It’s not often you lose a big hand of poker and get the opportunity to play it over again. But that’s the early Christmas gift that Calgary Sports and Entertainment Corporation, the owners of the Calgary Flames, have unwittingly 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 bluff the new council for even better terms — and even more public money.
This time, though, it didn’t work. As Mayor Jyoti Gondek explained in a tweet thread Tuesday, new costs have arisen in recent months relating to climate mitigation ($4 million) and road/sidewalk right-of-way issues ($12.1 million). The city was willing to help cover $6.4 million worth of the latter, a generous offer given the Flames ownership group had already renegotiated the terms of the deal in its favour earlier this year. But apparently, that wasn’t good enough.
“On a project worth over $650m, to have one party walk away for 1.5% of the value of the deal is staggering,” she said.
It’s not like Murray Edwards, the primary shareholder of the CSEC, is hard up for cash right now. His shares in CNRL, the oil and gas company he founded, are up a cool 26 per cent since July 31, when the agreement between the city and CSEC was last updated. As the holder of 21.9 million shares, that means his personal net worth has increased by approximately $236 million — and that’s without including his 1.975 million outstanding options or 856,625 performance share units.
Edwards could even pay for the cost of climate mitigation for his team’s new arena through his position in a completely different oil company. In late 2020, he invested $15.6 million in debt and equity in Cardinal Energy, a smaller firm that was on the verge of bankruptcy at the time. After buying 6.25 million shares at $0.50 each (and receiving 6.25 million warrants, which give him the right to buy the shares at $0.55 each), he now controls as many as 23.5 million shares that are worth far more today than a year earlier. With Cardinal’s stock now trading above $4, he’s already made upwards of $75 million on his position — and $40 million on the stock portion of the deal alone.
If there’s anyone who should be willing to cover the cost of climate mitigation on a new arena, it ought to be Edwards. In addition to building CNRL into a major global player, he also co-founded FirstEnergy Capital, one of the oil and gas sector’s biggest financiers, in the early 1990s alongside Brett Wilson, Jim Davidson and Rick Grafton.
But even if you set that aside, there’s the fact that climate mitigation isn’t a theoretical risk for the Calgary Flames or its fans, who watched the Saddledome get flooded up to the cheap seats back in 2013. For him to balk at the modest costs of preparing a new arena for potential climate risks isn’t just a bad look — it’s an epically bad read of the room.
That might be because Edwards doesn’t spend much time in the room anymore. As CNRL’s 2020 filings revealed, he now lives in St. Moritz, Switzerland — a move some have speculated is for tax purposes. He first left Canada in 2016, just as federal and provincial income taxes were set to rise, although he insisted that wasn’t the driving force behind his initial relocation to London. But wherever Mr. Edwards cares to hang his hat these days, it should be abundantly clear by now it won’t be Calgary.
In the days and weeks to come, Flames ownership and their proxies in the media will almost surely invoke the spectre of relocating the franchise, whether it’s to Quebec City, Houston or some other market. Let them make their threats. They’ve already had their bluff called once by Calgary’s new mayor and council, and their remaining cards aren't nearly as good as they would like to pretend.
Opinion: After the team’s billionaire owners agreed to split the cost of a proposed new arena with the city, it appears they tried to bluff the new council for even better terms — and even more public money, writes columnist @maxfawcett. #Calgary
The NHL isn’t in a position to remove a team from a major Canadian market like Calgary — especially now that it has placed ones in Las Vegas and Seattle — and the public’s appetite for subsidizing billionaires and their sports teams is smaller than it's ever been.
Gondek, meanwhile, has made it clear that tackling climate change is going to be a big part of her administration’s agenda, no matter how loudly her fossil-fuelled opponents complain about it.
If the Flames ownership group still thinks paying for the climate mitigation measures on their new arena is an expense they can’t afford, they’re about to find out what that really costs.