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05-15-2013, 02:46 PM
  #112
worraps
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Join Date: Oct 2011
Location: Edmonton
Country: Canada
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Quote:
Originally Posted by TrevorK View Post
That's an incorrect assumption. Do gas prices going up cause you to consume less gas or do you just buy the same as you always do? Supply and demand is much more complicated.
The ticket tax comes from the seat holders and does not necessarily affect Katzs bottom line one bit.
This really isn't as complicated as you think it is. For example:

I am willing to pay $250 to go to an Oilers' game in a new arena. I don't really care whose pockets that $250 ends up in: Katz's or the City's. I just want to exchange no more than $250 for a ticket to an Oilers' game in a new arena. For the sake of argument let's assume everyone else has the same demand curve as me.

If a new ticket tax is suddenly introduced (let's say 5%), I'm still only willing to pay $250 for my ticket so either Katz reduces the price to $238.10 or I and everyone else stop going to Oilers games. This represents a very real decline in Katz's wealth.

If you want to introduce the supply side of the argument, here it is: Katz needs more revenue (bigger arena, other event revenue, even higher prices) to continue supplying the City of Edmonton with NHL hockey.

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