I grew up in Calgary in the 1980s and became a huge Calgary Flames fan at a young age (’89 baby!). The Flames organization, like many Canadian sports teams, struggled in the 1990s as the league expanded and the Canadian dollar sunk below 70 cents (player wages are paid in U.S. dollars).
By 1999, attendance had fallen off severely, prompting owners to issue an ultimatum: buy more tickets or the team would relocate to the U.S. The appeal worked, for the most part, and by 2004 the Flames returned to the post-season with one of the most memorable Stanley Cup playoff runs in history. The Saddledome has been sold-out ever since, but now the club’s ownership group is pushing the City of Calgary for a new arena.
It’s a compelling argument on the surface. A brand new arena will attract world class events and provide the city with a shiny new jewel in the heart of downtown Calgary. But the argument breaks down when it comes to funding the arena.
The ownership wants to put the bulk of the build on Calgary taxpayers while maintaining free use of the land (i.e. no property taxes), plus keeping all the arena revenues for themselves. The City of Calgary countered with a balanced proposal that would see the $555M project cost split three ways between the City of Calgary, the Flames ownership group, and the users of the facility through increased ticket prices ($185M each).
Meanwhile, Garth Brooks didn’t do the Flames owners any favours when he played seven sold-out concerts in the ‘dome earlier this month.
Despite claims that cities benefit from subsidizing sports arenas, economists aren’t buying it. In fact, Trevor Tombe, an associate professor of Economics at the University of Calgary (and one of the smartest guys on Twitter), said the research is clear there aren’t aggregate benefits of such subsidies for the city as a whole.
Tombe went on to say that public subsidies for professional teams usually only benefit political careers of city politicians.
“Cynically, I would phrase it as it provides a very good photo op.”
So, the unpopular opinion of this sports fan is that cities should stop caving to the demands of billionaire owners and league officials to subsidize new arenas and stadiums. The City of Calgary did the right thing here and I’ll bet the Flames come around in time.
Other unpopular opinions
At the risk of alienating half our readership, here are some other unpopular opinions I share:
- Raising minimum wage won’t be the kiss of death for business.
- Tax reform on private corporations won’t crush the dreams of entrepreneurs or send all our doctors south of the border.
- Universal basic income is an idea worth exploring (pilot projects are underway).
- Renting isn’t throwing your money away.
- You don’t need a university degree (or Master’s, for that matter) to have a successful career.
Happy to discuss in the comments below!
This Week’s Recap:
On Monday I explained how to trick your primitive lizard-brain into saving more money.
On Wednesday Marie explained what you need to know to convert your RRSP to a RRIF in the year you turn 71.
And on Friday Marie offered some retirement planning advice for singles.
I hope those of you that grabbed your free ticket to the Canadian Financial Summit got a chance to take in the interviews and presentations this week. It was extremely well done, so hat’s off to Kyle and Justin at Young & Thrifty for pulling this off.
Frank Wiginton explains why you may have all you really need to retire.
A strange yet interesting read on what the rich won’t tell you, written by socially professor Rachel Sherman for the New York Times.
Rob Carrick hit close to home with this article on how to get ahead when your income is hardly growing. I especially enjoyed this part:
“If you want to build wealth, regular investing in financial assets such as stocks and bonds is crucial in a world of weak income growth. A low-cost, diversified portfolio could conceivably produce average annual returns of 2 or 3 per cent after fees and inflation. Invested money grows like you wish your paycheque did.“
Dan Bortolotti on how ETF investors sabotage themselves. The problem isn’t your funds; it’s your behaviour.
MoneySense’s Romana King explains how to avoid selling your home at a loss.
This reader’s mom left him the house when she died suddenly three years ago. The day after she died, one of his brothers threatened to sue him for his share of the inheritance. What does he owe his two brothers?
65% of Canadians made a contribution to either a RRSP or a TFSA in 2015. That’s great, but I wonder how many people made a contribution, only to withdraw it a short-time later for another financial need (or want)?
A reader asked CFP Jason Heath how risky are robo-advisors. The answer is they’re not dangerous or safe – the risk lies in the investments you hold. Just don’t worry about robo’s running off with your money.
Million Dollar Journey author Frugal Trader was recently laid off from his government position – a situation that has this millionaire pondering the next stages of his life and career.
Finally, a nice profile of Canadians who didn’t finish university or college degrees – and have zero regrets.
Have a great weekend, everyone!