Calgary’s billionaire NHL owners just played themselves

It’s not often that you lose a great hand of poker and get a chance to play it again. But that’s the anticipated Christmas gift that Calgary Sports and Entertainment Corporation, the owners of the Calgary Flames, have unknowingly given to city taxpayers and Calgary’s new mayor and council.

After the team’s billionaire owners agreed to split the cost of a proposed new arena with the city, it appears they tried to dupe the new council out of better terms and even more public money.

This time, however, it didn’t work. As Mayor Jyoti Gondek explained in a tweet thread On Tuesday, new costs emerged in recent months related to climate mitigation ($ 4 million) and highway / sidewalk rights-of-way issues ($ 12.1 million). The city was willing to help cover $ 6.4 million of the latter, a generous offer given that the group that owns Flames had already renegotiated the terms of the deal in his favor earlier this year. But apparently, that wasn’t good enough.

“In a project worth more than $ 650 million, that one of the parties withdraws for 1.5% of the value of the agreement is amazing,” he said.

Not that Murray Edwards, CSEC’s largest shareholder, is looking for cash right now. His shares in CNRL, the oil and gas company he founded, have risen a cool 26 percent since July 31, when the agreement between the city and CSEC was last updated. As the holder of 21.9 million shares, that means your personal net worth has increased by approximately $ 236 million, and that’s not including your 1,975 million outstanding options or 856,625 units of yield shares.

Edwards could even pay the cost of climate mitigation for his team’s new scenario through his position at a completely different oil company. In late 2020, he invested $ 15.6 million in debt and equity in Cardinal Energy, a smaller company that was on the brink of bankruptcy at the time. After buying 6.25 million shares at $ 0.50 each (and receiving 6.25 million warrants, which entitle you to buy the shares at $ 0.55 each), you now control up to 23.5 million shares that are worth much more today than a year earlier. With Cardinal’s stock now trading above $ 4, he’s already made more than $ 75 million on his position, and $ 40 million on the stock portion of the deal alone.

If there is anyone who should be willing to cover the cost of climate mitigation in a new arena, it should be Edwards. In addition to making CNRL a major global player, he also co-founded FirstEnergy Capital, one of the largest funders in the oil and gas industry, in the early 1990s with Brett Wilson, Jim Davidson and Rick Grafton.

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But even if you put that aside, there’s the fact that weather mitigation is not a theoretical risk to the Calgary Flames or their fans, who saw the Saddledome flooded to cheap seats in 2013. The costs of setting up one New sand for potential weather hazards isn’t just a bad look, it’s an epically bad read of the room.

That could be because Edwards doesn’t spend much time in the room anymore. As the 2020 CNRL filings revealed, he now lives in St. Moritz, Switzerland, a move some have speculated is for tax purposes. First left Canada in 2016, just as federal and provincial income taxes were going to increase, though it insisted that was not the driving force behind its initial relocation to London. But wherever Mr. Edwards wants to hang his hat these days, it should be pretty clear by now that it won’t be Calgary.

In the days and weeks to come, the Flames property and their media representatives will almost certainly invoke the specter of relocating the franchise, be it to Quebec City, Houston, or some other market. Let them make their threats. The new Calgary mayor and council have bluffed them once, and their remaining cards aren’t as good as they’d like to pretend.

The NHL is not in a position to remove a team from a major Canadian market like Calgary, especially now that it has placed teams in Las Vegas and Seattle, and the public’s appetite for subsidizing billionaires and their sports teams is smaller than ever. . .

Meanwhile, Gondek has made it clear that addressing climate change will be a big part of his administration’s agenda, no matter how loudly his fossil fuel opponents complain.

If the Flames group of owners still think that paying for climate mitigation measures in their new arena is an expense they can’t afford, they are about to find out what it really costs.