The latest Calgary stadium swindle

After a closed meeting behind the backs of the people on July 22, the Calgary city council announced an outrageous pay-the-rich deal with the owners of the Calgary Flames of the NHL for a new 19,000-seat arena. It will be built on current Calgary Stampede parking lots to replace the Saddledome. Details include:

• The city is to pay half the costs, estimated to be $550 million, or $276 million each;
• The Flames would pay all operating and maintenance costs for the arena, which means the owners get away without paying property taxes;
• The city would also get a unspecified percentage of naming rights revenue, amounting to only $2.5 million over 10 years, which is present value of a little under $2 million;
• The city will pay $12.4 million toward demolition of the Saddledome, 90 per cent of the cost;
• The owners sell the naming rights, with a small and unspecific percentage going to the city, estimated to be $2 million. The Maple Leaf Sports and Entertainment (MLSE) oligopoly recently sold the naming rights for the Air Canada Centre to Scotiabank for an unprecedented $800 million over 20 years;
• The city will get a thin trickle of ticket taxes estimated to be $72.5 million; and
• All in all, the city is handing over $219.2 million, plus any potential public share of cost overruns or land cost breaks. [1]

In a deliberate blackmail, Calgary city council is to vote in just one week on July 29 to ratify the deal and approve it without public scrutiny, which is exactly what the Flames owners have been demanding.

Meanwhile, the city is currently looking to cut $60 million in fire, police, and public transit spending. “The optics of this stink. It’s really terrible timing,” admitted Calgary Mayor Naheed Nenshi, who has caved in from his previous opposition. Nenshi had insisted on not putting public money into any project that wouldn’t result in a public benefit.

The proposed new hockey arena gives hundreds of millions of dollars to the (mostly oil) billionaires who own Calgary Sports and Entertainment – and thus the Flames, the Calgary Stampeders, the Calgary Hitmen – and who also manage the city-owned Saddledome.

They are: N. Murray Edwards (owner of oil sands miner Canadian Natural Resources Ltd [CNRL] and aerospace firm Magellan); Alvin Libin (owner of Balmont Investments); Allan Markin (CNRL); Jeffrey McCaig (owner of Trimac); Clay Riddell (owner of Paramount Resources); and Byron Seaman (owner of Bow Valley Industries). Forbes estimates Edwards’ net worth at $1.5 billion. The billionaire maintains a residence in London, England. 

This private clique tried to kick Nenshi out of office at the last civic election, so they could negotiate with someone more team-friendly. The most aggressive member of the city council pushing the scheme is a former employee of Edwards’ oil company. According to his own biography, city councillor Jeff Davison, head of the negotiating committee,  “held various exploration and communications roles at Canadian Natural, one of Canada’s largest oil and gas producers” from 1999 to 2009. He has loudly proclaimed that public debate is a bad idea when you can instead have deals made behind closed doors. Following the private discussion of the council, Davison declared “We don’t need a $2 million engagement plan to take feedback in. There’s many, many ways that the public can let us know how they feel about this.”

That will not include a plebiscite for sure. Calgary had shot down public largesse for sports last November when 56 per cent of residents voted in a plebiscite to reject a $4-billion bid for the 2026 Winter Olympics.

Every professional sports franchise in Canada has been enriched by similar pay-the-rich schemes. [2] The false justification is always boosting the economy, as amply documented and exposed by the website Field of Schemes. The Globe and Mail reported yesterday,

“Decades of economic research show that new sports venues don’t bring much benefit to their cities, said Lindsay Tedds, an assistant professor of economics at the University of Calgary. ‘These projects don’t bring any large, incremental economic boom. The analogy is that they bring about the same amount of new money as a mid-sized department store, so there is some, but the city won’t bounce back with a new arena,’ she said.”

The outcome is a multi-billion dollar stream of revenue being diverted from the public treasury to the sport cartels (NHL, NFL, NBA, MLB, MLS) – all based in the United States and controlled from New York – and the vaults of the international financial oligarchy.

The direct involvement of banks in this sector (BMO Field, Scotiabank Arena, etc.) indicates that these corporate sports monopolies would have no problem in borrowing money privately. The motivation of the rich in seeking privatization of public services and infrastructure is the high rate of return on capital guaranteed by the government in privatization agreements. These arrangements also provide opportunities for fraud and corruption at the public expense. When the rich seize the public sector as a market for investment it gives them relief from their problem of the falling rate of return on capital, a constant of the capitalist system. The rich are especially motivated to seek guaranteed high returns on public sector investment during crises when opportunities for making big scores on other kinds of deals and swindles have dried up.

With files from Dougal Macdonald, Neil deMause of fieldofschemes.com and The Globe and Mail

Notes

1. More details are available in this document: https://pub-calgary.escribemeetings.com/FileStream.ashx?DocumentId=99772

2. The Calgary deal is pretty close in percentage terms to the $311 million in public money toward a $676 million arena that Edmonton spent on the Oilers, to much popular consternation. The Oilers’ owner put up a mere $24-million in cash for the arena (Rogers Place) and will cover a further $138-million in lease payments over the next 35 years. The remainder of the cost will be covered by new taxes, a ticket tax and municipal spending. The province and federal government also put up $7-million each.