Ken King; Flames Ownership no longer pursuing new arena in Calgary

[Ace101]

It's okay guys...everyone knows that NHL makes all of it's money below the 49th parallel. All the 7 teams in Canada are on welfare and just subsist because of how kind Uncle Gary is with us Canadians.

Lets just ignore that 3 of the top 10 teams NOT receiving revenue share are in Canada and that those 3 teams on their own contribute about as much in revenue sharing as the other 7 teams.

2 of the 3 biggest money makers are Canadian teams (and those top 3 make at least the double of team #4).

Doesn't Canada have 4 Toronto, Montreal, Vancouver, and Edmonton. With Calgary sitting just outside at 11th.

 

[blueandgoldguy]

When Forbes numbers come out soon - based on the previous season - I would not at all be surprised to see Edmonton in the 9 - 12 spot for overall revenues. Combine a new arena and all the revenue it entails with 2 rounds of playoff revenues in 2017 and we should see a significant bump of at least $20 million in revenues from the previous Forbes estimate. This would be my guess. A bump in the Canadian dollar to .90 US would probably place Edmonton in the top 8 or 9 NHL teams for revenue.

 

[Bixby Snyder]

I assume you're being sarcastic. If Gary had his way he'd move each and every Canadian franchise to each and every available southern US desert.

I don't know why - it's probably just one of his weird things.

If only such a thing were true. The fact is Gary bends over backwards for what the Canadian hockey oligarchy wants.

 

[powerstuck]

I assume you're being sarcastic. If Gary had his way he'd move each and every Canadian franchise to each and every available southern US desert.

I don't know why - it's probably just one of his weird things.

Yes and no...consensus (among non Canadians) is all Canadian teams should be in the US. Canada doesn't belong in any pro-sports because we're either cold and small, or too big of fans.

Doesn't Canada have 4 Toronto, Montreal, Vancouver, and Edmonton. With Calgary sitting just outside at 11th.

Most likely yes, official numbers are from 2015-16 season, so that's why Oilers were not in it, but yes both Oilers and Flames were on the verge...heck all Canadian teams were in top 16 per total revenues.

 

[SunDancer]

Flames just can't pick up and leave town.

I believe the rules within the league requires to flames owners to try to sell the team to another party that would keep the team in Calgary. If they can't find one, then they can with the approval of the league go and find another city to play in.

However, you also have to look at the cities that are available and ask if the flames are going to be better off in that city. Assuming that the flames not for sale, its a move with the Calgary owners.

Seattle, a group is willing to spend $650 million to redo key arena. They aren't going to be handing over the keys to the revenue streams to a hockey team. Plus they want an NBA team.

Portland, Houston have NBA teams where the NBA team owner controls the revenues of the building. So, the flames will be a tenant.

KC, they operate profitably without a pro team. So it has to make sense for them to let the flames in.

It's a different story if the flams are for sale and the rockets new owner wants to buy them. Paul Allen, don't think he is interested as he has not bid for an expansion team in the past 2 rounds.

Is this true? If that's the case, then who would pay more for the franchise? Someone who would keep the team in Calgary or one of the potential owners in Seattle, Houston, etc?

 

[powerstuck]

Is this true? If that's the case, then who would pay more for the franchise? Someone who would keep the team in Calgary or one of the potential owners in Seattle, Houston, etc?

In theory, an outsider will always pay more because the league applies the ''relocation fee''.

But I say in theory because the relocation fees have only been applied when teams came from US to Canada and never the other way around.

 

[Bruins1233]

Doesn't Canada have 4 Toronto, Montreal, Vancouver, and Edmonton. With Calgary sitting just outside at 11th.

Well Toronto and Montreal are well below the 49th parallel.

 

[SunDancer]

In theory, an outsider will always pay more because the league applies the ''relocation fee''.

But I say in theory because the relocation fees have only been applied when teams came from US to Canada and never the other way around.

If they allowed the Flames to move without a relocation fee, it would set a dangerous precedent. You would see other owners, like Karmanos or Barroway, looking for the same treatment and explore options outside their markets.

 

[Killion]

In theory, an outsider will always pay more because the league applies the ''relocation fee''.

But I say in theory because the relocation fees have only been applied when teams came from US to Canada and never the other way around.

Ya, this is a tricky question though ps.... the old Colorado Rockies paid an "Indemnification Fee" to the Rangers, Islanders & Flyers for infringing on their broadcast regions though I dont believe they paid an actual "Relocation Fee", also... it was nearly 40yrs ago. Things change. Whats seemingly forgotten is that TNSE had budgeted $170M to buy the Coyotes, the amount the NHL had into them, and had they bought the Coyotes there would not have been a "Relocation Fee" over & above that amount.

What happened was that ASG initially demanded they receive the same asking price in full from TNSE, Bettman inserting himself in the process negotiating them down however he did ask Chipman & Thomson to up their ante' beyond $170M which was met with a complete refusal to do so along with some very nasty threats. Bettman then whittling ASG down to $110M with the $60M of the $170M budgeted & agreed to as the sticker price for the Coyotes determined to be / agreed that it would be paid and called a "Relocation Fee"..... Yet no "valuation" of the Winnipeg market was ever done. The League had not previously assessed the situation, declared "this market is worth X amount". Bettman was flying by the seat of his pants and in desperate straights.

He carved out $60M from the $170M price tag that TNSE had previously agreed to pay for the Coyotes, and in doing so at the time looked like a bit of a Hero I'm sure to the other 29 teams even if their shares of that $$$ was chicken feed in the scheme of things. However..... he/they absolutely shot themselves in the foot as overnight the Jets02 were once theyd landed in Winnipeg worth a Hell of a lot more than the bargain basement price of $170M even with that bogus $60M in Relo Fee's. Had they done a "proper valuation" of the market (Winnipeg) they would have & should have known that.

 

[Killion]

If they allowed the Flames to move without a relocation fee, it would set a dangerous precedent. You would see other owners, like Karmanos or Barroway, looking for the same treatment and explore options outside their markets.

Yeah I'm not so sure I agree with this theory SunDancer. If hypothetically speaking Karmano's (I'll get to Barroway in a minute) rather than selling to interests elsewhere (Quebec, Seattle or Houston) retained ownership & moved with the team himself lock, stock & barrel.... then no, I dont think he'd be paying a Relo Fee for doing so. If he was infringing on another teams territorial rights, geographical & or broadcast, then he would be assessed an Indemnification Fee. Thats not a problem, not a Fee he'd be looking at if he moved the Canes to QC, Seattle or Houston. If he moved back to Hartford, to Milwaukee or Hamilton Ontario, then absolutely, he'd be looking at having to pay Indemnification Fee's. Of course the NHL BOG's would have to approve the move; suitable arena, market they wanna be in & so on but as its an "insider", existing owner, different set of rules, policies & procedures.

If were talking outright Sale with Relocation, whereby Karmano's in demanding $500M for the club where is as is & no takers at that price, maybe received offers in the $300M range, he could force the NHL's hand in refusing to take a $200M haircut when the new (wholly artificial) benchmark is now $500M for an NHL club. If he sells to a local for $300M rather than selling out of State (possibly country) not only does he not maximize his ROI & profit but that $300M drags down the average league-wide valuation of each team beyond the top 12-15, numbers 15-31. So lets say QC, Houston or Seattle interests are willing to pay PK $500M, all 3 of them essentially "bidding against one another" this where I'd see the NHL stepping in whereby Karmano's gets his full $500M however over & above that "how much more are you willing to pay Quebec, Houston & Seattle"? The NHL getting its pound of flesh in the tens of millions & then call that a "Relo Fee". $50M? $100M? $150M?. $200M?

Alternately, they could just waive any "Relo Fee" whatsoever, its a market they badly wanna be in, decent ownership group with whom they want to work so no "bidding" on a Relo Fee, inside track, fix in. QC, Houston or Seattle pays Karmanos $500M & thats it. No Relo Fee though the NHL might claim publicly that there was, make it up, fun with numbers (see the Tampa & Panther transactions for eg). Hyper-inflate valuations, overstate amounts paid etc.... Finally as for Arizona & Barroway, for me to theorize on that situation, how a sale & or relocation transpires, following the $$$, Man..... thats a wall of text. That vehicle, franchise is so far off-road it makes the Baja 1000 look like a Sunday Drive. The NHL I believe still very much large & in-charge, that franchise merely in park, tourists. It will be moved and I mean out of State not 20 miles east & into a brand new taxpayer funded arena. Likely Houston. Very likely Barroway "goes with" while securing one or more minority partners, either local Houston money or whatever, and no, there certainly wont be any Relo Fee attached to that move though the NHL might claim so and in doing so... lying. Business as usual.

 

[Melrose Munch]

So are the Flames the front runners for Houston or the Coyotes?

 

[MuzikMachine]

So are the Flames the front runners for Houston or the Coyotes?

Maybe the more apt question would be which city is the Flames going to use to threaten the city of Calgary; Houston, Seattle, or Quebec City?

 

[JuniorNelson]

Calgary is just negotiating. They want tax money.

 

[Mike Jones]

Maybe the more apt question would be which city is the Flames going to use to threaten the city of Calgary; Houston, Seattle, or Quebec City?

Burke has already used Quebec City. Maybe Seattle this time? Maybe that would work.

 

[Mike Jones]

Calgary is just negotiating. They want tax money.

From what the candidates heard when they campaigned for the most recent civic election here I'm not sure the Flames are going to get as much as they want. Local media may be working hard to change our opinions but most Calgarians would be extremely hesitant to give the Flames the blank cheque that will line ownership's pockets.

 

[powerstuck]

Maybe the more apt question would be which city is the Flames going to use to threaten the city of Calgary; Houston, Seattle, or Quebec City?

Quebec won't work because of the conference imbalance issues. But all of the others are good candidates.

 

[Ciao]

According to the 2016 Forbes report, the Flames had an operating income of $18 million US. How is this so low? Meanwhile, the Coyotes lost $8 million US with one of the lower payrolls and far greater subsidies.

I would enjoy seeing the Flames creep back through the door they purported to shut.

Calgary is an excellent market. They would be foolish to leave.

 

[SunDancer]

Yeah I'm not so sure I agree with this theory SunDancer. If hypothetically speaking Karmano's (I'll get to Barroway in a minute) rather than selling to interests elsewhere (Quebec, Seattle or Houston) retained ownership & moved with the team himself lock, stock & barrel.... then no, I dont think he'd be paying a Relo Fee for doing so. If he was infringing on another teams territorial rights, geographical & or broadcast, then he would be assessed an Indemnification Fee. Thats not a problem, not a Fee he'd be looking at if he moved the Canes to QC, Seattle or Houston. If he moved back to Hartford, to Milwaukee or Hamilton Ontario, then absolutely, he'd be looking at having to pay Indemnification Fee's. Of course the NHL BOG's would have to approve the move; suitable arena, market they wanna be in & so on but as its an "insider", existing owner, different set of rules, policies & procedures.

If were talking outright Sale with Relocation, whereby Karmano's in demanding $500M for the club where is as is & no takers at that price, maybe received offers in the $300M range, he could force the NHL's hand in refusing to take a $200M haircut when the new (wholly artificial) benchmark is now $500M for an NHL club. If he sells to a local for $300M rather than selling out of State (possibly country) not only does he not maximize his ROI & profit but that $300M drags down the average league-wide valuation of each team beyond the top 12-15, numbers 15-31. So lets say QC, Houston or Seattle interests are willing to pay PK $500M, all 3 of them essentially "bidding against one another" this where I'd see the NHL stepping in whereby Karmano's gets his full $500M however over & above that "how much more are you willing to pay Quebec, Houston & Seattle"? The NHL getting its pound of flesh in the tens of millions & then call that a "Relo Fee". $50M? $100M? $150M?. $200M?

Alternately, they could just waive any "Relo Fee" whatsoever, its a market they badly wanna be in, decent ownership group with whom they want to work so no "bidding" on a Relo Fee, inside track, fix in. QC, Houston or Seattle pays Karmanos $500M & thats it. No Relo Fee though the NHL might claim publicly that there was, make it up, fun with numbers (see the Tampa & Panther transactions for eg). Hyper-inflate valuations, overstate amounts paid etc.... Finally as for Arizona & Barroway, for me to theorize on that situation, how a sale & or relocation transpires, following the $$$, Man..... thats a wall of text. That vehicle, franchise is so far off-road it makes the Baja 1000 look like a Sunday Drive. The NHL I believe still very much large & in-charge, that franchise merely in park, tourists. It will be moved and I mean out of State not 20 miles east & into a brand new taxpayer funded arena. Likely Houston. Very likely Barroway "goes with" while securing one or more minority partners, either local Houston money or whatever, and no, there certainly wont be any Relo Fee attached to that move though the NHL might claim so and in doing so... lying. Business as usual.

All I'm saying is that if Edwards is allowed to sell the Flames to a group in Seattle and the NHL waives the relocation fee to facilitate the sale, then I imagine Fertitta in Houston would expect the same if he decided to pursue a purchase of the Canes or Coyotes.

Not going to happen. If the Flames are not a business Edwards wants to operate in Calgary then a sale to a local buyer would follow .... and he'd be a fool to sell before securing a new arena.

 

[Mike Jones]

All I'm saying is thatifE dwardss is allowedd Edwards is allowed to sell the

All I'm saying is that if Edwards is allowed to sell the Flames to a group in Seattle and the NHL waives the relocation to facilitate the sale, then I imagine Fertitta in Houston would expect the same if he decided to pursue a purchase of the Canes or Coyotes.

Not going to happen. If the Flames are not a business Edwards wants to operate in Calgary then a sale to a local buyer would follow. .

Seattle is awfully close to Vancouver. Would the league waive a relocation fee if the transitioning franchise moves that close to an existing franchise?

 

[Killion]

Seattle is awfully close to Vancouver. Would the league waive a relocation fee if the transitioning franchise moves that close to an existing franchise?

I think you might be thinking more "indemnification fee"?. Infringement on geographical & broadcast territory?.... because if so, no, Seattles' far enough away that they couldnt pin that one on them. What they could do or what might transpire is lets say the Flames, Coyotes or whomever are sold outright to Seattle interests for $400M. The NHL might whack a $100M Relo Fee on that in order to maintain the $500M minimum threshold franchise valuation. Alternatively, and this is where it would get murky, is lets say King of Alberta or Barroway of Arizona "move with" the franchise as was the case with Norm Green & Minnesota some 25+ years ago.... sell a minority or even majority share in the club to Seattle ownership, then all bets are off as to whether or not any Relo Fee applied. Theres like 2 separate policies here; one for existing owners, another for outsiders inbound with new markets when looking at Relocations. We really dont have a lot to go on in terms of precedent beyond Atlanta-Winnipeg & that deal was so convoluted that the $60M paid by TNSE on top of the $110M they paid for the team was not based on any "market valuation" of anykind. It was what they had agreed to pay for the Coyotes, had budgeted.

 

[CorbeauNoir]

Not going to happen. If the Flames are not a business Edwards wants to operate in Calgary then a sale to a local buyer would follow. .

The problem is, if the exit strategy is to hold out in the Saddledome until they start running a loss and then dump the team overnight a la QC, who is going to be that local buyer willing to pick up a team in the red when the city at large is trending the way it is? There are multiple levels of government hellbent on turning us into the next Rust Belt - at least one of which seems likely to be locked into power for the next decade or so - and companies are finding it easier to simply pack up and go elsewhere rather than deal with the stacked layers of red tape. The only concrete alternative to keep the city's longterm economic prospects afloat seems to lie in hoping and praying Amazon decides against all logistical common sense and picks Calgary for HQ2.

I see the prospects of selling to a local buyer getting worse with time, not better. I was prepared to call their bluff when the expansion/alignment situation was working against it but Houston opening up as a second American option changes a lot of things.

 

[Mike Jones]

I think you might be thinking more "indemnification fee"?.

That's the word! Thanks Killion. And great response to my question - It answers a lot of my questions.

 

[PatrikOverAuston]

The problem is, if the exit strategy is to hold out in the Saddledome until they start running a loss and then dump the team overnight a la QC, who is going to be that local buyer willing to pick up a team in the red when the city at large is trending the way it is? There are multiple levels of government hellbent on turning us into the next Rust Belt - at least one of which seems likely to be locked into power for the next decade or so - and companies are finding it easier to simply pack up and go elsewhere rather than deal with the stacked layers of red tape.

Bang on. People seem to think they can continue to elect parties and politicians hostile to private enterprise without consequence. Hint: it's the folks with the money who decide where they'll spend it, not the government.

The only concrete alternative to keep the city's longterm economic prospects afloat seems to lie in hoping and praying Amazon decides against all logistical common sense and picks Calgary for HQ2.

Which is doubly hilarious. "See how hard we make it for businesses to succeed? Why wouldn't you want to be here?!"

I see the prospects of selling to a local buyer getting worse with time, not better. I was prepared to call their bluff when the expansion/alignment situation was working against it but Houston opening up as a second American option changes a lot of things.

Especially given that the Flames ownership group runs in the same circles as Houston's would-be buyers. They're all oil guys going back decades. No question in my mind the topic's come up.

Does anyone doubt that a major city would pass up the chance to buy a ready-made pro sports team for, say, $600M ($500M base + $100M relocation fee)? You have none of the pain associated with an expansion franchise and all the gain.

If not Texas, some aspiring NHL market would pony up. It's an incredible opportunity.

 

[muddywaters]

This about covers it ...

 

[SunDancer]

Bettman was throwing some shade at Calgary yesterday saying the Flames have been "spectacularly unsuccessful in reaching an agreement with the city". You know he's serious when his head is bobbling and his hands are shaking.

https://finance.yahoo.com/news/nhl-...ding-stadiums-taxpayer-dollars-211157389.html