PHOTO CREDIT: SERGEI BELSKI / USA TODAY SPORTS
In recent days, an article from the Calgary Sun has made the rounds on social media, mostly because of its big scary title: “Flames aren’t bluffing, it’s just a basic business decision.” In reference to the recent developments regarding the new arena for the Calgary Flames, the author argues that the team is actually serious about moving, and that the city should pony up and pay for the new arena. It’s the same old crock.
I really wouldn’t care about it (not even going to bother to directly link to it), but the Flames’ own players are starting to tweet it out and, from my observation, it’s causing panic for people who should really know better. Even worse, it’s causing people to agree with the arguments despite the lack of critical thought used in writing said article.
Ever since Ken King appeared on Toronto radio, we’ve been exposed to takes that take his poor word choice seriously, and this is the latest. It’s a mish-mash of bad arguments and deliberate misinformation designed to scare the reader into believing that your city government is trying to screw you out of a hockey team (for reasons unknown, really. The article isn’t well-constructed).
Here is a point-by-point rebuttal of these arguments, because critical thinking is key for these situations.
If a home builder cannot get land on which to build and sell homes, he or she is faced with making a decision: Either shut down the company and put a couple hundred people out of work, or leave town in search of better opportunities.
It’s called making a prudent business decision to save the business.
We are just beginning the article and we already have a very bad comparison. In the example of the home builder, he literally cannot do business because his job relies on land being available for him to do business. No land, no business.
This is a bad example because the Flames still have an arena which they can use to do business. We just saw them do business for eight months of the year. They’re doing business, and they’re doing quite well for themselves. Now we don’t know exactly how well they’re doing (although any team willing to spend to and above the cap is probably a bit well off), but Forbes provides some clarity. The team pulled in $120M in revenue and $18M in operating income, 10th in the league for that category and the smallest market in the top 10. They simply aren’t in the same situation as the hypothetical home builder.
It’s about the Calgary Flames and a business decision they may be forced to make: Leave town to stay in business.
Now here’s some incredibly poor framing of the issue. Again, the Flames are still in business, and they still will be for the foreseeable future. The ownership group still makes money. It may not be as much money as a team with a newer arena, but they are not losing money to the point where the Saddledome is actually forcing this decision.
It’s also a very shortsighted view of the situation. The entire article, as we’ll see, takes the Flames at their word and doesn’t dig any deeper. The premise is centered on the idea that the Flames are not bluffing about Ken King’s radio appearance; that they will actually move if the city does not foot the bill for their arena.
And that is false. The author believes that the Flames can simply move away if they so choose, but never thinks about the logistics of that. If Calgary doesn’t want to pay for a new stadium, which city does? Seattle? They already lost their beloved Supersonics due to arena issues and the city still remains adamant about not spending public money on an arena. The only non-NHL city with a brand new NHL arena is Quebec City, whose prospective owners are still waiting on their expansion team. That’s two big options out the window already, and there’s not a whole lot left (Hamilton? Cleveland? Kansas City?).
Even if they find a city willing to pay for their stadium, where are the Flames going to find a fanbase who is going to be as rabid and loyal as Calgary? Sure bets in big markets, like the Islanders and Devils, have had bad attendance this year. The Flames, on the other hand, have been averaging around 19,000 fans for the past few seasons in a small market, which have also been some of the crappiest in recent memory. This is also in spite of the fact that tickets are still pricey. Most NHL markets cannot draw that, even less so in the untested markets. The Flames need Calgary more than Calgary needs the Flames.
Sure, the choice is there. The Flames could definitely move, and that’s probably a card that is way in the back pocket.
It is also completely unfeasible at this point and, if they seriously pulled that stunt right now, it would probably weaken their bargaining position. Gary Bettman doesn’t even want to move the fledgling Hurricanes, much less a tried-and-true Canadian market team. Imagine how embarrassed ownership would look if they announced to the world that they want to move and they had no takers.
Keep in mind, too, that CSEC owns all of the major teams in Calgary, including the Hitmen, Stamps, and Roughnecks. Moving the marquee franchise would not only poison the well in Calgary with the existing community, it would completely sunder the internal operations of the various teams, which are likely intermixed to some degree.
So: moving the Flames from Calgary would be a big gamble and not at all simple. The team knows that moving is unfeasible, but it’s in their best interest to have you feel that it is.
The city — or rather Mayor Naheed Nenshi — is playing hardball with the team, saying it doesn’t offer any benefits to the ‘public’ and public money should not be spent to support rich private entrepreneurs.
A dishonest, nearly false, statement of what Nenshi actually said:
“The calls to our office, the emails, the comments have been, I would say, 99.999997 per cent saying please Mr. Bettman stay out of it and no, there should be no public money for this,” said Nenshi.
“Certainly we’ll be good partners on this. We will have an open and honest discussion about what might be possible, where there might be a win-win,” he said.
“I continue to say that, as always, public money must be spent for public benefit and if we can figure out a way that there’s public benefit in an interesting project in Victoria Park, we’ll take that to the citizens and see what they think.”
Nenshi didn’t say no public money would be available to CSEC, he said that public money would be available once the Flames could prove that the new arena would provide benefits to the public. That seems like a good approach to a project of this size.
It’s rich that the author thinks it’s incredibly bad that a mayor should, you know, look out for the people he was elected to look out for. Should Nenshi not take time with this process? Should he not be careful with giving away millions of dollars of public money for the benefit of billionaires? Just from reading his other articles (and this one), I think the author leans politically towards fiscal conservatism and low government spending (before the comments section goes ablaze, this is a perfectly fine position to have. It’s just the consistency in applying his beliefs that bothers me), but that all goes out the window when it comes to a hockey team? Give me a break.
Speaking of rich, this comes from the mayor of a city that has borrowed hundreds of millions of dollars — initially through a tax incremental funding program, now called a community revitalization levy — to remediate the dump that was the East Village. It was remediated so private developers would build condominium towers to attract people to live in the area. Private developers who are making a profit.
Here’s Kent Wilson with the actual truth behind the city’s dealings in the East Village versus their dealings with the Flames:
The developers and private interests in East Village didn’t also ask the city to pay for their buildings once the area was redeveloped. Sorry… not just pay for the buildings, but also remain de facto owners of the buildings so the tenants (set to reap all the profit from the operation of the place) wouldn’t have to pay property taxes, which is the only revenue source available to the city. The correct relationship between private interests and the city is mostly evident in the East Village redevelopment: the city pays for improved access and infrastructure. Developers move in and build stuff that other people rent or buy. The developers make money on their property, the city makes money on increased tax base. That’s not at all the issue with the Flames proposed arena deal. They want to be gifted land, have the public subsidize the construction of the building, keep it free of property tax, AND scoop all of the profits that come from the operation of the building.
Here’s another general problem with the article: oversimplification. By simply reducing the East Village redevelopment and CalgaryNEXT to simply “they both use public funds,” you take the nuance out of the equation. More, uhhh, simply put, oversimplifying the issue allows the author to ignore why one is a good business deal and why one is a bad business deal.
In the East Village, the city pays for and provides access, the developers take on the risk, both stand to benefit. For CalgaryNEXT, the city pays for the majority of it, takes the risk (to see why this is a big issue, click here), and does not profit from taxes or the revenue created by the building (which they own). Reducing the issue to “the city paid/will pay for them” ignores the fact that these two projects are not at all similar.
(Also: revitalizing the East Village has been a major success to this point, so bringing it up as an example of the city irresponsibly spending money seems to be misguided, at best.)
Now, of course, the East Village has all kinds of cultural attractions, such as the music centre and new public library because… well, libraries are the future.
But, there are no knuckle-dragging hockey players or rich team owners there — just trendy elites and rich developers.
Here’s the most ridiculous section of the article. Read it twice for good measure.
First, there’s the weak shot at the new central library, a piece of infrastructure that is public, community building, and has measurable, positive economic impact. There’s a reason the city chooses to spend money on it, and that’s because it stands to benefit the community at large. It seems odd that one can both work under the premise that they are representing the interests of the people and the communal good, but also use their space to defend oil tycoons and rally against libraries.
This is not an issue of class, even though the author tries to frame it that way (he also doesn’t recognize that the rich developers, trendy elites, hockey players, and rich team owners are all in the same boat with regards to class). The city isn’t providing funds to the East Village “trendy elites” because they are “trendy elites,” it’s simply because they provide a better deal for the city, as Kent explained above.
Likewise, the city is not against the “rich team owners” for being “rich team owners” as much as they are against publicly subsidizing them for an investment they will likely never see money back from. They do not want to recklessly spend tax dollars on a project that only benefits a few people. That seems like a fair and rational approach to such issues from the city, and consistent with their behaviour in the other examples the author has brought up.
(Aside: he paints CSEC as victims of the bully city in this article, but never expresses just why he thinks the city has it out for the Flames. Just my two cents, the city is probably not as kind to CSEC [as they should be] because CSEC gave them a terrible option in CalgaryNEXT and then spent more time whining about it in the media than improving it.)
Let’s be clear. Every hockey fan, every team owner, every developer, every trendy elitist is a member of the ‘public’. They all pay taxes and subsidize transit.
Let’s be clear. The Flames’ plan for CalgaryNEXT involved them not paying property taxes. Also, Murray Edwards legally lives in London to avoid paying taxes.
Speaking of transit, there are more people at a single Flames game than there are people using the bike tracks in Calgary. Bike tracks have cost millions of dollars, disrupted traffic and inconvenienced businesses. But, what the heck, they sure are trendy.
This is another good summary of the article: misguided, unrepresentative, non-factual, condescending, barely relevant. The city saved money on bike lanes, 67% of the population approves of them, parking spaces were actually created, and they’re widely used. All of this stuff is easily google-able. The author really does not think highly of his readership.
Factual errors aside, he also falsely equates public infrastructure with private. Anyone can use the bike lanes, and they’re here to benefit the city as a whole by opening up new modes of transportation and theoretically removing cars from the road.
Switching over to the arena, and none of this holds. No one can use the new arena unless the Flames deem that they can, and they likely won’t let you unless they can make a buck from it. It’s property operated privately for profit that no average Calgarian will ever see. This is not what public money should be used for.
I also find it curious that the author labels bike lanes as “trendy,” as if hockey teams teams are not susceptible to the same popularity booms and busts. Sports franchises also rely heavily on public interest to support themselves. Look at the Flames’ attendance before that magical 2003-04 Cup run, and look at it after. That’s an indication of something relying on trendiness and popularity in order to sustain itself. If he believes that bike lanes only have trend appeal and funding them is foolish because that trend status will fade, no one tell him about the years the Flames were bad.
No public benefit? BS. How about hundreds of thousands of people with a common interest that transcends politics, corporate rivalries and other everyday minutiae. Thousands of people wearing their emotions on the sleeves of their Flames jerseys, cheering and jeering as one. That’s uplifting and definitely a public benefit.
One of the things that has plagued this debate is that there is a very loose definition of “public benefit.” Technically, the author is not wrong. This is a public benefit, albeit an emotional one that only exists at certain times of the year (particularly when the team is doing well). This is absolutely true: the Flames do bring the community together and provide a sense of identity for the city.
That’s only one piece of this “public benefit” pie. From my readings, when the mayor speaks about it, he’s talking about money being used for critical infrastructure, public services, city functions, and the like. If the city is going to move money away from these areas, whatever new arena should actually provide economic benefit that recoups these costs. Emotional value is not monetary value. The Flames do provide something intangible to the city, but that will never outweigh the tangible costs involved in propping the franchise up (for actual economic benefits, scroll down a bit more).
A city that won’t support a multi-million-dollar business, which is what the Flames franchise is, certainly doesn’t instil [sic] confidence in potential investors.
The city does support the Flames. Through attendance, through merch sales, through elevation of the team members in the public eye. It doesn’t owe them tax dollars as well, particularly since every economic study on the subject shows that arenas are bad bets for the public.
This is the only instance where the author recognizes what the Flames really are. They are a “multi-million-dollar business” indeed, which raises all sorts of questions. Why does he rally against the developers in the East Village – also multi-million dollar businesses – for not spending their own money, but also expects people other than the Flames to pay for the Flames’ own arena?
That’s kind of the question that hovers around this entire article, but the author never answers. Why should anyone else pay for the Flames’ own arena? Any discussion of this issue, especially one that advocates for public funding for the new arena project, needs to answer this question.
The mayor references studies — without naming or producing the studies — that say there is no public or economic benefit from sports franchises.
- The author has not cited a single piece of evidence to back up any of his claims in this article.
- Here you go:
- The risky economics of sports stadiums
- Why funding sports stadiums can be a losing bet
- Publicly financed stadiums are a game that taxpayers lose
- Publicly funded sports arenas add little to local economy
- Nine out of ten economists agree: sports stadium subsidies are dumb
- Stadium frenzy ignores economics
The mayor has said the CalgaryNEXT project is dead and he doesn’t see any rush to sort out the details of what ‘Plan B’ in Victoria Park would look like. He should be admonished by council for saying both. It’s not his decision. He is only one vote. Council agreed with him.
Of course, the mayor’s main job this year is to get re-elected, and if he’s gambling with the Flames ownership and bluffing to support his re-election, he should know the Flames aren’t bluffing.
They very well could leave Calgary as a consequence. It’s not a threat. It’s a business decision.
Here we come full circle. Despite this “business decision” being the central thesis, the author does not back up any of this. He has convinced no one that the Flames aren’t bluffing, instead using his space to attack Nenshi over other pieces of city governance that he finds annoying (and again, most of these complaints are not based in fact).
I do not agree with the city on all issues, and I definitely think the mayor could stand to tone it down a bit, but those are two issues that are not at all connected to the stadium debate, and exploring the former does not further the latter. The mayor is a bit of a loudmouth. Some of the things the city spends money on are questionable. Regardless, he should still not spend millions of public dollars on a poorly planned arena for the benefit of billionaires.
And he shouldn’t be forced into this position because the Flames are bluffing. Ken King had to admit it after embarrassing himself live on air. There is no feasible destination for the Flames to move to, and there’s no other city that will cave to their demands. There is no immediate choice between an arena and the Flames fleeing town. This entire article is based on a false dichotomy and only functions as a defence for the billionaires who want public money. Do not buy it.
The article is shoddy with facts, rife with emotion, and full of contradictions. It’s a letter to the editor dressed up as critique of city politics. It’s really just an attack on the mayor of Calgary using the stadium issue to grab attention. It’s quite unfortunate because this space could’ve really been used for something better. The author in question is the Sun’s real estate journalist. There was an opportunity for explanations and analysis of other high-end, big money projects. Perhaps he could’ve answered questions about the process. Maybe a historical perspective about the circumstances surrounding the construction of any of the other big sports projects in this city. Instead, we have this.
This would mean nothing if the implications were not consequential. Articles like this are why Kent wrote his critical thinking piece way back when. Until a deal is struck, you will see these shill jobs in public newspapers. They’ll always pretend to be on the side of the fans, but really be supporting the interests of private business. They’ll blur lines, leave out facts, frame it as a high-stakes wrestling match, and strike polemically against big targets.
And it’s working, which is the most unfortunate and dangerous part of it all. People will see players and media members tweet these out and believe that the team is actually packing their bags. Public support moves towards the team, facts and consequences are thrown to the side.
As always: do not take it at face value. Think critically. We are all diehard Flames fans, but this is an issue that goes beyond sports. You should devote more time thinking about the issue than this Calgary Sun author spent writing his article.