Arena negotiation discussion. UPD: Flames release their proposal

[topfiverecords]

Originally Posted by GirlySports

The city proposal is not fair but it's been a PR disaster for the Flames. Ken King is not entirely wrong but they did not need that press conference to rub it in our faces. A press release saying we will respond next week would have sufficed.

I wouldn't want the City proposal right now to be deemed by all as fair. Then when they both move to the middle to agree on a deal, the City ends up in a worse position.

Hope the final deal for the City is fair (and fine if it's fair for CSEC too) but not anything before the deal is closed.

[cal_guy]

Originally Posted by CliffFletcher

I thought it was a given that sports teams are not good investments. They're ego vehicles for the mega-rich who are willing to give up some small fraction of their staggering fortunes to have have a really cool toy to play, and enjoy enormous prestige in the community.

But what do I know. I admit I find it impossible to put myself in the shoes of people who have far more wealth than they could ever spend, their children could every spend, their grandchildren could ever spend, and yet still avidly pursue greater and greater wealth. Buying the stadium outright would not cause the owners or their children or grandchildren any conceivable hardship. And yet it's unthinkable to them.

Here's one of the better takes on it.

http://www.slate.com/blogs/moneybox/..._a_return.html

[NiklasSundblad]

Originally Posted by djsFlames

What's with King pausing and smiling in the middle of every point he makes? Is that supposed to make people sympathize more with the crap he says? Seems especially ill timed prior to making a condescending remark toward the other side.

Starting to think that's actually him trying to hide the fact that he's crapping his pants.

[NiklasSundblad]

Originally Posted by Locke

Yes. It does appear that, apart from Edmonton, the days of the 'Sweetheart Arena Deal' seem to be nearing their end. Maybe they should have hopped on that Gravy-Train before it was pulling in to the end of the line.

Well, their designated representative (King) took his sweet time. That is evidently going to cost them....


In the end, the Flames want free money.

They couldnt have possibly asked at a worse time.

King first mentioned a new arena to the media in 2007. In 2014, 7 years later, the bottom fell out of the oil market, then a year later, with the city in an economic tailspin, he presents something that clearly had no more than a few weeks of work put into it.

Ken King claimed to be talking to architects and construction firms in 2009:

http://calgaryherald.com/news/local-...edmonton-arena

The most amazing thing is that no one in the media covering this has even casually suggested that maybe Ken King shouldn't have his job. Imagine what he could have gotten away with with 100 dollar oil and Bronconier.

[NiklasSundblad]

Originally Posted by Ducay

This is precisely the "layman" approach I am talking about. Its not about billionaires wanting to pay as little as possible (well, yes it is) but it is all about returns. If M.Edwards could get 15% return on the 1/3 deal, he'd be all over it. Heck, I'd imagine just to be the "good guy" or get the project moving, he'd take a deal that gets him a return equal to some kind of personal WACC or a low risk investment. Sure, they could be holding out for a return higher than they should, but they've set their return at a certain level and are holding out for something in that range.

These guys have more money than they will ever need and the bad press isn't worth it if they were really trying to get insanely greedy. They live for the reputation at this point.

So yes, they have enough money to fund it, but why would they if they are going to earn peanuts on their investment? Can't blame them if they could use that same money to get better returns invested elsewhere.

Sorry, you're talking out of your ass. The Flames won't open their books to the city they're trying to extract money from (successfully, might I add.) You have absolutely no insight into their actual financial position except for what Ken King is saying, and he is saying that if the city gives them 155 million dollars, in cash and services, but they are forced to pay taxes on their building that they are paying for 120% of the cost of the arena. How anybody can hear a statement like that and then say Ken King is doing a "bang up" job articulating ANYTHING to the public is truly bind boggling. The guy cant even getting a freaking jersey right.

[calgaryblood]

Just a thought, is it possible Edwards doesn't actually want a new arena and this is just a way to lay blame on the city?

Maybe he really is actually content with the saddledome?

[GordonBlue]

Originally Posted by calgaryblood

Just a thought, is it possible Edwards doesn't actually want a new arena and this is just a way to lay blame on the city?

Maybe he really is actually content with the saddledome?

not a chance.
too much money to be made with a new arena for anyone owning the flames to be happy with the saddledome.

flames owners just played their cards badly.

[taxbuster]

Originally Posted by smiggy77

Agreed that the wording KK used was poor, but it's a legitimate point.

To a diehard fan, maybe they look at the price as $200 plus $20 ticket tax for the new arena. To the general consumer, They're paying $220 for the ticket, simple as that.

If $200 is the tipping point for maximizing sales, the Flames have to drop their price down to $180 to accommodate the $20 cuz the fee won't change (unless it is a percentage based, but still a percentage that the Flames do not take, but need to account for when pricing).

One thing people are forgetting is that at the same time, the Flames will need to come up with their $185mil also, primarily from ticket revenue as well, requiring them to have to bump up their price. If the tipping point is still the $200 to sell the ticket, they will have to cut their share of the price, hence reducing their revenue.

This of it like this. Property tax goes up for a local downtown restaurant. Carbon tax get's implemented as well. The restaurant have two options to absorb this increase, either by reducing their revenue or by increasing the price of their food.

If their food gets too expensive and people decide they don't want to eat there anymore, they'll lose revenue. If they drop their price too much, they won't make money or even won't be able to cover their cost and make no margin on their business. The diehards may accept the extra charges because they really like the food the restaurant is spitting out, but unfortunately, the restaurant needs to plan to what the general consumer would pay for, not for the few that will pay the premium.

All well and true. Now consider how "regular businesses" (read: not run by billionaire, arrogant businesspeople) work:

Let's take a restaurant that has a nice dinner, plus drinks for $60. Fair price, decent food. Now, along comes GST and adds $3 to that. On top of that, the restaurant is paying property taxes (the Flames don't wanna do that), business taxes (nope, not that either), has the cost of all of the equipment and premises (the Flames only want to support some of that - 1/3 to be precise), they need to provide parking perhaps (or the customer has to pay, which adds to the cost), for which they receive no revenue (if M Edwards and co. don't want that non-HRR I'd be surprised), get no concessions from the City for transportation to their venue etc etc etc.

How different, when you look at "normal" businesses eh?

So what makes the Flames special in the business sense?

(Don't get me wrong: I *love* my team. It's the ownership that is seriously starting to tee me off. If it's such a bad deal, why don't they sell? (Hint: they're making money hand over fist -either by gain in value or direct annual income.)

[Mongo]

Lets get creative:
-City submits in their Amazon Head Office proposal that they will build a brand new arena that comes with "Amazon Arena" naming rights for 25 years, free of charge, as part of the bid to lure their HQ to Calgary (hmm....nickname 'the Jungle'???
-Meanwhile, City takes all the cash in tax incentives they were going to throw at Amazon and instead plunks it into the new arena which appeases the Flames
-Win-win...Amazon comes here with their 50,000 jobs and we all start lighting cigars with $100 bills again
Hurray!
*what colour text do I use for sarcasm*
*for all I know this has already been mentioned in the 72 previous pages but I haven't followed/read everything*

If Nenshi gets re-elected...I think the Flames have to replace KK...too much ill will between these two to get something done IMO

[EldrickOnIce]

I generally don't find the Beaverton funny, but did enjoy this:

Calgary- After walking away from negotiations with the Calgary city council earlier this week the NHL has publicly threatened to move the Vancouver Canucks to Calgary if the city does not foot at least half the bill for a new stadium.

“When you want a city to over-invest in a facility that only benefits one private business, you have to play hard ball,” said league commissioner Gary Bettman. “The one thing Calgary would hate more than the Flames leaving town is the Canucks coming to town.”

https://www.thebeaverton.com/2017/09...d-new-stadium/

[Da_Chief]

I like the Amazon naming rights to lure them here.

Arena - Amazon Arena
City Hall - Amazon City Hall
Zoo - Amazon Jungle
Stampede - Amazon Wild Stampede
Field Center - Amazon Field of Hope
Stephen Avenue - Amazon Avenue
Bow River - Amazon River
Peach Bridge - Amazon Bridge

Lastly

City of Calgary - City of Amazin' Amazon

[EldrickOnIce]

^ should try to work Prime into a few of the titles

[MoneyGuy]

Rename the teams the Calgary Hockey Amazonians and the Calgary Football Amazonians.

[Lanny_McDonald]

Originally Posted by calgaryblood

Just a thought, is it possible Edwards doesn't actually want a new arena and this is just a way to lay blame on the city?

Maybe he really is actually content with the saddledome?

Maybe Edwards doesn't really like Calgary? Maybe Edwards has found new meaning in London? Maybe he would like to divest himself of all his properties in Calgary and just call it a day?

Wouldn't that shake the city to its foundation?

I think we need to see the Flames proposal to the city before we start mass panic. I think we all know they want a full entertainment district, as that was core to their original presentation. I suspect this will still be core to their proposal, or at least give them an avenue toward achieving that goal. I still contend this is about executing Nenshi's vision, or the Flames vision. We will likely find out in the next 48-72 hours what that looks like. Then we can start the panic.

[Ozy_Flame]

Originally Posted by EldrickOnIce

^ should try to work Prime into a few of the titles

New Cancer Centre Prime

[DFO]

Can anyone provide a summary of the current terms the Flames have with the City/arena?

Besides rent & property taxes is the city currently subsidizing the CPS presence at games?

[GirlySports]

Originally Posted by New Era

Maybe Edwards doesn't really like Calgary? Maybe Edwards has found new meaning in London? Maybe he would like to divest himself of all his properties in Calgary and just call it a day?

Wouldn't that shake the city to its foundation?

Edwards would just sell the team then. Why get an arena for someone else?

[Lanny_McDonald]

Originally Posted by Makarov

Alright, but I sure hope that myth of the brilliant business minds of Murray Edwards, Ken King et al dies at the end of this debacle. The Winnipeg Jets organization has made it a viable business in Winnipeg with a completely private arena, one half the population, less disposable income, and maybe one quarter the corporate sponsorship budgets. I may be a layman but, based on the foregoing, I don't accept that many in the Flames organization are "experts".

I wish you would quit trying to forward the fallacy that the MTS Centre in Winnipeg was 100% funded with private money. It was not. The government kicked in 30% of the cost of the arena, and did so to build an undersized, under-serviced arena - by NHL standards. The only reason they Jets are making a go of it, is because of the deep pockets of True North. We'll see how long True North will put up with that money pit.

Here's a good article reviewing the public funding of arenas and stadiums around the country. I wish they had spoke to the privately funded arenas, and how only one of them did not lead to the demise of the owners and forcing sales of the teams and buildings in question.

http://calgaryherald.com/news/local-...h-public-funds

[Lanny_McDonald]

Originally Posted by GirlySports

Edwards would just sell the team then. Why get an arena for someone else?

Seriously? You didn't read the snark in that?

As I said, lets see what the Flames proposal is. Full disclosure will allow us to see just how much oil we'll need for the torches, and just how many pitchforks we need to supply the ugly mob.

(The above was more snark. I don't think we need to provide oil for torches or pitchforks to the angry mob. They'll bring their own.)

[GGG]

Originally Posted by DFO

Can anyone provide a summary of the current terms the Flames have with the City/arena?

Besides rent & property taxes is the city currently subsidizing the CPS presence at games?

I believe it is $1 per year rent plus a million dollars to charity.
Not sure about CPS