Corporate Tax break cuts could jeopardize Sens Franchise

I heard about this on the radio this morning and felt it was thread worthy. The Ontario Finance Minister wants to eliminate tax write-offs for things like luxury boxes at sporting events which could lead to Ottawa no longer being a financially viable location for the Sens.

http://www.ottawacitizen.com/sports/Senators+future+doubt+Ontario+revokes+ticket+writeoff+Leeder+says/6230463/story.html

http://www.ottawasun.com/2012/02/29/sports-fans-to-benefit-from-tax-break-demise

Sounds a bit "doom and gloom" how Leeder says the franchise could fold.

I mean fold ? really ? Is Rod Bryden running the team again ?

Hoags wrote:Sounds a bit "doom and gloom" how Leeder says the franchise could fold.

I mean fold ? really ? Is Rod Bryden running the team again ?

That's the first thing I thought. A little extreme there Leeder, I thought I was done hearing about the sens folding after Rod Bryden was gone.

hehe. If this excerpt doesn't say it all about how toronto centric this idea is, then I don't know what does. This is from the citizen article cap'n posted:

Duncan described the move as one that would benefit ordinary people in the provincial capital.

“Hopefully Leafs tickets will become affordable for families,” he told reporters, referring to the Toronto hockey franchise. “I know when a mom and dad take their kids out to a Leafs game, they don’t get a tax break. So it’s about priorities.”

At $123.77, the Maple Leafs have the highest average ticket price in the 29-team league, according to Chicago-based sports information agency Team Marketing Report.

Ottawa’s average ticket price, by comparison, is $55.51 – the lowest among all seven Canadian NHL teams.

Asked whether he thought ticket prices at Senators games were inflated, Duncan replied: “I’ve never been to a game in Ottawa actually.”

Leeder said Duncan “should remember that there’s more than one team in Ontario.”

“I think that’s the most disturbing thing here,” he said. “We weren’t consulted at all. We didn’t get a phone call until five minutes before there was something released to the public. If you’re really trying to find solutions, you would think you would talk to your constituents about where the solutions are.


Read more: http://www.ottawacitizen.com/sports/Senators+future+doubt+Ontario+revokes+ticket+writeoff+Leeder+says/6230463/story.html#ixzz1nsSCW542

Hoags wrote:Sounds a bit "doom and gloom" how Leeder says the franchise could fold.

I mean fold ? really ? Is Rod Bryden running the team again ?

Geez, give us all a break. We know you're upset, but it ain't folding.

Duncan described the move as one that would benefit ordinary people in the provincial capital.

“Hopefully Leafs tickets will become affordable for families,” he told reporters, referring to the Toronto hockey franchise. “I know when a mom and dad take their kids out to a Leafs game, they don’t get a tax break. So it’s about priorities.”

You can inflate the price of tickets that will get tax cuts to sort of subsidize cheaper price points for the Regular Joe going to the game too.

Just another example of making the "sexy" headline-grabbing tax cut that accomplishes nothing.

Hoags wrote:Sounds a bit "doom and gloom" how Leeder says the franchise could fold.

I mean fold ? really ? Is Rod Bryden running the team again ?

Very alarmist. If this change will cause the Sens to "go under" then there are some serious financial management issues going on there.

The concern is that if the tax breaks go away, then the clients will go away and they'll be forced to lower prices or have empty suites.

Are they that dependent on the money generated by tickets and luxury suite sales to corporate customers? I wonder how much of the income that piece represents.

shabbs wrote:

Hoags wrote:Sounds a bit "doom and gloom" how Leeder says the franchise could fold.

I mean fold ? really ? Is Rod Bryden running the team again ?

Very alarmist. If this change will cause the Sens to "go under" then there are some serious financial management issues going on there.

The concern is that if the tax breaks go away, then the clients will go away and they'll be forced to lower prices or have empty suites.

Are they that dependent on the money generated by tickets and luxury suite sales to corporate customers? I wonder how much of the income that piece represents.

According to the two articles I read

1 - All suites and luxury boxes are owned by corporations - Will they continue to buy these suites if they can't write it off anymore??

2 - 50% of all other Season seat holders are companies that make use of this tax write-off. How many of those companies will continue to buy those seats?

shabbs wrote:
Are they that dependent on the money generated by tickets and luxury suite sales to corporate customers? I wonder how much of the income that piece represents.

I would say the Sens are fairly dependent on money generated by ticket/suite sales to corporate customers. Take a stroll around the 100s and check out the name plaques on the season seats...a lot of them are companies. Couple that with all the suites being owned by companies, and yeah, this could be a big deal.

tim1_2 wrote:

shabbs wrote:
Are they that dependent on the money generated by tickets and luxury suite sales to corporate customers? I wonder how much of the income that piece represents.

I would say the Sens are fairly dependent on money generated by ticket/suite sales to corporate customers. Take a stroll around the 100s and check out the name plaques on the season seats...a lot of them are companies. Couple that with all the suites being owned by companies, and yeah, this could be a big deal.

Yup. And we know how the rich operate: If they have to actually pay for something they don't buy.

A lot of things a play here. As I said before, I don't think The Gene is generating any income outside of hockey right now that's why we're near the cap floor more than anything.

If the Gene truly isn't generating income from other sources then this team will be sold not too long from now I would think.

Cap'n Clutch wrote:If the Gene truly isn't generating income from other sources then this team will be sold not too long from now I would think.

He likes his toys too, though. I wouldn't say he would sell just yet but he can't afford to lose much, if any money.

That dunce Duncan thinks TML will lower ticket prices if the government removes the 50% tax break for corporations buying sporting tickets.

Did he think before he said that? Do we actually think Rogers/Bell would want lower revenue from gate receipts. Another big question.. did the Teacher's Pension know this was going to be requested -- that is why they sold the team?

Big corporations in Toronto will find another way to write off the tickets if this does go through.

But was any thought given to the OHL teams and the revenue they get from small business owners who won't be able to continue if they lose this tax break?

Will this go Canada wide if the Feds do agree... Will Winnipeg be gone after just getting there. No Quebec Nordiques... What about Edmonton? What about another team in Southern Ontario.

If the Sens do leave... the revenue they get from eliminating this will be lost by the revenue not generated by the Sens being in Ontario... the lost income tax from the players, employees of the team... By the small businesses in the area that will have trouble if the team leaves.

The corporate donations through the Sens Foundation in the community.

Remember the lockout.. how small business in Kanata suffered as well as others in the City.

I assume McGuinty and his cronies looked no farther than Toronto... it affects the rest of the province as well.

Cap'n Clutch wrote:If the Gene truly isn't generating income from other sources then this team will be sold not too long from now I would think.

I thought he generates a lot of money from the arena and capital tickets. The Sens don't make money but all the other revenue generated by SBP more than makes up for the hit to Melnyk's bottom line.

When SportsNet started a rumour that he'll sell the team, he said he'd never do that unless support would totally dry up here.

Yesterday on Team 1200 Leeder actually said renewals are up for next season (no surprise due to the team success) so I think they are doing better financially.

We're at the floor because it makes no sense to spend that much if we;re not a Cup Contender, Melnyk said in the past he's learned that lesson, we've been a cap team for years and nothing to show for it. We'd have to make it to the 2nd round (and beyond) I think to make a profit when at max salary cap.

Cap'n Clutch wrote:
According to the two articles I read

1 - All suites and luxury boxes are owned by corporations - Will they continue to buy these suites if they can't write it off anymore??

2 - 50% of all other Season seat holders are companies that make use of this tax write-off. How many of those companies will continue to buy those seats?

I think that's the worry, our corporate and season ticket support would dwindle.

Funny how the Government wants to do it and trying to justify it thinking the Leafs prices will drop ?? Hello ? there's another team in Ontario ???

Cap'n Clutch wrote:

shabbs wrote:

Hoags wrote:Sounds a bit "doom and gloom" how Leeder says the franchise could fold.

I mean fold ? really ? Is Rod Bryden running the team again ?

Very alarmist. If this change will cause the Sens to "go under" then there are some serious financial management issues going on there.

The concern is that if the tax breaks go away, then the clients will go away and they'll be forced to lower prices or have empty suites.

Are they that dependent on the money generated by tickets and luxury suite sales to corporate customers? I wonder how much of the income that piece represents.

According to the two articles I read

1 - All suites and luxury boxes are owned by corporations - Will they continue to buy these suites if they can't write it off anymore??

2 - 50% of all other Season seat holders are companies that make use of this tax write-off. How many of those companies will continue to buy those seats?

It's not like the tax write-off is 100%. They get a break, no big deal. They can always donate tickets to charities and get a charitable contribution for the face value, which is less than what they paid. There are ways.

Didn't the article state that removing this tax break would result in about $13M for the province? This includes hockey tickets as well as arts and other entertainment. Even if it was *all* hockey, the ACC tickets are more than double the cost of SBP, so only about a third of that $13M would be in Ottawa. We are not talking about a ton of money, here.