Nenshi, city council respond to Flames pulling out of arena negotiations

Buckle up, gang, because it sure sounds like the negotiations between the City of Calgary and the Calgary Flames regarding a new home for the hockey club are going to get worse before they get better. After Flames president Ken King announced that the club was stepping away from negotiations, Calgary mayor Naheed Nenshi and city council made a move of their own.

First, council voted 8-4 to release negotiation details between the City and the Flames, effectively taking their in-camera talks out into the open. Nenshi then spoke to the media, confirming a handful of aspects of the negotiations that were (to this point) speculated upon.

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The arena price tag was confirmed to be around $550 million and the three-way split reported by the Globe and Mail between the City, Flames and a ticket tax confirmed as “mostly accurate.” The City’s contribution would be a loan, and the comments sure make it seem like Metro Calgary’s report about the loan repayment mechanisms being the sticking point is fairly accurate as well. At $550 million for the new building, that would be approximately $183 million from the City, $183 million from the Flames and $183 million from a ticket tax. (Our guess was only off by $50 million.)

The details on the City’s offer will be released “in coming days.” As for the prospect of reigniting negotiations, the mayor stuck to his guns.

“We remain at the table,” said Nenshi.

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  • Albertabeef

    That’s right. Awesome! Keep it up Mr Mayor! Best mayor in

    Calgary since Ralphy! :). Ken King and ownership tarnished all my optimism for the season. Might have well have traded Johnny and Chucky for a bags of pucks the way I feel right now.

  • Derzie

    In any sane world, this is more than fair. City, owners and fans contribute an equal share. Fans get entertained, Flames keep all the profit, city gets it’s investment back over time. Could not be better.

      • McRib

        This is a great deal and to be honest Victoria Park is the absolute best location anyone has proposed. I frankly don’t want anything to do with a combined Hockey, Football complex (not that I don’t want a new Football stadium) the footprint would just be too large to be taking up valueabke downtown real estate .

        The absolute best part of this is the two other mayor candidates don’t support publicly funded arena (Bill Smith doesn’t know what he supports), but the other candidate is vehemently against it because he knows in today’s society, it’s a deal breaker for getting elected.

    • dontcryWOLF

      Nenshi recently repayed the tax payers that money ($300 000). Something he didn’t need to do. That showed some class. Say what you want about his job as a mayor, but that showed a level of principle rarely seen in business or politics.

      • Newbietwo

        You mean because he had to get a lawyer for a demfamation suit because he chose to diss a key business member in Calgary he is the mayor of?

        And you know what even if that was not the case pure fact is he would never understand my needs a citizen because he will never relate to it..

        • Avalain

          That may very well be true, newbietwo, but from how you talk with this whole thing lately you sound like your needs as a citizen are the needs of the top 5%. I’m not saying that is a bad thing, but it’s not necessarily accurate for the average person.

  • Parallex

    Ken King: *Runs into room hyperventilating* Mu, Mu, Murray! Mr. Edwards!
    Murray Edwards: Yes Ken what is it?
    Ken King: It’s the City Sir!
    Murray Edwards: Calm down man, what about the City?
    Ken King: Sir… th-th-they expect to be paid back!
    Murray Edwards: *Faints*

    • Hockeyfan6778

      Haha I can totally see that now.

      I like that loan idea. Seems like the city is putting in a fair attempt to get this done. And fair enough if flames don’t agree but negotiate civilly this was a tasteless antic by king

      • cberg

        Let’s see. The Flames put up 1/3 of the costs from their own money, the Flames put up another 1/3 of the money which the city loans to them, to be repaid, and the final 1/3 gets put up via the Flames customers via higher prices. So the Flames put up all of the costs/risks, the city gets the facilities at no risk and their contribution is acting as a banker with a repayable loan. Have I got that right?

        • BendingCorners

          The owners want all the revenue so yes the owners absorb all the risk and pay all the costs. A sweetheart loan at a low interest rate lowers their costs. Putting the team up as collateral eliminates the biggest risk for the city. All good.

  • SeethingRed

    The hang up is who will have access to the facility when the Flames are not using it…..if the answer is the public…then the City needs to eat some of the bill.

  • Thatz Nuckin Futz

    This is a dance. Seems every sports town goes thru it at some point in their lifetime. The mayor doesn’t want to fleeced by the absentee billionaire owner. The ownership group pleads poverty and hints at relocation. Time for patience everybody. They’ll figure it out despite all this fawning for the cameras. I just wish Bettman would stay away or at least take more of a neutral stance. I realize he’s bought and paid for by the owners but the City of Calgary has been a stalwart franchise for 30+ years and Gary should respect that instead of acting like a mafia lawyer.

  • Parallex

    Quite the power move by City Council. The transparency vote I mean, one would think that if it was remotely possible that CC would come out looking bad they wouldn’t vote to open.

    • Robear

      Yah I actually find it surprising that the Flames would take this tactic. It feels like they are completely deaf to the potential public backlash. I find the whole thing rather insulting. THey claim there was no political motivation – Yet this is during the mayoral election and immediately after Nenshi put out a video on his vision for the East Village including a new arena. They said they were willing to negotiate, yet they act like petulant children who arent getting what they want!

    • Skylardog

      Actually, the fact that the city is really contributing nothing (the loan must be repaid), and that fact that they voted to release the details of the negotiations publicly, suggests to me just how out of touch this council is. I am shocked at how little (nothing) the City is offering. Made my view of the Flames much brighter, and has tarnished my view of City Council.

      There is public benefit. Just the taxes on the player’s salaries is $37.5 million per season. Which begs the question, where is the Federal and Provincial contribution to this?

      • KKisTHEproblem

        Glad you are not running city finances. Loaning $183 Million of tax payer dollars (including many taxpayers who are not flames/hockey fans) is not nothing. Building does not get built without that contribution and there is always a chance of not getting repaid: its called default and it is a very real risk when lending money.

      • Parallex

        Aaaaaaand it turns out there was no loan. It would be a straight dollar contribution that the city would just redeem through property tax (like every other business).

  • BurningSensation

    “CSEC was apparently looking for property tax exemption and balked at models for the city to recoup its investment, including possible revenue sharing options.”

    In other words, ‘We really want an arena, but we don’t want to actually pay for it’.

    City Council agrees to foot a third of the bill, and to loan another third to the team, but apparently that isn’t good enough.

    And so everybody is clear, it is the Flames who have ceased negotiations, and it is the Flames who immediately threatened to move to Seattle.

    One side is negotiating in good faith. One side is not. Call their bluff, say ‘No’ to corporate welfare.

  • Tates

    I’m more worried about dinner next Thursday that any chance of the Flames moving.

    It’ll get done. The politicking will be amplified by social media and sudden experts.

    The municipal election will be impacted.

    But the Flames are not going anywhere.

    There’s a better chance Ken King sells to BT’s pops.

    • Jackal

      According to Forbes, Flames has revenue of $120million per year. That roughly works out to $167 x 41 x 17,500. So this $120M figure probably does not include TV revenue, marketing royalties, etc… The bottom revenue team, according to Forbes, has $99 million in revenue (Carolina).

      If the Flames move to another city, they probably lose $10 million a year on ticket sales, and another $10 million a year in local TV deals and marketing rights, etc. Thats $20 million a year the Flames would lose out on were they to move to another city. And that is assuming the Flames wouldnt have to pay any money for a new arena in this new city.

      So this $20 million per year is Calgary’s bargaining chip. If I was one of the Flames owners, this $20 million per year is probably worth $300 million to me. My bottom line would be to fork out $300 million to stay in Calgary. Therefore the city’s opening offer is not sufficient at this point. But this is just an opening offer and its a fair one. The gap is not that wide and I think we will live to see a new arena in Calgary soon.

      • Parallex

        That’s an erroneous assumption (that the Flames wouldnt have to pay any money for a arena in the new city) remember the Flames consider all the rent they’ll pay as part of their “contribution”. They aren’t going to get a rent free arena anywhere. Also don’t forget they’d need to pay a relocation fee. One last thing your talking about the next 15 years (300M/20) the cost of staying in Calgary are spread over twice that length.

      • cornwallroyals

        One thing to keep in mind is that the Flames new revenues would be in US$ (they’re not going anywhere in Canada) and that would quickly make up any shortfalls because their major cost of business (players salaries are in US$)

          • McRib

            “They’re not going anywhere in Canada”

            This is likely true, you don’t leave a market like Calgary (third most head offices in Canada) for Quebec City, but if the Flames move to the USA they are not going to get a publicly funded arena (especially in a more liberal Seattle), I have a ton of family in the USA, Americans are vehemently against publicly funded arenas now. The Miami Marlins was the deal that broke the camels back in the USA. Its not happening again, Murray Edwards & Co are literally two years too late for getting a sweetheart publicly funded arena deal in the USA or Canada (see Edmonton fiasco). The only thing that could happen is the private Seattle group would offer up that arena, but the Flames wouldn’t get full revenue and likely nothing towards concerts. Why would they leave Calgary for that when you consider they would have to pay a major fine for leaving and in a deacse once they have repaid the cities loan they would have full revenue for the arena in Calgary.

          • cornwallroyals

            My point is that if your income is in US$, your reported revenues will be higher because they do not have to be discounted because of a lower C$. Although it would be nice to see our dollar rise I would not want to be budgeting for a dollar that is much higher than it is at the moment.

          • WhoIsHomer

            What Edmonton fiasco are you referring too? The one where we got an amazing new arena as well as a surge in office towers being built in the surrounding area, including the tallest building in Canada outside of Toronto?

  • The Fall

    The owner will be leveraging a new rink to anchor a district that they can build condos around.

    So, the billionaire gets to develop more land; city gets larger tax base and thriving economy. What’s the issue..?!.

  • WilliPlett25

    First off, nice job Flames brass for sucking all the excitement from a promising year and the best roster this team has had in a few decades. Second, why are they are trying to hold taxpayers and die-hard hockey fans hostage in a bad economy? ‘Pay up losers, or we will so passively aggressively threaten to move this team.’ Why were the Flames not putting a solid plan together a decade ago when the Dome was not aging well? Now they expect taxpayers to pay millions b/c they lacked of a viable plan of their own? Yup, #greed. And what about McMahon Stadium … are they going to make the University and City pay for its replacement next year?

    • That's My Point

      This is the best roster in decades? The Oilers have better goals against with worse dmen last season! Another goalie experiment again this year? WTF? Major changes needed to this Flames team that gets swept by Ducks and Oilers in playoffs and regular season. A move to a new City could help with that.

      • Atomic Clown

        One. It was one year that we got swept by the oilers. First time in 8 f***in years you nitwit. It doesn’t help that the oilers have the best player since Crosby handed to them through luck. Maroon and Draisaitl had career years, and Talbot pulled off a Dominik hasek. Unless you think all three can perform just as well or better continuously, it was an aberration. Kind of like the flames cinderella run in 2015. I concede that Mike Smith is not a permanent solution, but he’s better than Elliot (more consistent numbers with one of the worst teams in the league). Your idiocy knows no bounds

  • Dean S

    Unreal, there are 31 teams in the NHL, the Scotiabank Saddledome seats 19,289. Thats the 5th largest arena in the NHL (includes new Little Ceasars Arena in Detroit @ 20,000). Saddledome is a GREAT atmosphere to watch hockey. I’ve been to 11 different NHL arenas, the Saddledome is a good venue. The main issue with the building is the roof design, many concerts bypass Calgary because of the load and clearance restrictions in the building (fewer concert dates, less revenue). The Roof design was the major screw up.
    Private boxes and suites are very nice, (tickets cost a LOT more too). So let me understand this? The Calgary Flames would like to build a new arena, since 19, 289 seats is not enough? (MTS in Winnipeg is one of my favorite buildings @ 15, 294, unreal atmosphere, feels like you can touch the ice). Makes sense to have more concerts but in the BIG picture regular fans (non box seats) will pay much more for their tickets for a similar product on the ice. How much did seat prices go up in Edmonton??

    • Avalain

      IIRC, the new stadium proposed had less seats, more box seats. Basically it catered to the rich more than before. That’s probably a smart business move, but my point is that they do feel like they have enough seats already.

  • cornwallroyals

    Basically, what the above reported offer is that the Flames would end up paying 2/3 of the cost with a ticket tax making up the other 1/3. Where is the City’s (taxpayer’s ) share in the cost? The flames can borrow money on the open market if they so choose, they don’t need to borrow from the city. If this is the way it were to end up, then the Flames could pick the location that would be most ideal for them.
    On another note, if the city is serious about the 2026 Olympics, who pays for the new arena then? You guessed it, the city would have to pony up a heck of a lot for a 2-1/2 week extravaganza. By waiting out the city, the Flames would then be putting themselves in a much stronger bargaining position. Let’s face it, the existing facility does have some life left in it but a new Olympic facility would certainly have to be in the works by the early 2020’s.
    One other possible solution to the present stalemate would be for the Flames to cover the cost for bike lanes coming from all 4 quadrants to the new rink. This ought to get Nenshi out of his little hissy fit.

  • Skylardog

    If I get this right, then the City is really contributing nothing. A repayable loan is not a contribution. I am sure the Flames could get a loan all by themselves.

    The question is what is the public benefit. It can take so many forms, but just a few are direct taxes from the Flames, indirect taxes from business and individuals that benefit by having the Flames in the city (restaurants, bars, taxis etc.) , civic pride, employment during construction, social benefit of a public meeting place, hotel taxes, airport taxes, utilization of public transit, charity (I will note that the Flames raised $400,000 for charity yesterday), it goes on and on. On the same note, why are the Alberta and Federal Governments not involved? The taxation of just the players salaries at the $75 Million cap is worth about $37.5 million per year. That number is $0 if the Flames move to a US city like Seattle. That can help with healthcare, bridges, roads and schools. A repayable loan from the city is not a contribution. There is public benefit, and we as a city, province and country should be putting in something. The question is how much?

    • Parallex

      No, the city is contributing 1/3. We’re making an investment not giving a gift.

      Think of it this way… in actuality the City is contributing 67% of the construction cost and will as a result receive revenue streams in the form of Rent (lease), User Fee (Ticket Tax), and a low interest loan payment (which constitutes CS&E’s 33%).

      • Skylardog

        No – it is a repayable loan. The city is contributing nothing.

        If it is an investment, as you say it is, then what is really happening is the city is not only getting an arena, not only getting a public meeting place, not only getting the spin off taxes from businesses, hotels taxes, airport taxes, use of public transportation, and everything else that spins off from the Flames being here, but also from financing the deal. In other words you are saying they are making money off the Flames for “allowing” the Flames to build an arena for the City’s benefit. It is worse for the Flames than I thought, now that you pointed that out to me.

        • Parallex

          That’s asinine. The city will be investing in a facility… they have every right to seek revenue streams from that investment equal to (and *gasp* even make a modest profit from that investment).

          Seriously it’s like some people think it’s not an investment unless the City of Calgary takes a loss.

    • dontcryWOLF88

      The city puts in plenty. They build the roads that get to the arena. The traffic lights at intersections. The transit that supports that system. They provide the police, ambulance, and fire services that are available in emergencies. They remove the garbage and clean and maintain the green spaces nearby. Thos are things cities do.

      What cities funds ought not to be for, I suggest, is corporate infrastructure. Every mayor of Calgary since since Ralph Klein said the same. Dialogue on this subject has changed over recent times as a matter of precedent. X city elsewhere pitched in for a sports arena, so we must too.

      • Kevin R

        I think Macleod Trail & traffic lights are older than the Dome. The games & concerts generate revenue & passengers for LRT that goes directly to the City. I believe people get charged for garbage removal as well, its not a City expense, it’s a service that is taxed to the users. The transit is a must for a City of 1.4 million whether you have a hockey team or not. Infrastructure is what brings head offices to your City, bring jobs & consumers & tax payers that make a City vibrant. We would have the LRT whether the Flames were here or not. Flames generate extra revenue for the LRT. For the life of me I have no idea what your point is here.

  • Rocky Mountain Blues

    I get a kick out of those who think the offer is such a fair deal with 1/3 from Flames, 1/3 from city and 1/3 from a tax. The only thing is, the City’s 1/3 is a loan, not a contribution. So the reality is 2/3 Flames, 1/3 tax, City $0. I understand and support the need to keep taxes as low as possible, however there are some things that a major city needs in order to attract new business and residents. I have been involved with commercial real estate in a number of Canadian cities and what those cities offer for amenities and quality of life has an impact on attracting business. Calgary seems to be good at funding the arts (which is important) but seem to seriously neglect the sport side of the equation even though that is just as important. The city will receive a substantial economic benefit from doing the new rink and stadium to replace McMahon if it is done right. That economic benefit as well as all the events that would come to Calgary as a result of having facilities on par with all the other major cities in North America would enhance the quality of life here as well as draw new economic activity. If no contribution from the city other than a loan is their best offer after a few years of negotiating then I understand the Flames position to withdraw. The flip side is that if you don’t upgrade and you do eventually lose the Flames, that will have a detrimental impact on the economy and quality of life, not only directly from the flames but also all the other events and business that would have been attracted to the city.

    • Parallex

      Why isn’t a loan a contribution?

      Seriously, it’s just a mechanism for the city to recoup it’s investment… if instead of loan payments the City got the rights to the parking revenue would that mean they didn’t “contribute”. If so your basically saying that the only way anyone can contribute is if they lose money on the deal.

        • Avalain

          So it can probably be said that the only ones who are paying are the public. The owners will absolutely get back every dollar that they put in, either through increased concert sales, increased prices, or the ticket tax.

        • Rocky Mountain Blues

          So Parallex, let’s go out to dinner at an expensive restaurant once a week for the next year. I will pay 1/2 and you can pay 1/2, only mine is just a loan that you have to pay me back at the end of the year. I originally paid 1/2 which seems fair but the reality is it will end up costing you 100% of the bills and me $0. We would both benefit from the deal since it we will both have great meals but I have a feeling you wouldn’t be pleased since you would end up paying all the price for some of the benefit while I would pay none of the price and still receive benefit from the transaction. I am betting you wouldn’t think that is as fair when you are the one being stuck with the bill instead of the Flames.

          • Rocky Mountain Blues

            Parallex, you said “This metaphor fails because to make it analogous to the arena only one of us gets to eat those meals.” I think you are the first person I have heard who believes there is no benefit to the City by having these facilities. There can be legitimate differences in belief of how much benefit would be for the city but the fact that there is economic benefit to the city is a proven. So the analogy is correct as their is benefit to both parties.

        • X Man

          I don’t understand how you think it’s ok for the Flames owners to get their money back in the form of profits, but it’s not ok for the city to get theirs back too?

          • Rocky Mountain Blues

            Looking at the amount each party is putting into the arena with the latest proposal, we see the Flames put in 2/3 of the price (1/3 up front and 1/3 a loan from the City that they pay back.) 1/3 will come from users of the facility through an entertainment tax and the net amount the city is $0. I am fine with the city making money off what it gives to the project, heck if their latest proposal went through I think they should make $1,000,000 for every dollar they put in – that means $1,000,000 X $0= $0. The reality is that there is and has been a significant financial benefit to the City of Calgary from the Flames and related spin offs. Whether the City of Calgary ever puts any money in a new arena or not they will have a financial benefit for as long as the Flames are in Calgary. As I said before, I understand the need to keep taxes low and support wise fiscal decisions but the City will get a huge benefit from this, I don’t think it is too much to ask that they actually put something into it.

          • Rocky Mountain Blues

            One more point:Lets say you buy a house and get a 10 year mortgage from the bank. After 10 years you have paid off your mortgage. In that 10 years your house has increased in value through inflation by 50%. When you sell it (using your logic here) you should pay the bank 50% of your capital gain, after all, they should get their profit too. The thing I don’t understand about people who hold your position is how they don’t see that their is an economic benefit to the city from the construction of and operation of the new facility. That is why it makes sense for the city to actually invest in the project. Skylardog has pointed out some of the benefits the city receives. Just this week we have seen the Flames raise $380 million for local charity at just one of their many fundraising events. I don’t know anyone who doesn’t want the city to benefit from the deal, we just think because of the benefits they should actually invest in the project and not expect it all to come from the Flames.

        • BringtheFire 2.0

          Where in the world did you get that definition of a contribution? A contribution is not defined by its return, nor is its definition linked to reciprocation.

        • McRib

          No a contribution has as much to do about liability, as it does about repayment. The city is absorbing some of the Flames liability, when you’re talking $150+ Million that’s a HUGE investment. You obviously also don’t understand what interest would be calculated for a tax free loan of this magnitude on the open market? The city is saving the Flames massive amounts of money for giving a interest free loan and once again eating the liability (interest would minimum be in the tens of millions).

          The problem with these taxpayer funded stadiums is the billionaire owners never want to give up a percentage of the revenue streams (tickets, concessions, parking, concerts, etc). If the Flames were willing to do that, I am certain the Flames wouldn’t require that 1/3 repayment, but the Flames won’t because they’ll want full profit margins (which is also why they will never move to the Seattle arena deal, because the ply never get 100% of profits there and willl likely get 0% o concerts).

          This allows the owners to get full access to total profits after a couple of years, while easing some of the liability and large sums of interest. This is a no brainer for rational business people.

        • Parallex

          … Ok. That’s the most tortured definition of contribute I’ve seen yet. Really, you’re saying an investment with a ROI equal to or greater then 0 is not a contribution. Wow.

      • BurningSensation

        Structuring the City contribution as a loan that is paid back is definitely still a contribution.

        – The City borrows $ at a (much) lower rate than the Flames can
        – The City gets paid back over 30 years
        – The City is assumingbrisk as part of the loan, but isn’t making any actual profit

        In essence, the City is losing millions in lost interest and revenue by making this offer (the $ could be invested elsewhere at higher return, or used for infrastructure that provides direct benefits), at no financial gain, and with assumption of risk.

        What the billionaire owners of the Flames want is a handout.

    • Neddd

      @Rocky Mountain Blues
      The city providing a loan is still a contribution as they are taking on risk. How much risk depends on what type of guarantees the Flames would be providing, my guess is that they would provide very little in terms of guarantees. This is why some transparency on the deals discussed thus far would be helpful.

      The other key question is who benefits from the non hockey events, how are these profits divided? Without understanding these points its difficult to form an opinion on who’s being difficult, etc.

      Also, as already pointed out by others here, the economic benefits associated with stadiums/arenas are exaggerated as the associated entertainment dollars would be spent elsewhere in the local economy if the team was to leave.

        • Neddd

          What are you talking about “Risk on a $183 million loan is nothing”. If the new facility is not profitable, and the Flames lose money, how does the city get its money back? Saying that the city receives part ownership of the facility is not helpful “if” it is proven to not be profitable.

          • Rocky Mountain Blues

            I notice that those who oppose the Flames receiving any money from the City have a couple of arguments. First, they say the Flames owners are billionaires and they are making all this money from this deal that they don’t need any help, they are just greedy. Then when we discuss the fact that the City isn’t putting any actual money into the arena, just a loan to the Flames we hear about the incredible risk the City is taking on because the Flames might go out of business and the City might end up having to put actual money into it. They make it sound like an incredibly risky venture. So what is it, is it a cash cow, easy money for the Flames or is it a high risk venture that the city has a good chance of getting none of their loan back because the Flames are probably going to go broke?

          • McRib

            ““Risk on a $183 million loan is nothing”

            You lose every rational business minded person with this comment. Once agin do you understand what interest on a loan of this magnitude would be in the “real world”, $30-40 Million minimum. Things like flooding or fires never occur in this area of the world, EVER!!! Global financial crises never occur as well!!

            One last point, you say the City isn’t giving anything to the Flames? Do you understand what large commercial plots of land ar sgoing for in prime areas of the city like Victoria Park right now? Lol. The land donation is a MASSIVE investment!!!

            Just because mayors in the past like David Bronconnier have given away free land left and right to all of their cronies like it was going out of style, doesn’t mean it’s not a huge investment.

  • Cheeky

    Don’t worry after election Nenshi and his spend thrift gang of councillors will raise taxes to get this built and this will all be a faint memory of the past. Art will soon follow…

    • Tates

      Nenshi has the new arena in his reelection plans. Secure the left-wing base, act tough ahead of the election.

      Bur you know he cares way too much about his image and legacy to be the guy that lost the Flames.

      Both sides are using Flames fans as pawns in their individual game.

  • Ludis Fanaticus

    I recognise posturing and negotiation. However, I most certainly don’t appreciate this move by the Calgary Flames management.
    I will table my frustration with the City, as it would seem that they are willing to be transparent with the ‘talks’ regarding a new building.
    So lets hear that side. Notably, the Flames were not prepared to provide any details related to financial contribution at yesterdays press conference.

    Many writers here have expressed the basic two sides of this issue reasonably well.
    I am not taking sides, yet, but as a fan I am happy to have this opportunity to express my frustration with my chosen hockey club.

    What did Flames management really expect would happen upon announcing they were taking their bat and ball home?
    The city leaders (politicians) are instantly backed into a position of fight. There is no room for flight.
    So now, Flames management have poisoned the well, in at least the short term, and galvanised a good chuck of the electorate against them in the process. As much as people hate some of the Cities vision on public art and green space, the rallying cry of ‘Welfare for Billionaires’ is too effortless a target.

    Like many I am angry that a season of promise and summer anticipation has been stained by the very creators of our positive vision.
    I hope this issue soon fades and the two sides sit down, out of the public eye, and create something we can all comment on and debate.

    In the interim, Flames, please stop with the passive aggressive threats, please stop pretending you are ‘not running for anything’. Please stop bringing your lawyer to a press conference to deliver intimidation.
    You are being manipulative; that much is transparent.

    • Skylardog

      I actually look at the Flames reluctance to divulge numbers as mature and respectful, given that the city was OFFERING NOTHING! To me it showed a respect towards the bargaining process to not out the City’s $0 offer.

    • class1div1

      Nenshi played a big part in poisoning the well.Not sure how people can call the guy a negotiator. He doesn’t get along with a lot of people,especially rich ones.He took on a position that requires a lot of teamwork but prefers to showboat and run off at the mouth.Not really a guy you’d call a leader.

  • Skylardog

    Going a little bit further, using a cost benefit analysis on JUST the taxes the players will pay over the expected life of the building (here assumed at 30 years) has the following conclusions. Remember that there are many more benefits than just the players salaries (see my post above for a few). Assumption here is that the Flames eventually move to the US if the arena is not built. I used a 6% discount rate.
    Benefit to Canada over 30 years – $413,000,000
    Benefit to the province over 30 years – $103,000,000
    The city benefit from players salaries is difficult to analyse, so I then made an assumption that the City would benefit by approximately one half the value that the province would benefit by. This translates into $51,500,000 over the next 30 years.
    No increase in the salaries of the Flames Players is assumed. (the discount rate is supposed to take this into account).

    Remember this is just the taxes on the Players salaries, but between the 3 levels of government, it would make sense to pay for the arena outright. We all know that is not reasonable, because the Flames benefit too.

    What this should do is shed some light on what kind of benefit we are talking about by having the Flames in the city and having a building for them to play in.

    Would it make sense, given the public benefit just from the players salaries is $568,000,000 over the next 30 years, to have the 3 levels of government fund outright, at least 1/3 of the new arena, or $183,000,000?

    • dontcryWOLF88

      So the city should just buy all businesses new buildings? Because they get tax revenue. This sounds like a great idea. If this argument works for Calgary Sports and Entertainment, then it must work for the pizza hut down your street. And the nail salon in that strip mall near by.

      ..why is it that we even consider giving money to build an arena, but if you said lets fork over public money for a movie theater, people would just blink their eyes at you. I dont know, I dont see why CSEC is different than any other business. This province is turning into Quebec.

      • Skylardog

        The difference is the public nature of an arena. While I focused on just the Flames players taxes, there are benefits outside of the Flames players, including amateur sports teams using the facilities, concerts, etc. A pizza place generates revenue in the establishment when you choose to walk in and order a beer, but other than the dough and beer supplied to the vendor, the benefit ends.
        In the case of the Flames, the benefits far exceed what takes place in the establishment. The pizza place serves beer in their lounge on Flames game nights, as do many establishments in the city. Even more, they serve beer in their establishments on night when the Flames are in other cities.

        It also differs greatly from funding, say an Amazon warehouse. The public can enter the new arena. Try getting into an Amazon warehouse to even just look around. Yet there is a benefit to a warehouse, jobs. The Flames offer jobs too. From ushers to concession workers, even GM’s and coaches.

        The difference is the public nature of the business.

    • Neddd

      The thing is, you’re assuming that these tax dollars completely disappear if the team leaves. Aren’t the players salaries paid for largely by the local community in respect to entertainment/disposable income? And wouldn’t these disposable income dollars still be spent in the local community on other forms of entertainment?

      If the answer is yes to both questions, then how does the tax revenue you speak of completely disappear? The answer is that it doesn’t, it is just generated through other local businesses that now benefit from the available entertainment dollars that are no longer being spent on the Flames.

      This is why the economic benefits from sports teams are grossly exaggerated. Now looking at cultural, entertainment value, etc. associated with professional sports is a different question. But looking at it on a purely economic basis, the benefit to a city is not as great as the sports teams would like people to believe.

      • cberg

        No, once the Flames are gone, we’d have nothing to cheer us up over the long winter, certainly will not be cheering for the Oilers, but rather be booking more trips away to spend our entertainment dollars in Vegas, the Caribbean and etc.

      • Skylardog

        I don’t disagree with you that they will find other places to spend money. But sports, the major 4, are very different than most, if not all forms of entertainment.

        And do not forget, that having a full variety of different types of entertainment is also important. Hockey and football included.

        I am not going to the ballet, even if it is the only ticket in town. Most ballet enthusiasts, are not as likely to go to Flames games (and get so riled up as we all do).

        Most forms of entertainment are limited to the particular facility, time and date of an event. In order to be a part of the event, you have to be at the event. Sports has broadcasting. You can be a part of the event, even when not at the game, even when the game is not in your city, or even in the country.

        Bars and restaurants benefit from Flames games, even when the event is not in town. Movies, concerts, ballet, symphonies, art showings, performances all require personal attendance to see the event. 500,000 Calgarians could watch a Flames Stanley cup game, many at bars, restaurants, or at friends, and businesses benefit from the exposure. We ar not all fitting into an art museum. Sports is more than the event, more than the facility.

        And yes sports is VERY good and benefiting the city. The reason players are paid millions, is because sports cycles money through the economy very effectively. And every time a dollar changes hands, it employs, it feeds families, it pays wages, it gets taxed. The art museum isn’t turning money over at the same pace, or the artists would be making millions each year.

        • Neddd

          Most of the benefits you’re mentioning are not economically based which was my point. All the things you point out, having different entertainment options, are valid.

      • Rocky Mountain Blues

        The economic impact is greater than just the Flames. How often in the last few years have we seen scores of Calgarians flocking to Edmonton to catch some major performer that just hits the A list cities with adequate facilities? We see it all the time. If you have a facility that can handle these acts then Calgary will be a magnet for outlying areas, bringing in dollars that wouldn’t have been spent here and keeping Calgarians money here that would have been spent in Edmonton, Vancouver or Vegas. That is just one example of many where we can underestimate the economic benefits by focusing only on the Flames and not seeing the big picture.

    • Ludis Fanaticus


      I did read your analysis and think its an admirable attempt at quantifying the economic impact of the Calgary Sports and Entertainment group.
      I don’t dispute that there are plenty of reasons to keep a team and that giving something back in order to gain tax and other revenues is worthwhile.

      However, we don’t know that the City is offering nothing ($0). I’m taking a wait and see approach and am happy to hear there will be some public declaration from at least the municipal side.

      For me, a contribution from all levels of government and the teams ownership group makes sense; all have something to gain.
      What needs to be further weighed is the fiduciary responsibly of each level of contributor – the City may have to forgo other projects for example, which may not be popular with the electorate.
      And as we saw from an earlier article on stadium funding, who is participating in the financial downside, or (more hopefully) upside within that agreement.
      It seems most of these tax payer funded deals leave the tax payer responsible for any cost overruns, change in interests rates, and potential lack of financial success of the overarching project.

      Further, and perhaps somewhat controversially, I am not a fan of a greater role in a user pays system.
      I think putting too onerous a responsibility on those attending events while allowing others to watch at home ‘for free’ offers a mismanagement of the profit sharing picture.
      User pays has a part to play, but not to the $10 per ticket surcharge level I have seen suggested on this site.

      Its complicated to be sure and certainly everyone at the table has their own bias.
      As fans and tax payers we should be hoping for something fair to the club and our City.

      • KKisTHEproblem

        I don’t have time to discuss your well written post right now but I wanted to point out that the TV watching is not free. The nhl sells tv rights and the Flames get a big chunk of coin from that. So user pay should still be the principle that we look to first and foremost in making the decision. Maybe not the only one but it needs to be front and center.

        Lastly, based on a $100 ticket, $10 seems reasonable to me, let alone $300 tickets. Maybe it should be a percentage approach such as 5%

        • Ludis Fanaticus


          Thanks for the praise. I have enjoyed the editorials on this site, and often to a great extent, the postings by members, for some years now.
          Woefully, I have done little to contribute to the community in that time.

          I believe our philosophical standoff is in that I feel user fees should not bear the greater portion, or a significant portion, of the repayment structure.

          My argument is based on the principle that all those that gain should be contributing to the new facility on a proportional basis.
          Ticket buyers are already supporting the contribution of income to the steak holders (Flames and Governments) through their purchase. Just as TV viewers are contributing by putting eyeballs on advertising allowing the Club to accrue TV rights revenue.
          The ticket buyer is already supporting the various levels of government through tax on their purchase. The TV viewer is doing something similar on a less direct basis.

          Defining the user, in my view, is broader than the guy wanting to attend a game, concert, etc.

          I concede that Flames ticket buyers are likely the more affluent, or in may cases, procuring seats on a deductible basis for businesses.
          So sure they could be further ‘taxed’ through a user pay fee, but I don’t think it should be a significant revenue stream.

          Whatever that contribution is, I would want to hear, and we wont, that the surcharge will be removed once the bill is payed.
          Too often these monies are later dumped into general revenue, which I find frustrating and misleading.

          • BringtheFire 2.0

            “I believe our philosophical standoff is in that I feel user fees should not bear the greater portion, or a significant portion, of the repayment structure.”

            And I believe you are correct, good sir or madam or misc. .

  • BurningSensation

    Structuring the City contribution as a loan that is paid back is definitely still a contribution.

    – The City borrows $ at a (much) lower rate than the Flames can
    – The City gets paid back over 30 years
    – The City is assumingbrisk as part of the loan, but isn’t making any actual profit

    In essence, the City is losing millions in lost interest and revenue by making this offer (the $ could be invested elsewhere at higher return, or used for infrastructure that provides direct benefits), at no financial gain, and with assumption of risk.

    What the billionaire owners of the Flames want is a handout.

  • freethe flames

    So tired of this song and dance. The mayors job is much more than doing want the CSE want. I like many find some of the art protects a waste of money but unless the Flames are willing to share revenues then a loan from the city may be the only way to be involved. Tired of KK and BB holier than thou attitude about how the Flames are hard done by.

    • Skylardog

      Did it ever occur to any of us that funding the Flames at the right level, will actually have a tax benefit by creating and ensuring tax revenues long term? If JG an Mony each pays $2.75 million in tax this year (I think it would be over $3.0 Million each), do you realize that those 2 alone could fund the building of 1 school project in the province ($1.1 billion spent on 200 projects). If the Flames leave, those schools will get built in Seattle, or wherever.

      As I said earlier, the Cost-Benefit analysis just on Flames players taxes is $568 million over the next 30 years. What schools will we have to forgo in the future, because we didn’t spend $183 million to fund an arena in 2017?