Monday, May 18, 2015

The New Arena Kurfuffle

The introduction to the new arena seems as confusing as the initial talks to actually build the new building.

News Article

I've bolded 3 key parts of that article

City hall cannot get involved in lease negotiations between the Medicine Hat Tigers and SMG-Canada without breaking its contract with the Event Centre’s private operator, according to the head of the public service committee

Further, she said, a key factor in choosing SMG was its North American network and ability to attract major concerts and other events to bolster profits.

“They have a wealth of experience in running buildings such as these,” said Friesen.
Senior team officials also said that in years past, negotiating with council had led to deals that accounted for the team’s financial position.

I'm not exactly sure what the role of the operator entitles, but I believe how the business is handled on a day to day business will be very different compared to their old lease with the city of medicine hat.  

From what I've been told ticket prices, concessions, parking, hiring, security plus a lot more will be handled by the 3rd party SMG group. The Tigers will want to make a profit, as well as the SMG group who operates the Arena. I wouldn't be surprised if the Tigers largely controlled a lot of these aspects when the city was the operator. Now new building's operator SMG in contract with the city will be potentially handling large parts of that.  I'm largely speculating here but I would guess the Tigers are uncomfortable with giving up this control, and want the city involved to re-negotiate some of this control from the contract they signed with SMG.

With the New arena also comes more possible ticket sales. Last season the Tigers had "sellouts" every game, however I think we would both agree that their were only about 3200 in the seats.
SMG saw sellouts and the Tigers still made money with lots of tickets being dumped in the fans hands. I think that could also play a big part of the discrepancy of the negotiation process.

Investigating the SMG Group
With So Many Questions being un-answered heading into a new season, I decided to do a bit of research. SMG operates 3 other Arena's within canada, the OHL Niagra Icedogs. Mississauga Steelheads, and the Kingston Frontenacs.

Season Ticket Prices
Niagra (NEW in 2014) (399,499,569)    (pay, and free parking, downtown)
Mississauga (399 ends) (459 middle) (609 middle+lounge)    (free parking)
Kingston  (496,544,612,685)  (paid and free parking)

Note: Those teams have 2 less home games than the WHL. (add $20-$30 to each numbers for whl)

All 3 teams have a pricing that is different compared to where you are sitting in the Arena. So I guess we can expect the same thing at the New Arena. Niagra's building is brand new in 2014, and they also had the Tragically Hip  for the first concert.  Niagra has glowing reviews of their building with amazing sight lines, comfortable seats, restaurants, an enjoyable atmosphere, with the exception of concession pricing.

Concessions and Parking
Cost for parking? It is unknown at this point. In all 3 places above their are free parking spots, and paid lots but I'm unsure if these spots or 3rd party or not.

Looking at reviews for concessions, Medicine Hat is likely looking at an increase. $8.50/9.50 beer for playoff game in Niagra. It was noted that food was comparable to an NHL game, as well as "pricey" in Kingston.  In Mississauga,1998 built, and low attended, food/drink was a little lower $6 a beer. either way expect the price of food/drink to increase.

SMG will probably bring in a bunch of other events to the Arena. The Tragically Hip also opened up in Niagra's new building for this season. My opinion is I would  pay more money for concession prices if it means this group will bring in high quality entertainment to the hat.

Their are many different factors into this type of lease situation so speculating without knowing is hard to do.  I've speculated above but i could be dead wrong so please do not take that info as fact.

Regardless a deal should have been done at this time. I wonder if the Tigers currently have years remaining on the current Arena's Lease? If they do I wonder if they could choose to stay at the Current Arena?

My guess is that this would not be the case as their have been no mention of this in the news articles, and business wise it would make sense for SMG to have in their contract with the city that the city wouldn't be allowed to compete with them @ the old arena.

 I wonder if a 3rd party operator could take over the cities role as operator of the current Arena?, but that is likely a venture that wouldn't be profitable with an old building, so I highly doubt that happens, and the Tigers will need to find an agreement at the new centre.

Season Ticket Holders
The last few seasons the end of June has been the deadline to purchase season tickets, but I have not received a notice yet.  The lease negotiation have a Huge effect on the prices of season Tickets. So looking at the other 3 Arena's SMG controls, One would expect a similar price structure, in the 420-640 range as mentioned above but taking into consideration a 36 game schedule.


longtimefan said...

Lease issues with the Tigers and the city are nothing new. Ask anyone on council involved in previous negotiations and they will tell you how difficult the team has been to deal with.

There is no chance in hell that they will be going back to the old building. Could you imagine what kind of a public uproar would take place if that was allowed to happen. A good portion of the city wasn't happy this new building was constructed in the first place.

Don't think going to the media was a smart move on the Tigers part. In the court of public opinion the team loses. Other than a couple thousand hockey fans most people believe the team hasn't done enough to assist financially with the construction. This is just throwing gas on an already simmering subject.

No lease, no construction on dressing room and training facilities which I am told the Tigers will be footing the bill for. This is getting to the eleventh hour to get this stuff done. The boys might be sitting on Apple crates to start the season.

Whats up said...

Time for the Tiger management to evolve or sell to owners who actually have input...The team doesn't need to have disgruntled fans...yes if you build it they will come but how many times and how many people will actually renew tickets with the Maser/Anjelic drama series going on? At least with SMG running the games and hopefully promotions etc if Rroary doesn't show up or something is forgot or if there is an hour and a half delay due to a broken gate (and fans are not offered a beer special or food special) with it being privatized maybe someone will actually be fired and pushed to do a good job!!!! Buck up Tigers time to evolve it is 2015 now not 1970 anymore!!!

TigerTurf said...

The Tigers not signing a lease also holds up the WHl schedule. The WHL might step in once schedule deadlines get put on hold.

CatFan said...

I am also assuming that the old arena is out of the question, as the WHL would probably not allow this. How stupid would the Tigers look to even think of this as an option? I too think it is time for new ownership and a PR department that actually knows what marketing is!!

Anonymous said...

lotsa people talkin', few of them know...

wise words from a Led Zeppelin song. No offense, but some of these comments are pretty dumb.

Why people are ragging on the Masers in all this is beyond me. No one seems to have any idea what the snags or what have you in the negotiations are, but seem to think it's somehow their fault.

i've been a season ticket holder for a long time, and the price of my tickets are the same as they were 7 or 8 years ago. I'm sure there were a few opportunities to increase the cost of them, but thankfully they haven't. In the new event centre, we're already hearing about user fees and extra costs adding to the price of going to a game, and that's from the city and SMG, not the tabbies.

when the deal is done, maybe we will know who was to blame all along, but the way i see it, no games have been missed yet and the Tigers seem to be pushing to keep ticket prices low. So maybe think twice about which side you're cheerleading for.

Anonymous said...

It certainly doesn't seem like SMG operates the other rinks they run by charging a big price to customers as per other junior sites mentioned. Seems Tigers must have been making a good profit based on what they paid in rent so it seems maybe they have to take less of a profit and the citzens won't have to subsidize the arena like they have in past when Arena lost money

TigerTurf said...

Longtimefan said in another forums, which I partiall agree with:

Personally I think the Tigers made a mistake by going public. In the court of public opinion the Tigers lose. Except for the 2000-3000 staunch supporters a lot of people are miffed that the team hasn't said or done much to support this new site and by going to the media they are looking like the spoiled brat that hasn't gotten their way.

I went through 5 whl teams with the same or similar market size in Canada to medicine hat and the Average price for normal seats is $512 for next season. Let's assume a small 2% inflation rate and work backwards.


Interesting in accordance to today's markets Tiger fans having been overpaying for season tickets for the last bundle of years. (would be more accurate to calc with actuall average prices, but that data is hard to find)

However - Comparing the average market is very misleading. Taking supply and demand into effect, the prices 7-8 years ago probably should have been near 800-900 for season tickets, and this year probably closer to 400.

Out of all of this I'm just trying to say, that the Season Ticket prices are due to be increased,(more-so with a brand new arena) and what a perfect time to have someone else increase the cost.

So even though right now the Tigers look like the bad guys. In terms of public opinion they will look like the good guys very soon with the ticket increase being blamed on SMG.

The Tigers have a very good team and with the new arena I'd say the middle tier of tickets shouldn't cost anymore than $575. They will likely have a platinum/high tier that will cost more, and a lower tier that will cost less.