The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
Reform was a bunch of extremists cooks [sic] who had tunnel vision when it comes to any spending matters, so I guess in a sense your statement does fall into your ideology.
Yeah... we were advocating eliminating the deficit, before eliminating the deficit was considered "cool". Back then it was "an extremist idea".
Quote:
Originally Posted by coladin
It is not bribing. Pfft...for real? Well, maybe to angels and naive people out there, it may come off that way. Business has been carried out this way for centuries, I can see why you may have a problem with this.
Other than defacto bribery, I don't see a logical reason for taking a client to a hockey game. Are you seriously arguing that a transaction could not be conducted in a small boardroom?
Quote:
Originally Posted by coladin
If I have to explain this to you, you might as well move to Cuba or China. Capitalism baby.
Within the limits of the law, you're free to spend YOUR money as you wish. When you insist on spending MY money, expect resistance. The tax write-off on hockey tickets is merely a roundabout way of doing what Glendale, Arizona has been doing the past 2 years.
You also seem to have conveniently snipped off part of the question:
Wouldn't using other advertising "rob" the taxpayer even more because those expenses are fully deductible?
I don't think they are totally different concepts, and I asked you to explain the difference. If you can't explain the difference, then we aren't actually arguing, it's just you making statements you can't support.
Advertising... making your product/service known to potential buyers, e.g. via TV commercials, ads in trade magazines, etc.
Entertainment... wining and dining a potential client, taking them to a restaurant/hockey game/round of golf/whatever.
No, they aren't. A few luxury boxes unsold at one of (if not the) highest price point in the league with a team that hasn't made the playoffs in 8 years. I doubt anybody in MLSE is fretting over it and I sincerely doubt they are really fretting over this proposal by McGuinity and co.
They haven't made the playoffs in 6 years. You can't really count the lockout year and this year isn't over yet.
This will be great for the Leafs, we'll actually have a full house of our true fan base. Ottawa however, this is pretty bad news. When you take away half of a teams revenue stream, it's death.
What do you mean "non-financial"? The boxes are all completely financial. Itis all about the write off. Why would anyone get a box to watch a game if you don't benefit from the expense?
I am a VP of a Corporation. I know, i shouldn't be socializing with the likes of high school guys, but I love my hockey team and as a business owner who has seasons and utlilize these tickets for my business, I can see a lot of people getting out of the hockey expense without the tax write off. As I said earleir, I spoke to a few box owners who already stated that either they won't or the BOD won't allow it. They are not increasing prices on boxes when they can hardly find people to take them as it is.
Please don't play the social status card. I have no clue who you are, and you have no clue who I am. That's how it goes on an internet forum. If you assume anything about who I am, your loss.
Back to the argument, you're backtracking, and trying to have it both ways. You're the one who said boxes made zero financial sense (post #66). I never claimed that. I thought that claim was inconsistent with virtually all your other posts in this thread, where you are justifying why entertainment expenses actually do make financial sense (which I agree with). Implicit in my argument is that those boxes DO make financial sense, and if the cost was increased by 3-7%, they would probably still do. You're saying they no longer do? Fair enough, but that puts a dent into the whole "those expenses are very important for conducting business" argument. If they no longer make any sense at all after a 3-7% hike in cost, they weren't very important to begin with.
As a Canadian, I can assure I have no problem with governments supporting local industries through various means. I also have no problem with governments withdrawing certain aspects of said support. It is up to the particular voters in such location to decide if they support such things. Unfortunately for Glendale, state law pretty much prohibits such. If it mattered to a majority of Arizona voters, I suppose the law would be changed. While some people like to say Canadian this and American that, it really is a heck of a lot more local than that.
They haven't made the playoffs in 6 years. You can't really count the lockout year and this year isn't over yet.
As a fan, I have every right to count the lockout year. I haven't seen a playoff game since March 2004. Thats coming up to 8 years, is it not?
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Originally Posted by Gnashville
But Canadian teams don't get one dime from their Government or any help selling tickets
Neither the Leafs or Sens are getting a dime from the governments in this case. Might want to read the article, or heck, read the title: Ontario businesses may lose ticket writeoff.
When you insist on spending MY money, expect resistance. The tax write-off on hockey tickets is merely a roundabout way of doing what Glendale, Arizona has been doing the past 2 years.
It hardly seems credible to attempt to draw a parallel between Glendale taxpayers being asked to transfer revenues, through whatever ingenious mechanism, to one business owner vs. Ontario’s general business accounting rules. Goldwater isn’t attempting to target business expense deductions as far as im aware.
When Bryden was still the Senators owner, his bold and clever strategy for attempting to financially engineer his purchase of the Sens and building of an arena even though he really didn’t have the money to do it, came very close, but eventually he ended up almost half a billion in debt, and none of it really because of player salaries spiralling out of control or the lack of a salary cap.
Bryden in the end, tried to create an elaborate tax plan where he would bundle that debt as if it were a labour sponsored mutual fund that when sold to a particular class of rich investors could be used to gain a significant tax write off. Bryden also being very well politically connected actually got cabinet level support for this ‘bold’ plan.
For 4 days, until the media and public got a whiff of it. And then there was an uproar and rightly it was shot down forcefully. That I’d think, would be far closer to the Glendale situation , calling for a revenue transfer to a private business could perhaps more honestly be described as spending MY money.
When we got a new owner with a sound financial model to buy the team at full price and the arena at 15 cents on the dollar, even though Melnyk had the money to buy it outright, the team is still listed as in debt for its entire purchase price and unfortunately not making any profit to pay federal taxes on. Pro Sports teams seem to need to be in debt and operating at no profit in order to maximize the wealth of the owner and his leverage in cba negotiations. But the death of that tax plan meant the end for that owner, not the end for that team. A distinction owners are anxious to ensure fans don’t make.
But when we change the tax code to target particular spending incentives in how we wish to encourage the economy and raise tax revenue, it seems improper and incorrect to describe that as spending MY money.
First of all, that assumes that tax revenue is YOURS, and you have a right to it, and as a Reformer that should be anathema to you. And 2nd of all, it assumes that such a business taxation deduction is spending your money and not raising it. It’s not always an issue of absolutes.
You know what we really need though? A salary cap with linkage. That way, if revenues for a team drop then salaries drop and revenue sharing increases so that expenses are still 57% of salaries. I don’t see why everyone cant see that that is an obvious and sure fire solution to our problems worth shutting the game down for a year to finally get right once for all.
But I wouldn’t underestimate the power of write-offs to influence decision making. A large portion of that money previously spent on tickets will be redirected by businesses using that ledger account to where the write-off still applies. As intended and expected by such a decision.
He plausibly suggests the Sens are valued at $201m from its $93m purchase price 9 yrs ago. Doubling in value in the last 9 yrs, is that good?
Meanwhile, the general PR talking point taken for granted about the Sens is that they are losing money or not making a profit each year when they struggle.
Seems hard to reconcile the last two paragraphs.
If the Sens are the only team in the NHL that have to endure this tax code change, then obviously that puts us at a disadvantage. Whether that's enough to drive us out of business or just force us to become a low revenue team requiring revenue sharing to survive below the cap midpoint remains to be seen.
If every team though were to operate under such a tax rule, well it would force a change in the NHLs preferred business model which calls for heavy public subsidy in many different areas from ticket write offs to public subsidies to build infrastructure, property tax discounts, special depreciation rules for sports teams, and on and on and on. If it wasnt for all these tax breaks, players and owners would barely earn more than strippers.
He plausibly suggests the Sens are valued at $201m from its $93m purchase price 9 yrs ago. Doubling in value in the last 9 yrs, is that good?
Meanwhile, the general PR talking point taken for granted about the Sens is that they are losing money or not making a profit each year when they struggle.
Seems hard to reconcile the last two paragraphs.
If the Sens are the only team in the NHL that have to endure this tax code change, then obviously that puts us at a disadvantage. Whether that's enough to drive us out of business or just force us to become a low revenue team requiring revenue sharing to survive below the cap midpoint remains to be seen.
If every team though were to operate under such a tax rule, well it would force a change in the NHLs preferred business model which calls for heavy public subsidy in many different areas from ticket write offs to public subsidies to build infrastructure, property tax discounts, special depreciation rules for sports teams, and on and on and on. If it wasnt for all these tax breaks, players and owners would barely earn more than strippers.
Given that the team was bought basically out of bankruptcy, its doesn't surprise me that the value has jumped.
I guess it depends on what the $201 mil number represents. If that represents the value of the team and arena combined, then, yes, perhaps so. I've never heard a number lately of what the arena was valued at you?
The team they claimed was originally bought for its rational market price of $90mil, it was the arena, (that was owned by a bankrupt energy company that was Brydens former partner he forced into bankruptcy), that had to make a decision whether to sell its arena holdings to Melnyk for $30 mil or risk getting nothing if the Sens move to Portland.
Im sure the arena has improved in value due to buying it out of bankruptcy, although i've never heard that number quoted or even asked about, but the teams price i'd think must be separate from that given the stated financial structuring of operations. Its price is its rational market price, whatever rational means in this highly secretive, public subsidy dependent industry.
Neither the Leafs or Sens are getting a dime from the governments in this case. Might want to read the article, or heck, read the title: Ontario businesses may lose ticket writeoff.
I haven't seen this much tap-dancing outside of Youtube clips of "Riverdance". Think of this as "tax money laundering". Businesses get tax breaks which they pass along to sports teams. And if the Sens really weren't getting any money from this then why is the Senators' president whining so much about ending the tax break???
I haven't seen this much tap-dancing outside of Youtube clips of "Riverdance". Think of this as "tax money laundering". Businesses get tax breaks which they pass along to sports teams. And if the Sens really weren't getting any money from this then why is the Senators' president whining so much about ending the tax break???
No team gets any money from the gov what happens is a company writes off part of the ticket be it at a sports event or a festival etc another thing the write off does not just apply to sports and festival if you go to a thearter you can write it off or if a company takes someone to a golf course part of that they can write off.
MountainHawk
This is ontario wide not just ottawa you go sports events you can write part of the ticket cost off even if you go to festivals etc the team don't get support from ontario company's get a break this has been going on for 80 plus years.
First of all, that assumes that tax revenue is YOURS, and you have a right to it, and as a Reformer that should be anathema to you.
This is wealth-redistribution/social-engineering or whatever euphemism-du-jour is in nowadays. The tax break is not financed out of thin air, it's financed by higher tax rates for everybody else. That money comes out of our pockets.
I haven't seen this much tap-dancing outside of Youtube clips of "Riverdance". Think of this as "tax money laundering". Businesses get tax breaks which they pass along to sports teams. And if the Sens really weren't getting any money from this then why is the Senators' president whining so much about ending the tax break???
Your usage of the term "tax break" is incorrect. A tax break means that something that would otherwise be taxable is legislated out, or a credit is legislated in. In this case a normal business expense has been removed as a deduction.
While we're here can we try the previous questions again:
Wouldn't using other advertising "rob" you of your money even more because those expenses are fully deductible? Your statements on the subject indicate you are in favor of the government collecting less of your money from businesses that were engaged in entertaining clients at hockey games.
Also, while you gave a commendable definition of the concept of advertising versus entertaining clients, you still failed to explain how one of these is a more legitimate business expense than the other. Reminder: We've already determined that the entertainment expenses in question are not "highly-illegal" or any other kind of illegal.
Leaf tickets will still sellout albeit at a cheaper price. Ottawa however........
a few years ago a company I worked for had a box a the canuck games. We gave clients tickets to concerts, games and what not. Other boxes were half empty. It is a legit business expense. If they get rid of the this write off, then nearly every write off should be gotten rid off. I handled guest relations for the box and I saw first hand multi-million buck deals start to take structure and then about a month later it would be in the news.
There are so many write off out there that the governments would find themselves looking down lawsuits and in court to explain how a £5000 dinner can be written off 100 times over, but not tickets to a game?
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There are countless write offs from sports and concerts etc to meals then basic thing such as computers and other office items sure big companys might be ok with out write offs but small companys would have a hard time.
No team gets any money from the gov what happens is a company writes off part of the ticket be it at a sports event or a festival etc another thing the write off does not just apply to sports and festival if you go to a thearter you can write it off or if a company takes someone to a golf course part of that they can write off.
Exactly, this is not something that was put into place to benefit the Leafs or Senators. It was put in place to benefit businesses (Is it needed at the end of the day? I'm not so sure). Do Ontario's NHL teams indirectly benefit from it? Yes. Are they the only ones? No, in addition to the businesses, the tax credit can be used for a myriad of different entertainment options where a deal could theoretically be brokered.
This isn't a subsidy for Melnyk and MLSE, especially when comparing it to others around the league, as some in this thread have tried to do. Indirectly benefiting from a tax write-off for corporations should not equal getting handed millions of dollars per year to stay solvent (Nashville, Phoenix, Columbus).
Exactly, this is not something that was put into place to benefit the Leafs or Senators. It was put in place to benefit businesses (Is it needed at the end of the day? I'm not so sure). Do Ontario's NHL teams indirectly benefit from it? Yes. Are they the only ones? No, in addition to the businesses, the tax credit can be used for a myriad of different entertainment options where a deal could theoretically be brokered.
This isn't a subsidy for Melnyk and MLSE, especially when comparing it to others around the league, as some in this thread have tried to do. Indirectly benefiting from a tax write-off for corporations should not equal getting handed millions of dollars per year to stay solvent (Nashville, Phoenix, Columbus).
If it was not for the write off many business would not be able to last sure maybe the write off could be better but over time they have got better at one point you could write 100% of your meal now its 50% i know its easy for some just to look at the sports and say why are they getting this perk while there are so many write offs sports is a small part of it.
As a fan, I have every right to count the lockout year. I haven't seen a playoff game since March 2004. Thats coming up to 8 years, is it not?
Neither the Leafs or Sens are getting a dime from the governments in this case. Might want to read the article, or heck, read the title: Ontario businesses may lose ticket writeoff.
Please Note the sarcasm smiley They are being helped with this tax-write off deal by the government. Change the location to Florida and people would be claiming this to be a subsidy. People would openly be wanting it to pass to force the re-location of teams etc.
Please don't play the social status card. I have no clue who you are, and you have no clue who I am. That's how it goes on an internet forum. If you assume anything about who I am, your loss.
Back to the argument, you're backtracking, and trying to have it both ways. You're the one who said boxes made zero financial sense (post #66). I never claimed that. I thought that claim was inconsistent with virtually all your other posts in this thread, where you are justifying why entertainment expenses actually do make financial sense (which I agree with). Implicit in my argument is that those boxes DO make financial sense, and if the cost was increased by 3-7%, they would probably still do. You're saying they no longer do? Fair enough, but that puts a dent into the whole "those expenses are very important for conducting business" argument. If they no longer make any sense at all after a 3-7% hike in cost, they weren't very important to begin with.
This is more or less what I'm trying to grasp here. As I don't operate a large business what is the actual effective net gain/loss going on here? If a luxury box costs $100,000, then once it's written off as a business expense under the current tax regulations what is the actual effective cost of those tickets? And once the provincial regulations change, what is the effective dollar value difference in that cost?
The way coladin talks about it he makes it sound like businesses pay $100,000 for luxury box suites and then get to save $100,000 in taxes. I know that's not how it actually works, but I have a hard time understanding how the benefits to having a luxury box is no longer worthwhile because it costs an extra few hundred/thousand dollars.
Another thing I was wondering about, if this is happening in Ontario and the Senators are saying they won't be able to stay in business if it passes, under what conditions do the other Canadian or small market teams operate under?
. Think of this as "tax money laundering". Businesses get tax breaks which they pass along to sports teams. And if the Sens really weren't getting any money from this then why is the Senators' president 
