Some Calgary council members want Mayor Nenshi out of Flames arena talks, because he’s not “gung ho” enough

This article from the Toronto Star is really weird and convoluted and lede-burying, but if I get the gist of it, it’s that some members of the Calgary city council are trying to find a way to freeze Mayor Naheed Nenshi out of future negotiations with the Flames over a new arena, because he’s been too good at not giving away the store. The evidence on hand:

At least 10 councillors are directly involved in or aware of recent meetings in which elected officials have discussed drafting a notice of motion calling on council to strike a new committee — one that may exclude past brokers from both parties.

“Initially, it should be new blood that’s on it to give it a different perspective than we’re getting now,” said Coun. Ray Jones.

“The longer we leave it, the more it just kind of goes away,” he explained. “Everybody right now is gung ho to get going on it, and I think we should take advantage of that.”

And:

In addition to Jones, councillors Ward Sutherland, George Chahal, Sean Chu, Shane Keating, Peter Demong, Diane Colley-Urquhart, Joe Magliocca, Evan Woolley and Jeff Davison are directly involved in or aware of discussions to restart talks and form a new committee.

“We’ve got to get a few oars in the water here and moving in the same direction before we really can make any headway with it,” said Davison, who is leading the charge.

“Overall, you’re just seeing a different makeup on council,” he said. “There’s a lot of us that are new, and sometimes some of the ideas that failed in the past get rejuvenated.”

And:

Lori Williams, associate professor of policy studies at Mount Royal University, said councillors might be wary of voter backlash given many Calgarians supported Nenshi’s position.

“I suppose it does make sense to try to get new people to the negotiating table so that any animosities that may be lingering from the breakdown of negotiations in the past would not be part of this,” Williams said.

Okay, sure, “new blood” and “new ideas,” but otherwise this is just weird: The last round of negotiations “broke down” not because of any problems on the council side, but because Nenshi pointed out that the Flames owners’ plan could cost the city more than a billion dollars, and then the Flames walked away from the table and put all their energies into trying to defeat Nenshi in last fall’s mayoral election. When that didn’t work, they mostly sighed a lot about how now what were they gonna do with a mayor in power who didn’t want to give them lots of taxpayer money, and deployed NHL commissioner Gary Bettman to say that the Flames will lose money without a new arena, when that’s patently not true.

While Nenshi has been possibly the most prominent city mayor anywhere in holding the line on sports subsidies, he’s always been limited by Calgary’s weak-mayor system, in which he’s only one vote on the 15-member council. Given that the Star report only talked to a couple of council members, it’s hard to say whether this is an actual major revolt or just some people trying to trash-talk the mayor into getting out of the way and letting them get down to the business of shoveling money at the Flames — one councillor, Shane Keating, is cited as having said of Nenshi, “I’ll never be as intelligent as you are, but I’ve been smarter than you many times,” which is described as a “stinging rebuke.” Maybe it sounds different in the original Canadian?

Flames arena wasn’t built to last like in Charles Dickens’ day, writes confused Canadian columnist

Here’s an article from the Globe and Mail on the Calgary Saddledome that starts with an extended Charles Dickens reference, because man, oh man, does sportswriting get boring after a while if you don’t mix it up.

Once columnist Roy McGregor gets to the point, it turns out to be that unlike the things Charles Dickens saw on his visit to Canada — and, presumably, Dickens’ works themselves — the Flames‘ arena wasn’t built to last, or at least “wasn’t made to produce revenue in the deep streams demanded these days by professional hockey.” (Whereas Canadian buildings in 1842 were? Hey, it’s not my metaphor.)

This is an assertion we can actually check! Hey, Forbes magazine, how does the Calgary arena compare to the rest of the NHL in revenues? Unfortunately, Forbes doesn’t break down the NHL by venue revenues, but the Flames rank 21st out of 30 overall in the league in total revenues, which is neither great nor awful. They’re about $22 million in annual revenue behind the Edmonton Oilers, the team that’s most often held up as an example of a nearby franchise that got a new arena and is now thriving — spending $1.2 billion on a new arena to get back $22 million a year in new revenue would be spectacularly stupid, which is no doubt why the Flames’ owners want the city of Calgary to spend much of the money instead. And if that strikes you as spectacularly stupid in turn, McGregor has an answer for that: revitalization!

In this era of what he calls “sportainment,” André Richelieu says that, increasingly, arenas are being built as entertainment hubs, the “jewel box,” so to speak of massive developments that go far beyond any sporting event.

Richelieu, who has taught sports marketing at Laval University and is currently a professor at École des sciences de la gestion in Montreal, says “The rationale behind these real estate projects is to trigger traffic all year round in order for the new stadium complex to become a point of convergence for the community and, in some instances, revitalize a neighbourhood.”

Yeah, no, not so much. With numbers like this, maybe it’s understandable that you’d reach for the Dickens quotes instead.

 

Gary Bettman to hold breath and turn blue if Flames don’t get arena subsidies

The Calgary Flames arena squabble has remained fairly quiet since the Flames owners failed in their attempts to displace Mayor Naheed Nenshi in last fall’s elections, except for NHL commissioner Gary Bettman, who won’t shut up about it. Since October, Bettman has declared that the Flames’ “sustainability” was being jeopardized by stupid economists who don’t believe arenas revitalize cities just because numbers show they don’t, said the Flames can’t be “viable for the long term” without a publicly subsidized arena, called the lack of forthcoming public funds “very frustrating,” and said that Calgary will never get the Olympics without a new arena, even if the IOC says the exact opposite. As on Friday, he was back on the sustainability tip:

“It’s clear that this building is the oldest building in the league. It’s clear that the team needs a new building. Calgary’s a great market, there are great fans here, but a building is as important a factor as anything else. The team’s competitive situation, financial stability is obviously being impacted with each season that they stay here.”

Bettman said that Calgary used to be a top 10 team that made money for the league, but now over the past few years, the NHL has been the one writing cheques.

“The cheques are getting bigger and that means the situation, financially, continues to deteriorate and that will affect, I suppose, the competitiveness of the organization.”

What does the evidence say? Let’s check out Forbes’ team revenue numbers, which are estimates but have been right on the money when actual revenue data is leaked. Here are the most recent charts from the Forbes Flames page (time moves right to left, so the most recent year, 2017, is at left):

So revenue has in fact been going up pretty steadily, though operating income (profits) has taken a dip as the team ownership started spending more money on players. The Flames have dipped from 13th to 19th among most valuable NHL franchises since 2010, but that’s more owing to other teams boosting their value in the interim than to anything going wrong for the Flames — “they’re still making money, just other teams are making even more now” isn’t usually what normal humans mean by “unsustainable.”

Bettman also said Friday that the Saddledome is costing Calgary concerts that it could otherwise get, because like the Olympics, that is totally the concern of an NHL commissioner:

“I was told that there were 27 acts, some of them multiple days, that have played in Edmonton since the building opened that haven’t played here,” Bettman said. “That goes to the quality of life of the city and that’s an indication as to the differences in the buildings.”

I have other news fish to fry this morning, so I’ll leave this to readers to fact-check. Be sure to check for acts that played Calgary but not Edmonton, too!

Bettman says Calgary needs new arena to host Olympics, IOC begs to differ

Gary Bettman reeeeeeally wants a new arena for the Calgary Flames that is paid for by somebody other than the Flames owners, yet despite having declared the money-making team can’t be “viable” without one and insisted that “academicians” are wrong about arenas not revitalizing cities just because their “numbers” show that they don’t, he still hasn’t convinced Calgary mayor Naheed Nenshi to cough up the dough. So now he’s taken to a time-honored sports tradition: whining.

“The whole problem is, no matter how the city dresses it up, the fact of the matter is they’re looking for the Flames to pay for the whole thing,” Bettman said Sunday.

This is just reiterating last fall’s Flames talking point that because the team would be paying property taxes like any normal property owner, all that money should be counted as a “contribution” to the arena costs, and not just, you know, paying your taxes, because of the Casino Night Principle. That didn’t go over too well the last time Bettman said it, and honestly “You just want us to pay for our own arena that we’ll get all the money from!” doesn’t sound like that much of a complaint, but I guess when you have one arrow in your quiver, you keep going back to it.

Though that’s not really fair, because Bettman has at least one other trick up his sleeve, which is threats — in this case, that Calgary will never get the 2026 winter Olympics without a new arena:

“It may be that an Olympic bid fails cause there’s not going to be a new arena, and clearly if there’s going to be an Olympics in Calgary, which would be great again, they need a new arena,” Bettman said.

Not that hosting the Olympics is necessarily a prize you want to win, but still, that’s an interesting point if tru—

Last Wednesday, the International Olympic Committee assured the city, after examining the facilities, that the Saddledome would be an acceptable venue for both hockey and figure skating at the Olympics.

Oh, Gary. You try so hard. and all you get in return is a $9.6 million a year salary. At least you’ll always have Glendale.

 

Friday roundup: Islanders close to Nassau deal, Olympic stadium to be razed after four uses, and it’s rethink your MLS stadium site week!

And in other stadium and arena news this week:

Have a great weekend, and see you Monday!

Friday roundup: Trump rescued stadium tax break, Sacramento MLS group needs more cash, more!

Happy interval between Hanukkah and Christmas! If anyone is out there reading this and not getting on a plane from somewhere to somewhere else — or is reading this while waiting for a plane from somewhere to somewhere else — enjoy your lightning-round news of the week:

  • San Diego Union-Tribune columnist Kevin Acee, who never met a stadium or arena deal he didn’t love to bits, says that several people are interested in building a new arena in San Diego, including the owners of the Padres and new Brooklyn Nets minority owner Joe Tsai. Acee adds, “Several people insisted in recent weeks the Nets will remain in Brooklyn long-term and there are no plans to ever move the team to San Diego,” which, given the relative size of the markets, is possibly the least surprising sentence ever written in the English language. Also, Acee includes zero attributed quotes in his story, and says nothing about how such an arena would be paid for, so take it with a large grain of salt for the moment.
  • Donald Trump made retaining the tax-exempt bond subsidy for sports stadiums in the tax bill “a priority,” according to one GOP aide. So when he tweeted in October, “Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!”, either he didn’t mean anyone to take him seriously just because he was the president of the United States speaking out on a matter of public policy, or more likely he just forgot to check with his funders before clicking Tweet.
  • “The Miami Open tennis tournament won permission to move to the Miami Dolphins’ stadium, with the kickoff planned in 2019,” reports the Associated Press, which seems to be slightly confused about how a tennis match starts.
  • After the NBA used the promise of an All-Star Game for Cleveland in 2020 or 2021 if it approved publicly funded arena renovations for the Cavaliers, and the city approved $70 million worth, the league gave those games to Chicago and Indianapolis. Not that there’s really that much value in hosting an NBA All-Star Game, but still, HA ha, suckers.
  • Apparently the reason why Sacramento didn’t get an MLS expansion team along with Nashville this week is the league is worried the city’s ownership group doesn’t have enough cash for a $150 million expansion fee and a $250 million stadium. All they need is to find someone with deep pockets who thinks the best thing to do with their money is to invest it in a U.S. soccer franchise that will start off $400 million in the hole, and, well, good thing that P.T. Barnum movie is opening this week, that’s all I can say.
  • There’s a “Plan B” stadium proposal for the Pawtucket Red Sox, where instead of helping to fund the stadium directly, the state would instead give the city all income and sales taxes collected at the stadium and let the city use the money on construction costs. Rhode Island state senate president Dominick Ruggerio says he doesn’t “see that as being a viable alternative,” and plans to submit his own stadium-financing bill, which probably won’t pass the state house. This could go on for a while, until somebody remembers where they stored the money generating machine.
  • The Arena Football League is now down to four teams, in part because the Cleveland Gladiators had to suspend operations for the next two seasons thanks to renovations to the Cavaliers’ arena. This was reported in the Albany Times-Union, which has to care because Albany is supposed to be getting an AFL expansion team this year, and man, do I feel sorry for whoever got stuck with being the Times-Union beat reporter on this team, because this is looking like a sad year ahead for them.
  • Deadspin’s Drew Magary weighed in this week on arena and stadium subsidies and concluded that “Arenas Are Important And Football Stadiums Are Not,” according to his headline, but really he meant “if you’re going to waste money on something, at least arenas can be used more days of the year,” which, fair enough. Or as Magary puts it as only he can: “We are entering an age of horrific corruption, and so I have accepted the fact that living in a fraud-free America is a hilarious pipe dream. All I can do is hope for the least of all corruptions, and pray that a bare scrap of public good accidentally comes out of it. If you are some ambitious dickbag city councilman looking to make his name for himself, an arena should be your priority when it comes to getting worked over.”
  • NHL commissioner Gary Bettman spoke out again about the Calgary Flames arena situation, calling it “very frustrating” and saying that “they’ll hang out and hang on as long as they can and we’ll just have to deal with those things as they come up,” but insisting that “yes, Quebec City has a building, but nobody’s moving right now, we’re not expanding East.” Which either means the Flames owners really don’t want to threaten to move right now (or ever), since making overt move threats is usually Bettman’s job, or it means even Bettman is sick of trying to pretend that the Flames have a viable threat to go anywhere.

Friday news: Phoenix funds Brewers but not Suns, brewers float crowdfunding Crew, and more!

So, so much news this week. Or news items, anyway. How much of this is “news” is a matter of opinion, but okay, okay, I’ll get right to it:

  • Four of Phoenix’s nine city council members are opposed to the Suns‘ request for $250 million in city money for arena renovations, which helps explain why the council cut off talks with the team earlier this week. Four other councilmembers haven’t stated their position, and the ninth is Mayor Greg Stanton, who strongly supports the deal, meaning any chance Suns owner Robert Sarver has of getting his taxpayer windfall really is going to come down to when exactly Stanton quits to run for Congress.
  • Speaking of Phoenix, the Milwaukee Brewers will remain there for spring training for another 25 years under a deal where the city will pay $2 million a year for the next five years for renovations plus $1.4 million a year in operating costs over 25 years, let’s see, that comes to something like $35 million in present value? “This is a great model of how a professional sports team can work together with the city to extend their stay potentially permanently, which is amazing, and we’re doing it in a way where taxpayers are being protected,” said Daniel Valenzuela, one of the councilmembers opposed to the Suns deal, who clearly has a flexible notion of “great” and “protected.”
  • And also speaking of Phoenix (sort of), the Arizona Coyotes are under investigation by the National Labor Relations Board for allegedly having “spied on staff, engaged in union busting and fired two employees who raised concerns about pay.” None of which has anything directly to do with arenas, except that 1) this won’t make it any easier for the Coyotes owners to negotiate a place to play starting next season, when their Glendale lease runs out, and 2) #LOLCoyotes.
  • A U.S. representative from Texas is trying to get Congress to grandfather in the Texas Rangers‘ new stadium from any ban on use of tax-exempt bonds in the tax bill, saying it would otherwise cost the city of Arlington $200 million more in interest payments since the bonds haven’t been sold yet. (Reason #372 why cities really should provide fixed contributions to stadium projects, not “Hey, we’ll sell the bonds, and you pay for whatever share you feel like and we’ll cover the rest no matter how crappy the loan deal ends up being.”) Also, the NFL has come out against the whole ban on tax-exempt bonds because duh — okay, fine, they say because “You can look around the country and see the economic development that’s generated from some of these stadiums” — while other sports leagues aren’t saying anything in public, though I’m sure their lobbyists are saying a ton in private.
  • A Hamilton County commissioner said he’s being pressured to fund a stadium for F.C. Cincinnati because Cincinnati will need a sports team if the Bengals leave when their lease ends in 2026 and now newspapers are running articles about whether the Bengals are moving out of Cincinnati and saying they might do so because of “market size” even though market size really doesn’t matter to NFL franchise revenues because of national TV contracts and oh god, please make it stop.
  • MLB commissioner Rob Manfred says the proposed Oakland A’s stadium site has pros and cons. Noted!
  • NHL commissioner Gary Bettman says the Calgary Flames‘ arena “needs to be replaced” and the team can’t be “viable for the long term” without a new one. Not true according to the numbers that the team is clearing about $20 million in profits a year, but noted anyway!
  • Cincinnati Mayor John Cranley is set to announce his proposal for city subsidies for F.C. Cincinnati today, but won’t provide details. (Psst: He’s already said he’ll put up about $35 million via tax increment financing kickbacks.)
  • The Seattle Council’s Committee on Civic Arenas unanimously approved Oak View Group’s plan to renovate KeyArena yesterday, so it looks likely that this thing is going to happen soon. Though apparently the House tax bill would eliminate the Historic Preservation Tax Credit, which the project was counting on for maybe $60 million of its costs, man, I really need to read through that entire tax bill to see what else is hidden in it, don’t I?
  • The owners of the Rochester Rhinos USL club say they need $1.3 million by the end of the month to keep from folding, and want some of that to come from county hotel tax money. Given that the state of New York already paid $20 million to build their stadium, and the city of Rochester has spent $1.6 million on operating expenses over the last two seasons to help out the team, that seems a bit on the overreaching side, though maybe they’re just trying to fill all their spaces in local-government bingo.
  • There’s a crowdfunding campaign to buy the Columbus Crew and keep them from moving to Austin. You can’t kick in just yet, but you can buy beer from the beer company that is proposing to buy the team and then sell half of it to fans, and no, this whole thing is in no way an attempt to get free publicity on the part of the beer company, why do you ask?

Handicapping Deadspin’s “Worst Stadium Scam” Vote

Deadspin is holding its second annual Deadspin Awards, and among the categories, you will be excited to know, is Worst Stadium Scam. And it’s set to be a tight race, with these candidates, not all of which are technically from 2017, but let’s not nitpick:

  • The Raiders robbing Las Vegas
  • The Flames trying to rob Calgary
  • The Falcons robbing Atlanta
  • The Louisville Cardinals robbing Louisville
  • FC Cincinnati robbing Cincinnati
  • The Pistons and Red Wings robbing Detroit

Even though these seem mostly selected by which stories were covered by Deadspin in the last year (Nashville SC robbing Nashville didn’t make the cut, nor did the Cavaliers robbing Cleveland), that’s a pretty solid selection. The Raiders and Falcons stand out for the scale of the subsidies — the Raiders will get $750 million in state cash while paying zero rent, while the Falcons will end up getting almost that much over time — and the Falcons have the bonus scamminess of hiding $400 million of their payday in a “waterfall fund” that will keep paying out long after the stadium’s opening. The Flames and FC Cincinnati haven’t been successful in their shakedowns yet, but are notable for trying (and failing) to get a more team-friendly mayor elected in the former case, and for demanding subsidies on the grounds that their owner has never asked for them before so he’s due in the latter. The Red Wings and Pistons are getting about $350 million in public money from a bankrupt city (or from a state that is otherwise starving a bankrupt city, at least), while the Louisville basketball arena deal is just a nightmare without an end.

I’m not going to reveal how I voted, except to say that it was a tough decision, and I won’t be unhappy at all if one of my second choices takes home the prize. Go cast your ballot now, and give extortionate corporate behavior and terrible public policy the shiny trophy it so desperately deserves.

Bettman says feh on economists, can’t you see publicly funded arenas are the bee’s knees?

Good morning! Are you ready to have NHL commissioner Gary Bettman commissionersplain to you about why public subsidies for sports venues are great and you are wrong if you think otherwise? I sure hope so, because Bettman was off and running yesterday in an interview with Yahoo Finance sponsored by Prudential (or maybe an interview with Prudential sponsored by Yahoo Finance — it’s so hard to tell from the backdrop):

There are academicians who agree with this and disagree with this in theory, but I disagree with them: Having a professional sports team as your anchor tenant, if you do it the right way, can literally transform a city. Look at Chinatown in Washington, D.C., after the Verizon Center was built. Look at L.A. Live, built around Staples Center. Look at what’s happened in Edmonton, where they’re revitalized downtown. Look at what’s going on in Detroit. All of these around new arenas, where an entire area of a city has been vitalized, or revitalized, created a new tax base, brought businesses, residences, people downtown to live.

This argument — look at what’s going on around new arenas, who are you going to believe, some number crunchers or your own eyes — requires ignoring a lot of things: that “revitalization” often only takes place because the land was being held fallow in anticipation of new development in the first place; that D.C.’s Chinatown is now unaffordable to its former Chinese-American residents because it’s been remade as a playground for arenagoers; that even the most active arenas are dark about half the year and more than half of each day, and so may not be the best thing for local businesses unless they’re running a pizzeria that can get people in and out super-quick; and, yes, that those number crunchers have found time and again that any arena-related increase in tax receipts in one neighborhood is countered by a corresponding decrease elsewhere in a city, since you’re just moving spending around, not creating it out of thin air. On the other hand: Look! An arena! Lots of people! What’s not to like?

Bettman then pivoted to his real point, which was how sad it is when a team owner wants a new arena, and for some reason some crazy mayor won’t give him one:

And Calgary, the Flames were trying to do the same thing, and they have been spectacularly unsuccessful in reaching an agreement with the city on how to move forward. And they’ve announced that they are no longer pursuing a new building, which is unfortunate, because they’re playing in the oldest building in the league, and at some point their sustainability gets jeopardized if they don’t have the same types of facilities, amenities, revenue-producing opportunities that other franchises have.

Sustainability — we’re now into another of the items in the stadium-grubbers’ playbook, which is how can we compete without a new building like all the other kids have? Of course, the Flames owners are currently turning a profit of about $20 million a year and say they can only afford a new arena if someone else pays half the costs, so really the only “revenue-producing opportunity” here is to get public cash. Still, it’s the oldest building in the league (note: not actually the oldest arena in the league), don’t you know that old things are bad?

Anything else on your mind, commissioner?

When you’re creating new taxes that wouldn’t otherwise exist but for the development of an arena and the surrounding area, I don’t think it’s unreasonable to devote some or all of those taxes to paying off what’s been created, and which otherwise wouldn’t exist.

This is the argument for TIFs, and I already typed in all the dialogue from the Odd Couple “Casino Night” episode to explain this once, so go read that again to explain why it’s nonsense. Or just re-read Geoffrey Propheter’s study linked above to see why “otherwise wouldn’t exist” is nonsense. But then, who you gonna believe, a guy with a spreadsheet or a man with a fancy backdrop and a job that requires him to say these things?

Nenshi re-elected as Calgary mayor, enraged Flames staffer tweets this is “worse than Trump”

Oh, hey, did I neglect to inform you all about the results of the Calgary mayoral election? Turns out Naheed Nenshi was re-elected by a 51-44% margin over challenger Bill Smith — either those polls showing Smith surging out to a double-digit lead were wrong and the ones showing Nenshi with a huge lead were more accurate, or all polling in the age of cell phones and political cynicism is crap, and you could have predicted Nenshi’s win just as well by throwing darts at a board.

Either way, this means that Canada’s member of the Gang of Four and 2014 winner of the World Mayor Prize — yes, that is apparently a thing —will be back at the negotiating table with the Flames over their arena demands for the foreseeable future, and the team’s communications director had something to say about that on Twitter (briefly, until he deleted it):

The Flames quickly backtracked and said the statement of the guy in charge of speaking to the media on behalf of their team shouldn’t be taken to be a statement on behalf of the team. Asked about the tweet on CBC yesterday, Nenshi replied, “I have no idea who this person this is, I’ve never met him, and boy, what an out-of-touch tweet to send.”

Clearly, if if they’re not all tweeting about it, Flames execs are steamed, especially after their arenaful of anti-Nenshi ads failed to bear fruit with voters. And according to National Post columnist Jen Gerson, the NHL was working behind the scenes as well to undermine Nenshi:

Amid a stalled negotiation for a new hockey rink, the NHL unabashedly attempted to interfere with Calgary’s election. Finding Nenshi uncowed by the might of our local hockey squad, league commissioner Gary Bettman even made strategic calls to select media insinuating that should the team relocate the mayor would be indifferent…

At the very least, Nenshi’s win seems like suitable comeuppance for Bettman. There are limits in this country to even hockey’s power.

Leaving aside the particulars of the Nenshi-Smith showdown, what terrible signal would a Smith victory have sent to politicians in other hockey cities? Play nice, pony up or pack out?

Now that Nenshi has won re-election, what now? Gerson concludes that “an emboldened Nenshi and dejected Flames ownership will re-open arena negotiations with all the grace and goodwill of screaming marmots,” which sounds about right. There will almost certainly be renewed threats of the Flames leaving town, though as we’ve covered here before, it’ll be tough for owners to find a city where they’ll make more money than they’re already raking in in Calgary. And Nenshi knows this, and knows that this gives him leverage, and is likely to stick to his guns in demanding that if the city puts up money for an arena, it get repaid from a cut of arena revenues. The Flames owners will continue to consider this a supreme insult. In other words: enraged mustelids. Ah, love.