Flames 'New' Arena II - 'No it's yours, I insist'

Lunatik

Normal is an illusion.
Oct 12, 2012
56,183
8,337
Padded Room
Seems to me like you all agree with one another, and there is just a semantic misunderstanding about what "100% of all revenue" means. Costs and revenue are separate, are they not?

Some of the revenue goes to costs (part of which is rent), sure, but none of it goes directly to the landowner. Everyone agrees with that, right?
Yes, you are right. those "operating costs" are expenses, money coming in is revenue. It's like they are mistaking revenue for profit
 

Flames Fanatic

Mediocre
Aug 14, 2008
13,329
2,888
Cochrane
Those costs and have nothing to do with revenue, in fact they are the complete opposite of revenue.

Here is an example of what he means.

Say you rent out a space to a to a company that does trade shows, but during the week things are slow so they host conventions there for extra revenue, would you get a percentage of that new revenue stream.

The answer is no.

That's not what I was addressing.

That being said, there absolutely are leases that if profit or revenue hits certain milestones the rent goes up, OR rents where part of it is percentage of profit/revenue. If those are common on arenas however, I could not tell you.
 

InfinityIggy

Zagidulin's Dad
Jan 30, 2011
36,068
12,852
59.6097709,16.5425901
Those costs and have nothing to do with revenue, in fact they are the complete opposite of revenue.

Here is an example of what he means.

Say you rent out a space to a to a company that does trade shows, but during the week things are slow so they host conventions there for extra revenue, would you get a percentage of that new revenue stream.

The answer is no.
Bull.

If your example was at all comparable, you might have a point. Alas it is not.

I've worked with concert promoters before and you can be damn well sure that that the venue operators (owners) take a portion of ticket revenue.

This isn't the same as renting a table at a trade show.
 

Lunatik

Normal is an illusion.
Oct 12, 2012
56,183
8,337
Padded Room
Bull.

If your example was at all comparable, you might have a point. Alas it is not.

I've worked with concert promoters before and you can be damn well sure that that the venue operators (owners) take a portion of ticket revenue.

This isn't the same as renting a table at a trade show.
I didn't compare it to renting out a table, I compared it to renting out the whole space for a different event.

Also the venue operators and the owners aren't always the same. The Flames currently operate the venue and likely would a new arena too.
 

Spitfire94

Registered User
May 22, 2018
5
0
Calgary AB
If the city was merely following reasonable industry standards, then the Flames owners wouldn't have had a problem agreeing with the arena proposal. Based on what the owners have said publicly it's clear that the city's demands were so exorbitant that the owners had no interest in negotiating at all anymore, which is alarming for all of us.

I can respect that the city wants the best deal for it's taxpayers, but they need to ease up on the negotiating or we'll all end up without a NHL team in Calgary to cheer for. It's happened in other cities before, and I think we all want to avoid that situation in Calgary.
 

Anglesmith

Setting up the play?
Sep 17, 2012
46,442
14,717
Victoria
If the city was merely following reasonable industry standards, then the Flames owners wouldn't have had a problem agreeing with the arena proposal.

That's disingenuous. The New York Islanders just made an arena deal involving $1B paid by their ownership group. Meanwhile, the city of Edmonton eventually bent over backwards to build an arena for the team, who only had to pay $19.7M out of their pockets. What is industry standard when cases vary so wildly?

Based on what the owners have said publicly it's clear that the city's demands were so exorbitant that the owners had no interest in negotiating at all anymore, which is alarming for all of us.

I can respect that the city wants the best deal for it's taxpayers, but they need to ease up on the negotiating or we'll all end up without a NHL team in Calgary to cheer for. It's happened in other cities before, and I think we all want to avoid that situation in Calgary.

I mean, it's been a transparent process, so you don't need to act as though the city's blustering reaction is our only source of information on what the details of the deal were. We know it wasn't anything ridiculous, and we also know that several times, the team's statements have been ridiculous. In addition, while they claim to have no interest in negotiating, they keep poking the media with things like how they're now a revenue-sharing recipient because they don't have that new luxury box coin. Also, all of their statements claim that the city is the one with no interest in negotiating (which is clearly false); they never claim to be disinterested themselves. At the end of the day, everything they have done to this point and are currently doing is a negotiation tactic. They want a bad deal for the city and are prepared to wait and apply pressure to see if they can get it.
 

Lunatik

Normal is an illusion.
Oct 12, 2012
56,183
8,337
Padded Room
That's disingenuous. The New York Islanders just made an arena deal involving $1B paid by their ownership group. Meanwhile, the city of Edmonton eventually bent over backwards to build an arena for the team, who only had to pay $19.7M out of their pockets. What is industry standard when cases vary so wildly?



I mean, it's been a transparent process, so you don't need to act as though the city's blustering reaction is our only source of information on what the details of the deal were. We know it wasn't anything ridiculous, and we also know that several times, the team's statements have been ridiculous. In addition, while they claim to have no interest in negotiating, they keep poking the media with things like how they're now a revenue-sharing recipient because they don't have that new luxury box coin. Also, all of their statements claim that the city is the one with no interest in negotiating (which is clearly false); they never claim to be disinterested themselves. At the end of the day, everything they have done to this point and are currently doing is a negotiation tactic. They want a bad deal for the city and are prepared to wait and apply pressure to see if they can get it.
I'm not so sure everything is as transparent as both sides are trying to make it seem, I don't trust either side in that regard
 
  • Like
Reactions: InfinityIggy

Frank Booze

Registered User
Apr 28, 2018
8
4
"But a tenant should not be receiving 100% of all revenue generated from a facility they do not own."

Why not? If I'm running a business out of a building that I'm renting, why should the landlord be entitled to any of the revenue I make on top of the rent? That doesn't happen in any other business circumstances, why should it happen in this circumstance?

The amount of money the Flames are willing to pay in rent is pitiful. It is $125 million for 35 years, which breaks down to $3.57 million dollars per year. So if the cost of the arena is $500 million, and $125 million is covered through rent and $150 through a ticket tax/user fee, the city has no way of recovering the remaining $225 million according to the Flames' proposal. And this doesn't even factor in all of the infrastructure upgrades necessary to provide access to the facility. And what about all of the interest on the loans the city would need?

So if the Flames are unwilling to pay a sufficient amount of rent, then the city should be entitled to receive money from other sources of revenue to pay this $225 million off. This includes

1. Revenue from selling the naming rights of the new arena to either Rogers or Scotiabank. Why should the Flames get the naming rights to a building they don't own?

2. Advertising revenue.

3. Parking revenue.

I'm not suggesting the city make a profit off of a new arena. All I want is for the city to be made whole, to get back what they put in. That way the money I am paying in property tax is going towards maintaining infrastructure and services in our city. And I don't care how the Flames spin it, a new arena is not public infrastructure. I have to pay a premium price just to gain access to the arena in the first place. At least with a new library, I can walk in for free and sign out books with a free library card.

If the city was merely following reasonable industry standards, then the Flames owners wouldn't have had a problem agreeing with the arena proposal. Based on what the owners have said publicly it's clear that the city's demands were so exorbitant that the owners had no interest in negotiating at all anymore, which is alarming for all of us.

I can respect that the city wants the best deal for it's taxpayers, but they need to ease up on the negotiating or we'll all end up without a NHL team in Calgary to cheer for. It's happened in other cities before, and I think we all want to avoid that situation in Calgary.

There has been nothing unreasonable with the city's proposal (although they could probably gift the land to the Flames for free, and the Saddledome demolition should not be part of the costs for the new facility). They just want back what they put in. The Flames keep saying they need a public-private partnership. This isn't a partnership. A partnership would share in the financial benefits. Could you imagine if the Flames approached a company like Amazon with their proposal, where Amazon would take the place of the City of Calgary? What do you think Amazon would tell the Flames?

As for the Flames moving, I find this to be unlikely. Even with the Flames operating in the Scotiabank "not economically viable" Saddledome, there are too many other franchises in the NHL that are in far worse positions. The owner of the Arizona Coyotes and Gary Bettman have been saying for years now that "the NHL cannot continue to operate in the city of Glendale", but they keep having to sign new leases in Glendale because the Coyotes have nowhere else to go.

Maybe if the league contracted by about 10 teams, the threat of relocation would actually be a possibility. And even in the worse case scenario the Flames did move, I am willing to accept that if it means we are one of the few cities in North America to stand up against the outrageous demands of sports teams owners.

I recommend to anyone to check out Field of Schemes | sports stadium news and analysis if you want to read more about how much trouble cities can get into with these arena/stadium deals, and how much money sports owners are making at the expense of these cities. It's sickening.
 

Spitfire94

Registered User
May 22, 2018
5
0
Calgary AB
The amount of money the Flames are willing to pay in rent is pitiful. It is $125 million for 35 years, which breaks down to $3.57 million dollars per year. So if the cost of the arena is $500 million, and $125 million is covered through rent and $150 through a ticket tax/user fee, the city has no way of recovering the remaining $225 million according to the Flames' proposal. And this doesn't even factor in all of the infrastructure upgrades necessary to provide access to the facility. And what about all of the interest on the loans the city would need?

So if the Flames are unwilling to pay a sufficient amount of rent, then the city should be entitled to receive money from other sources of revenue to pay this $225 million off. This includes

1. Revenue from selling the naming rights of the new arena to either Rogers or Scotiabank. Why should the Flames get the naming rights to a building they don't own?

2. Advertising revenue.

3. Parking revenue.

I'm not suggesting the city make a profit off of a new arena. All I want is for the city to be made whole, to get back what they put in. That way the money I am paying in property tax is going towards maintaining infrastructure and services in our city. And I don't care how the Flames spin it, a new arena is not public infrastructure. I have to pay a premium price just to gain access to the arena in the first place. At least with a new library, I can walk in for free and sign out books with a free library card.



There has been nothing unreasonable with the city's proposal (although they could probably gift the land to the Flames for free, and the Saddledome demolition should not be part of the costs for the new facility). They just want back what they put in. The Flames keep saying they need a public-private partnership. This isn't a partnership. A partnership would share in the financial benefits. Could you imagine if the Flames approached a company like Amazon with their proposal, where Amazon would take the place of the City of Calgary? What do you think Amazon would tell the Flames?

As for the Flames moving, I find this to be unlikely. Even with the Flames operating in the Scotiabank "not economically viable" Saddledome, there are too many other franchises in the NHL that are in far worse positions. The owner of the Arizona Coyotes and Gary Bettman have been saying for years now that "the NHL cannot continue to operate in the city of Glendale", but they keep having to sign new leases in Glendale because the Coyotes have nowhere else to go.

Maybe if the league contracted by about 10 teams, the threat of relocation would actually be a possibility. And even in the worse case scenario the Flames did move, I am willing to accept that if it means we are one of the few cities in North America to stand up against the outrageous demands of sports teams owners.

I recommend to anyone to check out Field of Schemes | sports stadium news and analysis if you want to read more about how much trouble cities can get into with these arena/stadium deals, and how much money sports owners are making at the expense of these cities. It's sickening.

I don't know about you, but $3.57 million dollars per year seems pretty reasonable to rent out a hockey rink (especially if they paid for most of the cost to build the facility). And when you said an arena is not public infrastructure because it's not free like the library? Last I checked you still had to buy a library card. The C-train is public infrastructure too, but you still need to pay for a bus pass. There are many cases of publicly owned operations that you still need to pay to use. Nothing is free, even when the government provides it.

The Saddledome is enjoyed by more than just hockey fans, it's a multi-use building. A new arena would be the same. Also with the enormous tax revenue that the Flames raise for the city, I don't think anyone should have a problem with the city investing in them. The bottom line is, the Flames multitude of tax dollars have helped build schools and pave roads for decades now. They've contributed enormously to the city, so it's fair that the city contributes back in some capacity, especially when the facility is enjoyed by the public at large.

You might be okay with the Flames walking, so you can pat yourself on the back and say "Well, at least we didn't let those greedy sports teams owners walk all over us", but I'd much prefer to keep the Flames in town. There are still markets they could move to; Houston and Quebec City are the 2 names that come up the most. If the city doesn't want to help build the arena, there will be some other city that will gladly help build a facility if it meant a pro hockey team will be moving into it. In some cases there are already cities with arenas built that are just waiting to jump on the opportunity.

I don't see the owners as caricatures of greedy fat billionaires with their feet up on their desk smoking cigars and stroking their stomachs, I see them as parts of our communities who contribute and provide us with entertainment that millions enjoy. I want to see them stay in the city, and all they want is a fair deal. I hope that deal can be made so we can all continue to enjoy NHL hockey for many more years to come.
 

1989

Registered User
Aug 3, 2010
10,361
3,865
I don't know about you, but $3.57 million dollars per year seems pretty reasonable to rent out a hockey rink (especially if they paid for most of the cost to build the facility). And when you said an arena is not public infrastructure because it's not free like the library? Last I checked you still had to buy a library card. The C-train is public infrastructure too, but you still need to pay for a bus pass. There are many cases of publicly owned operations that you still need to pay to use. Nothing is free, even when the government provides it.
It's great that you brought up those two entities in particular because here are some facts for you, friend:

The Calgary Public Library is free to use for all basic features (card sign-ups, rentals, computer usage, printing) and that the downtown section of the C-Train line is completely free to use from City Hall to 7th Street stations - arguably the highest-traffic usage area in the city, especially during normal weekday office hours - accessible to the public at no cost.

In comparison: there are only two places a patron seeking to enter the Saddledome legally and for free can do so: the West Lobby which houses Ticketmaster booths where you can purchase tickets for an upcoming game/event, and a Fanattic where you can purchase Calgary sports merchandise; and the Concierge northeast entrance, where again, you can buy Ticketmaster tickets. You cannot access the Saddledome otherwise without an appointment or without paying to get in for an event. If that isn't an example of "not public infrastructure" I do not know what to tell you.

The Saddledome is enjoyed by more than just hockey fans, it's a multi-use building. A new arena would be the same. Also with the enormous tax revenue that the Flames raise for the city, I don't think anyone should have a problem with the city investing in them. The bottom line is, the Flames multitude of tax dollars have helped build schools and pave roads for decades now. They've contributed enormously to the city, so it's fair that the city contributes back in some capacity, especially when the facility is enjoyed by the public at large.

It's a multi-use building? Aside from the annual student events, it runs two types of events: shows (for-profit celebrity presentations such as stand-up comedy or concerts) or sports, which take up the majority usage. It's a very narrow definition of multi-use, especially with very little actual public access - you pay or you don't get in. Additionally, while it's an easy point to concede that the Saddledome's tax contributions have likely contributed to some public projects, another issue moving forward would be that the Flames have brought up that they are seeking to no longer have to pay property taxes in future - a privilege that no other private enterprise I know of would enjoy in Calgary.

I don't see the owners as caricatures of greedy fat billionaires with their feet up on their desk smoking cigars and stroking their stomachs, I see them as parts of our communities who contribute and provide us with entertainment that millions enjoy. I want to see them stay in the city, and all they want is a fair deal. I hope that deal can be made so we can all continue to enjoy NHL hockey for many more years to come.

To be honest, I'm not sure if you've met them at all. I have met members of the ownership several times over in public and private meetings. You are right; they are not caricatures of sleazy business tycoons, but they are frugal personalities - a "fair deal" in their eyes rests on the money they save and the PR team that helps spin their contributions into a positive for the community. That being said, I do generally believe they want the Flames to remain in Calgary, but egos on both sides have spoken too much and done too little; the damaged relationship that remains means there is fragile grounds for cooperation, especially since the municipal election fiasco.
 
Last edited:
  • Like
Reactions: InfinityIggy

Frank Booze

Registered User
Apr 28, 2018
8
4
I don't know about you, but $3.57 million dollars per year seems pretty reasonable to rent out a hockey rink (especially if they paid for most of the cost to build the facility). And when you said an arena is not public infrastructure because it's not free like the library? Last I checked you still had to buy a library card. The C-train is public infrastructure too, but you still need to pay for a bus pass. There are many cases of publicly owned operations that you still need to pay to use. Nothing is free, even when the government provides it.

The Saddledome is enjoyed by more than just hockey fans, it's a multi-use building. A new arena would be the same. Also with the enormous tax revenue that the Flames raise for the city, I don't think anyone should have a problem with the city investing in them. The bottom line is, the Flames multitude of tax dollars have helped build schools and pave roads for decades now. They've contributed enormously to the city, so it's fair that the city contributes back in some capacity, especially when the facility is enjoyed by the public at large.

You might be okay with the Flames walking, so you can pat yourself on the back and say "Well, at least we didn't let those greedy sports teams owners walk all over us", but I'd much prefer to keep the Flames in town. There are still markets they could move to; Houston and Quebec City are the 2 names that come up the most. If the city doesn't want to help build the arena, there will be some other city that will gladly help build a facility if it meant a pro hockey team will be moving into it. In some cases there are already cities with arenas built that are just waiting to jump on the opportunity.

I don't see the owners as caricatures of greedy fat billionaires with their feet up on their desk smoking cigars and stroking their stomachs, I see them as parts of our communities who contribute and provide us with entertainment that millions enjoy. I want to see them stay in the city, and all they want is a fair deal. I hope that deal can be made so we can all continue to enjoy NHL hockey for many more years to come.

Okay, I have a bit of a lengthy response here. I'll try to address a bunch of your points one at a time.

1. $3.57 million a year seems like a lot of money, but not relative to the total cost of the arena. If the new arena is $500 million and a user fee covers $150 million, $350 million still needs to be covered. $125 million would be an upfront rent payment from the Flames, which only covers 36% of that $350 million. So the Flames pay 36% of the cost and get 100% of all revenue. How exactly is that a partnership?

2. With the exception of the free LRT zone, indeed you need to pay to use the C-Train. However, the city also gets revenue from C-train ticket sales. With this new arena, they get absolutely nothing. And yes, nothing is free. But I would rather pay property tax so that I can get a free library card, as opposed to paying property tax for an arena that is not accessible to the public without paying a fortune to get in. The least the Flames could provide would be a citizen's luxury suite, where there is a random draw per event for a few citizens to get in for free. Instead there will be an owner's luxury suite for Murray Edwards to use, despite the fact he won't be the owner of the facility.

3. How has the city made any money at all from the Flames from taxes? The Flames don't pay any property tax on the Saddledome because the city owns it. In fact, and correct me if I am wrong, the Flames pay $1 in rent per year to the city in rent to use the Saddledome. And as Signature pointed out, the Flames won't be paying any property tax on the new arena (because they insist on not owning the facility for this very reason). The Flames will of course argue that the surrounding area will become revitalized because of the new arena, and the city will collect property tax from anyone who builds there. I'm not convinced a new arena will revitalize the surrounding area (ie. see current area surrounding Saddledome), and even if it did, that collected property tax would have to be used to pay off the new arena. So again, the city is getting absolutely nothing out of this.

4. I don't want the Flames to move. But I also cannot accept the Flames getting the same deal Katz got with the Oilers. Part of me is also starting to wonder what the future of professional sports is going to look like. More and more, it seems as though people would rather just watch sports from the comfort of their homes, as opposed to the annoyance of getting down to an arena and paying a fortune to watch a game. I just don't see future generations of kids interested in this.

5. Yes, Quebec City and Houston keep getting brought up, but they are just being used by owners to threaten sports fans into handing over more tax dollars to stay put. The Panthers, Canes and Coyotes are all in significantly worse positions than the Flames. Perhaps if the Panthers moved to Quebec City and the Coyotes to Houston then maybe I start to take these threats more seriously. But the Flames pay $1 in rent per year. You think the owners of those facilities in Quebec City and Houston are going to allow that? Not a chance.

6. I don't feel as though I am unreasonable with my perception of sports owners. I'm not of the mindset that "Murray Edwards is a multi-billionaire, therefore he should should just pay for the whole thing", because that would be a terrible financial decision. But if you are asking for the city to help pay for the cost of arena, they need to share in the financial benefits. Again, the city needs to be made whole, otherwise they are going to have to cut services to pay for the new arena (read about this on the Field of Schemes website. Some US cities have had to shut down hospitals because of some of the ridiculous arena/stadium deals they agreed to).

7. The Flames provide entertainment to us, but at an outrageous cost. The only thing a new arena is going to do is make it even more impossible for low to middle income earners to afford due to (a) a ticket tax (b) less upper bowl seating and more lower bowl seating (c) increased ticket prices that accompany new arenas and (d) an increase in their property tax bills

You say that Flames want a fair deal. Why is the 1/3 Flames, 1/3 City, 1/3 Users model unfair?
 

scoringmachine

Registered User
Jan 17, 2007
911
30
I do not follow the talk of the Arena very much but when I hear talk I liked the idea when the Flames proposed to build a arena with a football and soccer stadium next to it. The Flames owners could pay 75% to 85% of the cost then have the city pay the rest. Then when hockey, football and soccer season is done the city can use the Arena any way they want and the profit they get can be spent how the city wants. That seems fair and it could help our Olympic bid
 

Anglesmith

Setting up the play?
Sep 17, 2012
46,442
14,717
Victoria
But the Flames said they were done?

Honestly, why does Ken King still have a job. He is literally 100% useless.
The Flames didn't say that, so this is an odd time to start ranting. The Flames released a statement last month after certain councillors mentioned that this could be happening, and they basically said "yeah, we'll wait and see before we assume this changes anything." Certainly it was a negative response at a point in time where it was an opportunity for more positive response, but it wasn't rejection or anything like that.
 

InfinityIggy

Zagidulin's Dad
Jan 30, 2011
36,068
12,852
59.6097709,16.5425901
The Flames didn't say that, so this is an odd time to start ranting. The Flames released a statement last month after certain councillors mentioned that this could be happening, and they basically said "yeah, we'll wait and see before we assume this changes anything." Certainly it was a negative response at a point in time where it was an opportunity for more positive response, but it wasn't rejection or anything like that.

We’ve sent a strong signal today that says we have a strong contingent on council that wants to have a conversation."

A Flames spokesman said the team had no comment.

Shocking, I know.
 

JPeeper

Hail Satan!
Jan 4, 2015
11,531
8,635
The Flames didn't say that, so this is an odd time to start ranting. The Flames released a statement last month after certain councillors mentioned that this could be happening, and they basically said "yeah, we'll wait and see before we assume this changes anything." Certainly it was a negative response at a point in time where it was an opportunity for more positive response, but it wasn't rejection or anything like that.

They said previously they were done (it's a tactic I know).

Ken King adds nothing to these negotiations, he has already failed. There is no reason to keep him, there is no goodwill or trust or anything left.
 

Lunatik

Normal is an illusion.
Oct 12, 2012
56,183
8,337
Padded Room
They said previously they were done (it's a tactic I know).

Ken King adds nothing to these negotiations, he has already failed. There is no reason to keep him, there is no goodwill or trust or anything left.
Clearly it was done until something changes, it's called playing hardball
 

Mobiandi

Registered User
Jan 17, 2015
20,844
17,200
The Flames need to bring fresh faces to the negotiations like the city is doing. Ken King has worn out his welcome on the arena front. Didn't he say an arena was on the way back in 2007 or something?
 

Frank Booze

Registered User
Apr 28, 2018
8
4
The Flames need to bring fresh faces to the negotiations like the city is doing. Ken King has worn out his welcome on the arena front. Didn't he say an arena was on the way back in 2007 or something?

It's impossible to know what was going on back in 2007 regarding a new arena, but I guarantee that everything changed once Daryl Katz robbed the city of Edmonton with that horrible, horrible arena deal. At that point the Flames realized "Wow, we can get a city to completely pay for an arena for us? And we can collect 100% of all revenue generated from the arena? And the only thing we have to pay for is a tiny amount of rent?".

And yes, I don't want to see Ken King speak ever again. It really bothers me that the city has to take the initiative to restart these talks despite the fact the Flames walked away from the table. It makes it seem like the city "was in the wrong" and has to try and make things better. I would have preferred for the city to just have waited.
 

Ad

Upcoming events

Ad

Ad

-->