A new stadium for the Rider's

It was announced recently that the Canadian federal government and the Saskatchewan provincial government will split the million dollar cost of a feasibility study to determine if a new domed stadium should be built in Regina for the Saskatchewan Roughriders. A $70,000 study funded exclusively by the Saskatchewan government found that the construction cost alone would run $350 million. This did not include land costs or cost overruns.

Now lets acknowledge a few facts.
1. It is cold and windy in Regina at the end of November.
2. Mosaic Stadium at Taylor Field is an aging facility.
3. $350,000,000 is a lot of moola.
4. The Saskatchewan Roughriders and the Canadian Football League are both private for profit entertainment organizations.

It does concern me that people are looking to all levels of government for funding and throwing around words like "need" and "deserve" when trying to justify pushing the expense away from those who will benefit to those who won't. This is especially troubling when the Riders last year sold out on every single game they played at home, and because of efficient and prudent management they are leading the league in revenue.

Lets start with the first question. Do they require a new stadium? If they are able to sell out every single game, then people are not staying away because of the weather. It is also in the culture of Rider fans to brave the elements while cheering on their team. Additionally, the release study has concluded that the existing facility is structurally sound. In an study on American sport complex construction found a significant driving force in new stadium construction was the expansion of luxury boxes to increase profits to the team. This benefits the average sports fan or the differing levels of government nothing. So to answer the question, do they require a new domed stadium? No. The current fans are quite happy to thumb their noses at the wusses in Toronto and Vancouver in their domes and attend in sell out numbers the games in the current facilities. Would it be nice to have a new domed stadium? Yes, but it would also be nice if I could go to the moon and own a small sub-tropical island paradise.

On to the second question. Can they afford a new stadium? I ran a few numbers, so here are my assumptions:
1. The construction will be financed with a bond at 8%
2. The repayment period will be over 15 years. At the end of this time the stadium will be requiring some sprucing up, so this bond needs to be cleared from the balance sheet.
3. The new stadium capacity will be 38,000
4. The average attendance at games will be 60%. They cannot realistically sell out every game for the next 15 years. This also provides a little buffer in the budget.
5. There are 10 home games a year. I got this from the Riders website.

With these numbers and a simple interest calculation, it works out to a interest and principle payment of $40,890,340.73 annually, or $4,089,34.07 per game. If the Rider fans are charge directly for this, it works out to a ticket surcharge of $179.34 just to fund the construction bond. Now many will point out that the dome would be used by other events, so the football team is not required to bear the entire financial cost. Moving the portion the Riders would have to bear down to 25% it will still cost $44.84 per ticket sold just to pay for the bond. I am not privy to the inner financial workings of stadium management, but I don't think the fans will appreciate a doubling of their ticket prices just so they can have a dome. At that is at only a 25% burden.

Let us also look at the population base this stadium will be servicing. The population of Regina is, according to Wikipedia, 179,246 and the population of the entire province is 1,023,810. This is the population that will be required to attend concerts, trade shows, monster truck shows, etc to support the portion of the debt that the football team cannot. Another potential source of private funds is the naming rights. Currently the naming rights to Mosaic Stadium at Taylor Field is $3.75 million over 10 years. This is only $357,000 per year, but you are trying to make bond payments of $40.89 million per year. To compare to other naming rights in Canada:
1. Calgary Pengrowth Saddledome is $20 million for 20 years, or $1 million per year
2. Ottawa Scotiabank Place is $20 million for 15 years, or $1.33 million per year
3. Vancouver General Motors Place is $18.5 million for 20 years, or $0.925 per year
4. Montreal Bell Centre is $64 million for 20 years, or $3.2 million per year
5. Edmonton Rexall Place is not disclosed
But these are hockey arena's, and in Canada hockey is king and a football stadium cannot expect to demand these prices. The naming rights for football arena's in Canada are:
1. Toronto Rogers Centre is $25 million. I couldn't find the time period, so lets assume 20 years, or $1.25 million per year.
2. Winnipeg Canad Inns Stadium is $1,750,000 for 10 years, or $175,000 per year
3. Vancouver BC Place current is in the process of selling naming rights. Speculation puts the price at between $750,000 and $2 million per year.
4. Edmonton,Hamilton, and Calgary have no naming rights contracts.
Toronto and Vancouver are marque area's with large populations, so their value will be higher. Lets assume the naming rights would double with a dome, that would put it to $7.5 million or $750,000 per year. This only provides 1.83% of the require bond payment. To conclude on the question "Can they afford a new stadium?" I believe the answer is No.

The third question to answer is: Should the various levels of government help fund the project? This becomes a more difficult and varied question to answer, but not impossible. The question can be subdivided into, What value does the stadium provide the government bodies? and What would they do with the money instead of building the stadium?

Statistics are HOT

In case you have been wondering if the Swine Flu reporting is appropriate or maybe a little bit over heated, Hans sets us straight.



So, are you more scared of Swine Flu, tuberculosis, or driving to work? According to Transport Canada in 2006 there were 2889 people killed in motor vehicle collision. So a 13 day period as discussed in the video, in Canada 102.90 people would be kill on the roads compared with the 31 people world wide that were killed by Swine Flu.