Gary Bettman’s push for public funds for Calgary Flames arena - for benefit of wealthy owners - displays next-level gumption

nationalpost.com
Jan. 12, 2016
By Scott Stinson

Gary Bettman has become so comfortable selling a message that if you introduced yourself to him, he could tell you your name was something else and sound pretty convincing doing it.

Me: “Hi, I’m Scott.”

Bettman: (shakes head dismissively) “I dispute the assumption. You are Juan Carlos.”

This is the same NHL commissioner, after all, who routinely says that the game is the most exciting it has ever been, even as scoring approaches the levels not seen since before the advent of the curved blade, and that league-wide finances are in great shape, even as Florida arranges a municipal bailout and Phoenix, again, considers a move to a new arena.

But even by his standards, Bettman’s visit to Calgary this week to promote a proposed new arena displayed next-level gumption. The CalgaryNEXT project, a billion-dollar concept from the Flames’ owners that would include new stadiums for the city’s hockey, football and lacrosse teams - all of which are owned by the same group - as well as major commercial development and community facilities, was announced in August and is still in the research phase. But city officials, notably Mayor Naheed Nenshi, have been cool to the idea of a public-private partnership, and Bettman says he just cannot understand that.

CalgaryNEXT, Bettman said with a perfectly straight face in one television interview on Monday, “is about quality of life.” Yes, don’t think about it in terms of subsidizing the operations of a private, for-profit enterprise owned by several wealthy individuals, just remember that you are buying your own happiness. Don’t you want to be happy, Calgary?

Elsewhere, the commissioner dismissed the idea of building an arena without public funding as though it was some kind of magical fairy tale. “If your attitude is, ‘This all has to be private (funding)’, then it never gets done because it’s not an investment that’s cost-justified,” Bettman said, as reported in The Calgary Sun.

It’s an interesting line for a couple of reasons. One, it’s not true. Montreal, Vancouver and Toronto all built NHL-sized arenas without using public funding. And two, the idea of an arena being “cost-justified” is a neat bit of distraction that obscures the reason behind building a new stadium in the first place. Arenas, it is true, are infamously lousy investments on their own. They are expensive to build, costly to maintain, and usually sit empty far more often than they are full. This is why sports owners are often quite happy to let a municipality own a new arena; the city thinks it is gaining a valuable new asset and a few short years later it realizes it bought a lemon.

But teams want new arenas because they provide many new revenue streams for the team in question: luxury suites, seat licenses, bars, shops, basically everywhere but the loo is set up to steer money toward ownership. If the public can help offset the initial investment in such a facility, all the better for the team. And, when the new building is completed, the value of the team is instantly much higher. That supplements the growth in franchise values that has already been driven by the huge jump in broadcasting fees. The Florida Panthers, bought in the early 1990s for a US$50-million expansion fee, were sold two years ago for US$250-million, and they are either near or at the bottom of the league’s franchise values. Forbes magazine estimates the Flames are a US$435-million entity, with the 11th-highest annual revenues (US$130-million) in the 30-team NHL, although the Canadian teams will all have taken a further hit from the sagging dollar.

But the Flames are worth that amount, and take in that kind of money, despite being, as Bettman noted repeatedly on Monday, the last team in the NHL to get a new arena. It’s not hard to imagine the franchise jumping by US$100-million or $150-million in value the moment a new building was completed. That would certainly improve someone’s quality of life.

Mayor Nenshi seems to have struck a nerve when he all but thumbed his nose at the commissioner, declining a meeting and saying on Monday that council wasn’t about to hand the Flames’ owners a cheque based on a “back-of-a-napkin” proposal. But there’s a reason to proceed cautiously: once a sports franchise tells a city that it needs public money for a new arena, and a city agrees to enter discussions about it, the only thing that’s left to settle is the number. The scope of the project might change, maybe a park and a community centre will be thrown in, there could be a new special tax added that will make it seem less like the city’s general funds are being raided, but in the end the team owners have a far better deal than if they had built the place themselves. And the taxpayers will have forgone whatever else could have been done with that money, or that land.

This is how the process goes. The only thing unusual in Bettman’s pitch to Calgary was that he could only offer vague consequences if the city doesn’t get on board with CalgaryNEXT. “The people will have to deal with that,” he said. What “that” was, he couldn’t say. Asked if the Flames could move, he said he was not suggesting that.

Which makes sense. The relocation threat usually comes much later.