Arena negotiation discussion. UPD: Flames release their proposal

[Hockeyguy15]

Originally Posted by sureLoss

Not really. My takeaway from that press conference was that barring a revenue sharing deal, the Flames will still get 100% of the revenue regardless if the city owns or the Flames own the arena.

The only way city gets money is via rent or property tax.

But if the revenue projections are so high, and the property tax is a drop in the bucket wouldn't the city be able to rent it for more than they could collect on property tax?

I'm sure there is some validity to the comment, but without actual numbers it seems more like posturing.

[nik-]

Originally Posted by Vinny01

I should have clarified. They will increase their typical % but with the ticket tax will we see a double digit increase as STH?

I think when you see how this plays out, you'll be incredibly happy if it stays at just a 25% increase. Before the ticket tax.

It will likely be closer to 50%.

[Hot_Flatus]

Originally Posted by Hockeyguy15

Well it's easy for him to say that when the Flames would be owning the building. I wondering what his comment would be if the city owned it and the Flames were paying rent.

I'll take this comment with a grain of salt unless the projected numbers are released.

- Naming rights will be substantial and going directly to CSEC.
- STH's will all be getting kicked in the junk by massive increases, also going to csec.
- Food and beverage sales will improve along with other things like tours etc and fan experiences going to csec
- More suites and premium seat revenue will be going directly to csec.
- I would also assume that all other sponsorship's for in game advertising would be hiked through the roof which will go directly to CSEC.

Seems like a definitive drop in the bucket for sure as Nenshi stated. CSEC has definitely kicked themselves in the butt by stooping to this low. I hope they come crawling back to the table after realizing they can't possibly release their offer without looking like complete jerks.

[Weitz]

Originally Posted by Vinny01

I should have clarified. They will increase their typical % but with the ticket tax will we see a double digit increase as STH?

Edmonton's season tickets went up 20-60% depending on seats. From what I have heard.

Plus things like the PL will be gone.

[Hockeyguy15]

Originally Posted by Hot_Flatus

- Naming rights will be substantial and going directly to CSEC.
- STH's will all be getting kicked in the junk by massive increases, also going to csec.
- Food and beverage sales will improve along with other things like tours etc and fan experiences going to csec
- More suites and premium seat revenue will be going directly to csec.
- I would also assume that all other sponsorship's for in game advertising would be hiked through the roof which will go directly to CSEC.

Seems like a definitive drop in the bucket for sure as Nenshi stated. CSEC has definitely kicked themselves in the butt by stooping to this low. I hope they come crawling back to the table after realizing they can't possibly release their offer without looking like complete jerks.

Will the increase not be mostly due to the ticket tax though?

[Makarov]

Originally Posted by Bent Wookie

Maybe I'm out to lunch here, but isn't there some risk taken by the CSEG over the course of those 35 years? I mean it seems to be that the city is guaranteed their money back but like any business, couldn't the CSEG face all those risks associated with running a sports franchise? They may make money, they may not.

Isn't that called "running a sports franchise"?

[Hot_Flatus]

Originally Posted by nik-

I think when you see how this plays out, you'll be incredibly happy if it stays at just a 25% increase. Before the ticket tax.

It will likely be closer to 50%.

I would like to see a poll of how many exisiting STHs will be dropping out once they see the bill for their new seats in a new arena.

[nik-]

https://www.coppernblue.com/2015/7/2...s-rexall-place

Some perspective from an Oilers STH on the new prices.

[nfotiu]

Originally Posted by Table 5

Interesting that the Flames wanted to ensure that the Saddledome was demolished...it makes sense as you don't really need the competition around (although we may need that Saddledome for the Olympics!). But I agree if that's CSEC demand, then it's part of the math.

It does hilight though why don't really want to own an arena in the first place...you're the one left holding a pretty expensive bag at the end of it's life cycle.

Yeah, the business of sports has become so broken. 600 million dollars for an asset that you expect to be worth negative 25 million in 30 years. What private entity would ever make that investment?

One day the continent is going to take notice and wonder why this is all necessary and if it really has any benefit to the public or even fans.

[Barnes]

Waiting for someone at work so I had a few minutes to whip this up.

[GordonBlue]

Originally Posted by Hockeyguy15

Will the increase not be mostly due to the ticket tax though?

god no. there will be a huge increase and then the ticket tax on top of it.
you have a new rink you'll have to pay for the "enhanced entertainment experience"

[calgarygeologist]

Originally Posted by Otto-matic

It just feels like the CSEG was set on CalgaryNEXT and now they're just throwing a massive adult temper tantrum about not getting that arena. The city seems 100% reasonable with the offer and its a melon scratcher why the Flames came out this week.

Yeah, I think their plan with CalgaryNext had a lot more revenue upside in the future with additional development that CSEC would own and sell. With the cities proposal they get arena revenue but little else.

[Hot_Flatus]

Originally Posted by Hockeyguy15

Will the increase not be mostly due to the ticket tax though?

Why would you assume that? The Flames are making it crystal clear they are a business and every new building has come along with new prices. Look at what Oiler fans had to pay last year and into the playoffs. This was not a coincidence.

If I were a STH I would be budgeting double what i'm currently paying when this building opens (or if it ever does).

[Par]

Originally Posted by sureLoss

If you carefully examine that deal, it is a bad deal for the Flames.

The City own the Saadledome, so including demolition cost is just bogus(the Saddledome is the responsibility of city.) So they should be responsible for the demolition costs anyways.

The $30 Million for the land is a alright deal but that land would need to be developed anyways in the future.

The city gets it's money back in property taxes.

This is a bad deal for the Flames, it is no wonder that the Flames walked away. The Flames should just wait 2-3 years for the new arena, by that time the oil prices will go up and the economy will be better and the city may make a bid at the Olympics.

[Hockeyguy15]

Originally Posted by Hot_Flatus

Why would you assume that? The Flames are making it crystal clear they are a business and every new building has come along with new prices. Look at what Oiler fans had to pay last year and into the playoffs. This was not a coincidence.

If I were a STH I would be budgeting double what i'm currently paying when this building opens (or if it ever does).

I assumed nothing. I was asking a question, hence the ?.

Let's say ticket prices go up 50%, how much of that will likely be ticket tax and how much will be profit?

[Parallex]

Originally Posted by Hockeyguy15

But if the revenue projections are so high, and the property tax is a drop in the bucket wouldn't the city be able to rent it for more than they could collect on property tax?

Yes they could, and in an ideal world that would be the simple ideal solution... City builds and owns the facility and charges an appropriate amount of rent to recoup it's investment over the life of the facility. No property tax, no User Fees, no other accounting shannagons.

The Flames don't want that though. They want the city to take a loss so that city loss can end up in their pockets, they don't want to pay taxes, and they want as much revenue coming in the side door as they can (so they can pay the players less by converting what would be HRR dollars to non-HRR dollars.

[Flame On]

Why are the indirect costs being included? Is that part of the City's 1/3?

I mean the city wants an entertainment district there, and presumably any 17th ave. extensions and green line station and infrastructure improvements, they'd have to do anyway, so they're passing that off to the Flames part of the deal and then saying "hey look at this as part of the Flames invoice and by the way we want all that money back as part of property tax reimbursement"?

Or am I getting that wrong or something??

[calf]

Originally Posted by Par

If you carefully examine that deal, it is a bad deal for the Flames.

The City own the Saadledome, so including demolition cost is just bogus(the Saddledome is the responsibility of city.) So they should be responsible for the demolition costs anyways.

The $30 Million for the land is a alright deal but that land would need to be developed anyways in the future.

The city gets it's money back in property taxes.

This is a bad deal for the Flames, it is no wonder that the Flames walked away. The Flames should just wait 2-3 years for the new arena, by that time the oil prices will go up and the economy will be better and the city may make a bid at the Olympics.

But they keep everything else from operating it. And demanded that the dome is demolished/unusable for competing events. The city could use the dome as an extra olympic venue, stampede events/competitions, etc.

[nik-]

Originally Posted by Par

If you carefully examine that deal, it is a bad deal for the Flames.

The City own the Saadledome, so including demolition cost is just bogus(the Saddledome is the responsibility of city.) So they should be responsible for the demolition costs anyways.

The $30 Million for the land is a alright deal but that land would need to be developed anyways in the future.

The city gets it's money back in property taxes.

This is a bad deal for the Flames, it is no wonder that the Flames walked away. The Flames should just wait 2-3 years for the new arena, by that time the oil prices will go up and the economy will be better and the city may make a bid at the Olympics.

There are two options for who owns the arena with money recouping plans for both, and the Flames demanded the demolition of the Dome as part of the deal.

[sureLoss]

Dave Dormer @Dave_Dormer
.@NHLFlames officials tell @CBCCalgary they watched the press conference by @nenshi and will provide a response later today.