Uppity Peasants weighs in on Calgary Arena ultimatum. City given 1 week to accept deal, or the Flames may leave altogether. Not the most eloquent response in the tweet, but the point is clearly made. There are far more important things cities need than to be financing new stadiums or new arenas.
In a broader sense: to what degree should the public be financing private events or teams?
1. Important Links
CLICK HERE, for $5.23B Calgary Olympic bid estimate.
CLICK HERE, for the $17.7M cost of Calgary’s Olympic bid.
CLICK HERE, for Montreal’s Olympic costs, 40 years on.
CLICK HERE, for Forbes article. Stadiums are a game that taxpayers will always lose.
CLICK HERE, for the subsidy drain of “public” sports teams.
2. Flames Show Calgary No Loyalty
And to rub salt in the wound, the article closes off by saying this.
Apparently Calgary was $300 million for a new arena for the Flames to play hockey, but $60 million had to be cut from city services. Does this seem like a fair use of taxpayer dollars?
It’s not as if the Flames don’t have an arena to play in. They do. They just want a newer and better arena. What better way to turn off your fanbase by threatening to abandon them in what amounts to a shakedown?
Fair question to ask: does it serve the public to be pouring limited dollars into areas which a very small percentage will actually use? Wouldn’t it be better to spend it on things like: hospitals, fire services, and road maintenance? This is a theme that will come up throughout the article.
3. Olympics Are A Money Pit
Continuing to use Calgary as an example. Let’s note that the city bid to host the 2026 Winter Games, at was to be an estimated cost of $5.23 billion.
The costs would be allocated:
- $1B from the city of Calgary
- $1B for the Province of Alberta
- $1B from the Federal Government
- Rest from private sponsors
The bid was eventually shot down when a majority of Calgarians voted against it. While there was agreement there would be a temporary boost to the local economy, concerns lingered that the debt would never fully be paid off
However, even to “bid” on the games ended up costing over $17 million. Just to make an official bid.
This was just “to bid on” the Olympic games for 2026. It should also be noted: the Alberta and Federal Governments (or rather, taxpayers) coughed up about 2/3 of that bill. Even if the bid were successful, it is an event that areas outside of Calgary would not actually benefit from.
For a Canadian example, let’s take Montreal, which hosted the 1976 Summer Olympics. It cost (in today’s dollars), about $4 billion. So comparable to the proposed situation with Calgary. From the Globe & Mail:
The article notes that it needs a constant infusion on cash in order to be maintained, removing is impractical. The few events that it hosts annually come nowhere close to making it a viable enterprise.
43 years later, Montreal still has the regret. But at least tourists can get their pictures taken.
4. Stadiums In General Fleece Taxpayers
This Forbes article debunks the notion that building stadiums or other arenas are a boon for public coffers. It is based on 2 main reasons: economic activity doesn’t not equate tax revenue, and money spent here can’t be spent elsewhere.
A valid argument. Just because people may come from out of town, it doesn’t mean all (or even most) of their money will be going to that sporting event. Very little may. Also, there are extra public costs associated with the running the stadium.
Also true, but very obvious. If a person (or family) is spending money on an overpriced sporting event, is that not money that would still have been generating economic activity anyways?
One more consideration: the average person cannot afford to attend professional sports events other than very rarely, if ever. So is it fair to force them to chip in for something they might never be able to be a part of?
5. Reality: It’s Always Subsidised
From the NPR article, it makes the “public cost, private profit” argument. Interestingly enough, that is the same logic used to object to bank bailouts in 2008/2009.
Yes, a small number of people will get very rich off of starting and running a sports team. However, the public will keep paying, regardless of the percentage who are actually interested in the event.
One additional piece the article left out is the cost overruns. Construction projects are almost never completed on time and are typically well over budget. Contract language varies, but typically it is the public who eats the losses.
Sports fanatics would argue that the city or national prestige is worth it. However, those who have little interest would see it as a waste.
6. What Is City Or National Pride Worth?
This is something that each person has to answer on their own.
For the most diehard fans, this is worth it. For the average person, I suspect not.
Objectively speaking: “public” teams with private owners are always a losing deal financially for taxpayers. They require endless subsidies, cater to a niche crowd, and don’t offer anything concrete to the public. At best, a small number of seasonal jobs will be created. The tax revenue generated comes nowhere close to what the subsidies cost.
As seen with the Calgary Flames (though there are other examples), threat to pull a team from a city is a form of economic extortion. For most people it is an empty threat, though politicians will often cave.
When public services get cut to pay for sports events or subsidies, that is when people get angry.