Corporate Welfare

Discussion in 'The Business of Hockey' started by gr8haluschak, Feb 21, 2005.

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  1. gr8haluschak

    gr8haluschak Registered User

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    After seeing this comment in an Edmonton Oilers reply I have to propse this question (it is a nice break from actual strike threads):

    Why in Canada do we have such a problem subsidizing NHL teams. As much as it pains a lot of you to hear this - hockey is a business first and a game second and we have no problem throwing money to companies like Air Canada or Bombardier but yet the second an NHL team is involved " oh no I don't want my tax dollars going to help millionaires". This corporate welfare happens every day (and yes the companies that get the most help are the ones that also have millionaire owners as well) but yet it is taboo to help these business people.
     
  2. mr gib

    mr gib Registered User

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    the interesting thing in alberta is - and maybe some fans out there can pipe up - where's the oil money? -
     
  3. J-D

    J-D Registered User

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    I don't want my government to subsidize even more with my taxes.
     
  4. OilerFan4Life

    OilerFan4Life Registered User

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    Hotchkiss took it all :D

    In all honesty, I'm not qualified to answer this question.
     
  5. Phanuthier*

    Phanuthier* Guest

    Good question gr8haluschak.

    Back in 1999 (or was it 2000?) during the "Save our Flames" campaign, Harley Hotchkiss worked along side the Edmonton Oilers Govoner (can't remember name) to get tax breaks from the Canadian government.

    Under their campaign, they presented the government with for tax breaks. In their proposal, they presented a number of benefits a NHL team has on city's reputation and economy. Things such as the income it brings in, the people it brings, its effect on the community, teams that travel in and out, ect. Their proposal passed senate for a ~3.5 million $ tax break for all Canadian teams - however, it was met with harsh response. The general "why support their milionair players and owners" raised hell, and many thought the money could be better well spent - not realizing the loss the city and country would recieve should the teams (Flames, Oilers, Sens) not survive in Canada. Within 4 days, the offer was pulled off the table.

    The general perception between the NHL and companies like Air Canada ect is that the NHL is a game. It's entertainment, its glamour, and its about making rich people richer. There seems to be some sort of odour that major league sports has on people that the general population doesn't have on big companies. There's no real reason for it, but I'll guess that it has something to do with the fact that we hear about companies like Air Canada et al in our every day newscast that it somehow is granted immunity to their screwups and bad business deals. Major league sports, on the other hand, has a different perception of us that makes us automatically think of negative thoughts when millionair owners and players start bickering and asking for more money.
     
  6. mr gib

    mr gib Registered User

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    i've heard over the year's that the - oil community - has not - stepped up - as it were - hotchkiss is oil eh = must check it out - thanks
     
  7. Phanuthier*

    Phanuthier* Guest

    I went in depth into this back on the Oilers board a few months ago, so I'll give a short summary.

    First off, when you think "oil money" your talking Calgary, not Edmonton. Edmonton has their 31 some odd owners where none of them really stick out as big businessman - its surprising to see that many Edmonton Oiler players make more then their boss's, a rarety in any industyr.

    With Calgary, you have 6 (formerly 7) wealthy owners who have ownership over Oil and Gas industries, Oil Sands and other various projects, pharmacy ect. However, dispite that fact that almost any one of these owners could make the Toronto Maple Leafs squeel like a little girl, they remain fisically responsible as they have little interest of loosign a boatload of money (in general, I believe they lose 6-7 million a season besides last year where they made a little money becasue of the playoff run and the red mile). So ownership income is not a problem - revenue, on the other hand, is another thing.

    (To try and keep this short, let's stick to coperate sponsership and not things like TV contract et al, which the Leafs are loaded with.)

    I'm sure many already know what kind of city Calgary is. Its wealth, fastest growing city in Canada, big oil and gas companies ect... outside of small towns like Rocky Mountain House, possibly the richest city per person in Canada. I can't remember the magazine (Times?) but I believe Calgary lead the country in the richest 100 men of the country, and 3 in the top 10 - 2 of which own the Flames.

    "Coperate Calgary" could probably do one of the best jobs any NHL city in North America could do. However, the general conception is that former President and CEO of the Flames Ron Bremner pissed off alot of fans and companies with his poor business dealings (kind of like Pocklington with the Oilers), coupled with the unpopular move from the Correl to the Saddledome. This drove alot of fans away from the NHL and companies off from doing business with the Flames. In 2001 (I believe, if someone wants to check) the Flames made the first step and replaced Ron Bremner with Ken King, a popular man among the Calgary community, a man with a strong resume and a long time member of the "friends of the Flames" club. When he first came into the Flames organization, King realized the situations and recongized that he had to go back to these companies and plead for them back. This wasn't easily, considering the (eventual) 7 year drought. With piss poor quality, a city torn apart from their team (thanks to Ron Bremner) this wasn't easily. However, the first step may have come in the 2004 playoffs, when it seemed like for the first time, the city was embrassing the Flames. It was evident that the fans were coming back, so its my assumption that with the Flames recent success and a man like Ken King working the Flames, the city of Calgary, its fans and corperate Calgary just might be willing to embrace the Flames once again.

    Lets hope the lockout didn't kick the Flames in the balls too hard...
     
  8. Bicycle Repairman

    Bicycle Repairman Registered User

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    Huh?

    The Flames moved from the Corral to the Saddledome in 1983. Ron Bremner was still in BC running a TV station back then.

    I think you mean the Saddledome renovations of 1994. That was done with federal government money.
     
  9. Phanuthier*

    Phanuthier* Guest

    I stand corrected.

    (It's late...)
     
  10. KallioWeHardlyKnewYe

    KallioWeHardlyKnewYe Blue Jacket's Curse

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    Do cities in Canada have the authority/ability to dole out tax incentives? Does it have to be by the national government?

    I live in Columbus, Ohio and the city council here fairly routinely gives tax breaks to companies that are moving to or expanding operations in the city. They seem to work well as a development tool. The company saves a little on property taxes, but the city gains from income taxes on the new or additional employees.

    I did some research and I don't believe an incentive was granted to the developers of Nationwide Arena, but the city has given incentives to companies and businesses that wanted to move into the arena district, with the thinking being that they'll make the area much more attractive and draw more money to the city in tourism, taxes, etc.
     
  11. arnie

    arnie Registered User

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    The government does subsidize Canadian NHL teams. It gives tax write offs to corporations who buy tickets, which indirectly subsidizes the teams.

    But the real answers to your question are

    1. International competition. When they give money to Bombardier, they are expecting that they will sell trains all over the world and bring money into Canada. Given money to Canadian NHL teams simply redistributes the money that is already in Canada.

    2. If Bombardier or Air Canada goes belly up, 50,000 people will become unemployed. If the Oilers go belly up, restaurants around ther arena might be hurt and employees laid off, but the same money will get spent in other restaurants in Edmonton or environs who will then hire employees. so there is no net economic effect.
     

  12. The problem with hockey is that it doesn't create a lot of good paying jobs.
    It's great for some small businesses in the service industry, but outside of the small business owners, few people are making a very good living on it. It's mostly waiters/waitresses/
    These jobs are important.
    But these kinds of jobs can also be found all over the place.
    A job at Bobadier tends to pay a good, middleclass wages. There are benefits/pensions etc. These are the jobs that make politicians stand up and notice.

    If you ask me, the US has its priorities mixed up. It's somehow okay for taxpayers to finance an arena for some rich dude. But, oh, don't let the taxpayers get involved with health care!
    Our city deserves a pro-sports team, and an our taxpayers can afford it (or the tourists). But they don't deserve decent schools and police protection
     
  13. Hoek

    Hoek 001

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    Agreed. It's hard to stop that trend now that all the cities in America are on board with this nonsense though. Owners can just threaten to go somewhere with some desperate city willing to foot the bill. :/
     
  14. looooob

    looooob Registered User

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    yeah Hotchkiss has been too busy doing stuff like this

    http://www.ucalgary.ca/news/oct04/brain-institute.html

    then to 'step up'

    its kind of sad, every time a Flames owner makes a major donation like this (and sure there are tax implications)...Flames fans start saying "why doesn't he spend that money on a few players?" as if every discretionary dollar these guys has should go into hockey players instead of pesky things like medical research
     
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