a bit of sense?

[Parallex]

Originally Posted by ComixZone

If the City of Calgary hasn’t come around to a deal structured much closer to what other comparable markets have done

Uh huh, "other comparable markets". Alright CSEC... I submit Winnipeg & Vancouver as "comparable markets"... you will of course submit Edmonton. Let's see what non-private financing they got...

Edmonton: 200M in Public Money
Winnipeg: 41M in Public Money
Vancouver: 0M in Public Money

... by all means let's discuss a deal structured much closer to what other comparable markets have done.

[jammies]

The Calgary Flames are worth ~400-430 Million and the Coyotes are worth ~200-220 Million. Why is this guy going to spend an extra $200 million to buy the Flames, exactly? So the BoG can make a point? That sounds likely.

[GioforPM]

Originally Posted by jammies

The Calgary Flames are worth ~400-430 Million and the Coyotes are worth ~200-220 Million. Why is this guy going to spend an extra $200 million to buy the Flames, exactly? So the BoG can make a point? That sounds likely.

Because it's a better team of course

On a more serious note, I have a lot of difficulty predicting what the BOG will do at any point. Lots of their decisions in the past are a little baffling, and they are not all strong transactional businessmen. They also have their own individual agendas, cliques within the group and regional concerns.

The BOG might, for example, think that a team going out of Alberta (and leaving one team behind) is a better than removing Arizona and leaving a large hole in the map. That makes little sense to me, and you could make a better argument to move Buffalo.

[Enoch Root]

Originally Posted by jammies

The Calgary Flames are worth ~400-430 Million and the Coyotes are worth ~200-220 Million. Why is this guy going to spend an extra $200 million to buy the Flames, exactly? So the BoG can make a point? That sounds likely.

Obviously, if you are looking to buy a team today, the Coyotes would be the cheapest, and therefore most likely, target. However, the league may have other things in mind for the Arizona franchise, and may not want to see that happen.

As far as that applies to the Flames issue, I would imagine that the entire landscape will be much different by the time they became available for purchase (if that ever happens).

[Corral]

I'm pretty sure Bettman would clean the toilets at Rogers head office, if Rogers told him to do it. So i'm also pretty sure when Rogers says the Flames aren't leaving Calgary during the current Billions of dollars TV contract - because they would have paid several less billions if the Flames weren't in Calgary - the Flames aren't leaving Calgary until at least that contract is over.

And the NHL is so predictable - when the Canadian dollar sinks - they start making noise about moving our franchises. Not a peep of it when the Canadian dollar is closer to par.

Go back into your hole Gary.

[edslunch]

Originally Posted by Loyal and True

But how much of that money stays in Calgary, in Alberta or even Canada for that matter?



Buying products imported from other countries is way different than paying local salaries that are taxed here

The taxes go to other levels of government not the city. Let them chip in and we’re good. Hello Olympics?

I do think the game night activity would be hit which has a more local impact.

[ComixZone]

Originally Posted by Parallex

Uh huh, "other comparable markets". Alright CSEC... I submit Winnipeg & Vancouver as "comparable markets"... you will of course submit Edmonton. Let's see what non-private financing they got...

Edmonton: 200M in Public Money
Winnipeg: 41M in Public Money
Vancouver: 0M in Public Money

... by all means let's discuss a deal structured much closer to what other comparable markets have done.

If you think Vancouver is a comparable, well...you're wrong. Especially when you compare it to Calgary today.

Winnipeg lost their team, went without it for...20'ish years, before someone came back and invested in Winnipeg...and there are SO many businesses investing in Calgary right now that I'm sure the City of Calgary already has someone lined up as a building partner for a new arena...or, wait...right, they've alienated the only publicly known partner they had, so...

Edmonton is your comparable. Unless we're having a talk about the potential return of the Calgary Flames in 2040 under completely different economic circumstances.

Also, your "uh huh" and "Alright CSEC" dismissive tone sure is enjoyable.

[Parallex]

Originally Posted by ComixZone

Also, your "uh huh" and "Alright CSEC" dismissive tone sure is enjoyable.

As is your transparent attempt to limit "comparable markets" to Edmonton and only Edmonton... Repeat after me: CSEC is not going to get the Edmonton deal. The sooner they accept that the sooner we can get an arena deal done. Calgary is not Edmonton, Edmonton is not Calgary.

Really I have zero interest in seeing my taxpayer dollars go towards seeing N. Murray Edwards "win" some asinine dick measuring contest with Darryl Katz...

Calgary Flames Revenue: $121M (Estimated by Forbes)

Calgary Stampeders Revenue: ?? (Edmonton Eskimo revenue was $23.5M so let's use that)

Calgary Hitmen Revenue: ?? (Hitmen have the 3rd highest attendance in the CHL and the team with the 4th highest... the Kitchener Rangers... pull in $6.5M let's use that).

Calgary Roughnecks Revenue: ?? (I have no idea but if we use an average ticket price of $30 x 11622 (average attendance) x 9 = 3.1M (which doesn't even include concessions).

So let's combine those 4 properties: 121 + 23.5 + 6.5 + 3.1 = 154.1M
Now... what % of that collective will see use at an arena (as opposed to a stadium)? 130.6/154.1=84.75%. So 84.75% will see no change whatsoever from CSEC moving from CalgaryNext to a solo arena project... now what is 84.75% of CSEC offer on CalgaryNext (which would house that 84.75%)? It's $381.38M... what is the CSEC offer on a standalone arena (which again will provide a venue for 84.75 of their revenues operations)? it's (if you buy the ticket tax being entirely a CSEC contribution... which I do in part but don't wholly) 275.00M. Why is there a 106.38M discrepancy between those two numbers? IMO CSEC offer on a standalone arena should start at $381.38M.

... IMO CSEC is to hung up on "the ratio". They should forget about Edmonton (because again: Calgary is not Edmonton and Edmonton is not Calgary) and negotiate based on their own (and Calgary's) economic situation.

[simmer2]

Originally Posted by Parallex

As is your transparent attempt to limit "comparable markets" to Edmonton and only Edmonton... Repeat after me: CSEC is not going to get the Edmonton deal. The sooner they accept that the sooner we can get an arena deal done. Calgary is not Edmonton, Edmonton is not Calgary.

Really I have zero interest in seeing my taxpayer dollars go towards seeing N. Murray Edwards "win" some asinine dick measuring contest with Darryl Katz...

Calgary Flames Revenue: $121M (Estimated by Forbes)

Calgary Stampeders Revenue: ?? (Edmonton Eskimo revenue was $23.5M so let's use that)

Calgary Hitmen Revenue: ?? (Hitmen have the 3rd highest attendance in the CHL and the team with the 4th highest... the Kitchener Rangers... pull in $6.5M let's use that).

Calgary Roughnecks Revenue: ?? (I have no idea but if we use an average ticket price of $30 x 11622 (average attendance) x 9 = 3.1M (which doesn't even include concessions).

So let's combine those 4 properties: 121 + 23.5 + 6.5 + 3.1 = 154.1M
Now... what % of that collective will see use at an arena (as opposed to a stadium)? 130.6/154.1=84.75%. So 84.75% will see no change whatsoever from CSEC moving from CalgaryNext to a solo arena project... now what is 84.75% of CSEC offer on CalgaryNext (which would house that 84.75%)? It's $381.38M... what is the CSEC offer on a standalone arena (which again will provide a venue for 84.75 of their revenues operations)? 275.00M. Why is there a 106.38M discrepancy between those two numbers? IMO CSEC offer on a standalone arena should start at $381.38M.

... IMO CSEC is to hung up on "the ratio". They should forget about Edmonton (because again: Calgary is not Edmonton and Edmonton is not Calgary) and negotiate based on their own (and Calgary's) economic situation.

I read your post multiple times and I cannot for the life of me follow your logic of how you came to 381.38M as their offer .

Maybe it's late and it has been a long week but I'm confused.

[Parallex]

Originally Posted by simmer2

I read your post multiple times and I cannot for the life of me follow your logic of how you came to 381.38M as their offer.

I took the % of CSEC operation (based on revenue) that would be housed in a new arena (basically everything except the Stampeders). So the revenue for Flames + Hitmen + Roughnecks and guesstimated (conservatively I might add) it to be 84.75% of CSEC total revenue. I then compared it to their initial offer on CalgaryNext (450M) 450 x .8475= 381.38M.

381.38M isn't their offer... but based on CalgaryNext it should be. That it isn't indicates to me that they're hung up on getting "The Edmonton Deal" which boils down them getting taxpayers to take a loss of 50% (or more) of the total project value.

[Macindoc]

Originally Posted by Parallex

As is your transparent attempt to limit "comparable markets" to Edmonton and only Edmonton... Repeat after me: CSEC is not going to get the Edmonton deal. The sooner they accept that the sooner we can get an arena deal done. Calgary is not Edmonton, Edmonton is not Calgary.

Really I have zero interest in seeing my taxpayer dollars go towards seeing N. Murray Edwards "win" some asinine dick measuring contest with Darryl Katz...

Calgary Flames Revenue: $121M (Estimated by Forbes)

Calgary Stampeders Revenue: ?? (Edmonton Eskimo revenue was $23.5M so let's use that)

Calgary Hitmen Revenue: ?? (Hitmen have the 3rd highest attendance in the CHL and the team with the 4th highest... the Kitchener Rangers... pull in $6.5M let's use that).

Calgary Roughnecks Revenue: ?? (I have no idea but if we use an average ticket price of $30 x 11622 (average attendance) x 9 = 3.1M (which doesn't even include concessions).

So let's combine those 4 properties: 121 + 23.5 + 6.5 + 3.1 = 154.1M
Now... what % of that collective will see use at an arena (as opposed to a stadium)? 130.6/154.1=84.75%. So 84.75% will see no change whatsoever from CSEC moving from CalgaryNext to a solo arena project... now what is 84.75% of CSEC offer on CalgaryNext (which would house that 84.75%)? It's $381.38M... what is the CSEC offer on a standalone arena (which again will provide a venue for 84.75 of their revenues operations)? it's (if you buy the ticket tax being entirely a CSEC contribution... which I do in part but don't wholly) 275.00M. Why is there a 106.38M discrepancy between those two numbers? IMO CSEC offer on a standalone arena should start at $381.38M.

... IMO CSEC is to hung up on "the ratio". They should forget about Edmonton (because again: Calgary is not Edmonton and Edmonton is not Calgary) and negotiate based on their own (and Calgary's) economic situation.

Forbes estimates the Flames operating income to be $18M. So if the Flames' ownership was given a $500M interest-free loan to build a new arena, and if net income were to remain relatively flat (as one may expect based on using outdated facilities) it would take 28 years of that income to pay off the loan without the ticket tax. CSEC is taking the position that the ticket tax is in part its own contribution to the effort, as increased ticket prices will result in reduced ticket sales, considering that the dome is already not selling out at current prices. The Stamps' revenue will have little to no impact, they have far fewer seats, box seats and concessions than Edmonton, have the oldest stadium in any professional football league in North America and are desperately in need of a new stadium, so they will have little to no net income (I suspect that CSEC is likely subsidizing the Stamps' operations). It is unlikely that any ownership group will be willing to foot the bill for an arena under these conditions.

You are right, Calgary is not Edmonton, in the sense that Calgary has neither a modern professional football stadium nor a modern professional hockey arena, nor for that matter a fieldhouse. But in just about every other way, Edmonton is Calgary's closest comparable, with similar tax rates, populations, attendance rates, and gross and net incomes of its professional hockey franchises. Vancouver is not comparable, with an estimated value and operating income almost twice that of the Flames.

This is not to say that the Flames will likely leave Calgary in the short term, and ownership has stated that the team will operate in the Saddledome as long as doing so is financially viable. What we will see over time with the relative erosion of income compared to every other team in the league is that the Flames will transition from being a cap team to being a budget team. There is not necessarily anything wrong with that, but fans should not expect that the Flames will be able to ice a team that is a perennial Stanley Cup contender with a budget salary structure. So, if the people of the city are happy to have the Oilers as the province's model franchise in order to save some tax dollars, well, that is their prerogative, because after all, it is their tax money, and there are certainly more pressing matters in the city than a professional sports franchise.

One could argue that times of economic slowdown are the best times for governments to invest in infrastructure, due to lower costs and the boosts these projects may offer to slumping local economies, but the numbers don't always show that there are significant benefits in doing so.

I guess I'm kind of on the fence here, I feel that having the Flames and the Stamps boosts civic pride, offers entertainment opportunities and improves the quality of life of Calgary's citizens, but I also appreciate that many people can't or don't want to pay increased property taxes in order to enjoy the benefits of having these teams. I just hope that both the city and CSEC stop being so bullheaded and start to work together to find practical solutions.

And yes, it is clear that no team is likely to get the Edmonton deal again, but I do believe that a new arena is simply not going to happen without some partnership between the team and one or more levels of government (even the new arena in Detroit, which is sometimes cited as a privately funded venture, received $324M U.S. in public funding, and has much higher revenue for ownership because it houses an NHL team and an even more profitable NBA team).

[Bill Bumface]

This just makes me hate Edmonton more. If they didn't bend over for the oilers, the Flames wouldn't have that as a benchmark for negotiations.

Thanks Edmonton.

[crapshoot]

Originally Posted by Bill Bumface

This just makes me hate Edmonton more. If they didn't bend over for the oilers, the Flames wouldn't have that as a benchmark for negotiations.

Thanks Edmonton.

Setting horrible benchmarks is just about the only thing Edmonton and the Oilers are good at. Arena deal, Draisaitl contract, 6x6 deals. The list goes on.

[Fire]

Originally Posted by jammies

The Calgary Flames are worth ~400-430 Million and the Coyotes are worth ~200-220 Million. Why is this guy going to spend an extra $200 million to buy the Flames, exactly? So the BoG can make a point? That sounds likely.

The cost of buying and moving a franchise would be the same if the they bought the Coyotes or Flames. The value of the franchise in their old city is irrelevant. Bettman wouldn't allow the Coyotes to be sold and moved for only $200 million.