It’s the investment opportunity of a lifetime

Pierre Karl Péladeau, who’s been leading the charge to bring back the Nordiques and has positioned himself as a likely owner of the franchise, laughs off suggestions he might be interested in putting any of his own money into the project:

It’s definitely impossible for us to even conceive we’ll make an investment of that nature.

[...]

The purchase of a team, that’s tens, even hundreds of millions of dollars. There’s also a substantial operating budget. I think that’s a major contribution by the private sector, since these events will finance and justify the construction by allowing it to balance its books.

Imagine that: turns out, it’s way easier to turn a profit on a hockey team when the government shells out $400 million to help you buy it. Somebody should tell the Phoenix Coyotes. Oh, wait… On second thought, let’s not mention Phoenix anymore, okay?




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It’s the investment opportunity of a lifetime

  1. This is blowing up in Harpers face big time.

    What the hell is going on at the PMO these days? Are these people on crack?

  2. My home has a substantial operating budget that definitely cuts my ability to maximize leisure activities. Therefore, it is only natural that other levels of government cover my basic living infrastructure which can amount to tens, maybe even hundreds of thousands of dollars. There's also a substantial operating budget, which I think is sufficient contribution on my part.

  3. Imagine that: turns out, it's way easier to turn a profit on a hockey team when the government shells out $400 million to help you buy it.

    The Quebec government has offered to shell out 45% ($175 million), and Quebec City's municipal government has offered to shell out 13% ($50 million). Couldn't CDPQ or a private equity fund cough up the rest, in exchange for a substantial equity share? Why does the federal government need to be involved in the first place?

    • To win votes?

  4. Paladeau = crass opportunist.
    Sports owners have no money to pay for buildings?
    Google "jeffrey loria" and "funneled"

  5. Mr. P needs to start raiding daddy's left-over meds.

  6. How to Succeed in Business 101 – never use your own money,

  7. We're talking about the same Pierre-Karl Péladeau who two years ago was lobbying the federal government for money because his business was in trouble. The recession has been good to Péladeau, I guess.

    • And the same Péladeau who is conspiring with Harper to force the CRTC to give him a licence to print money – I mean get a broadcast licence for FOX NEWS NORTH – that will have to be carried by cable companies. Harper gets a propaganda outlet from Péladeau without paying and CPC money and Péladeau gets a hockey team from Harper without paying his own money. This is almost like a same-sex mariage!

  8. Imagine that: turns out, it's way easier to turn a profit on a hockey team when the government shells out $400 million to help you buy it.

    Finally, more and more people are getting that government distortion of the marketplace is a stupid idea. And yet when a mine or a lumber outfit or an aircraft manufacturer or a passenger rail service can only thrive with massive taxpayer subsidies and *cough* loans *cough*, so many people get stupid again. Why is that?

    • Is it a distortion of the market place when a municipality builds a ma$$ive traffic interchange on the outskirts of a city so that people can drive to the mall built on cheap land and funnel local dollars into the pockets of corporations that do not reinvest the profits in the local economy?

      • Yes

      • Unless the property taxes of the corporate real estate owners are jacked up (and-or sales taxes are levvied on the new commerce there conducted) to pay for that municipal expense? Yes, it is a distortion. Would the marketplace have created such a space without the public $$? Maybe, but probably not.

        Unless tolls are placed to recoup the costs from the users of that infrastructure? Yes, it is a distortion.

        The mall developers could pay for the interchange and then charge people to park there. "But no one would ever shop there if that happened!" So why must the taxpayers shell out? So the mayor can attend the ribbon cutting. Yes: It's a distortion when some business people make business decisions with taxpayers' money. I see it as a variant of the tragedy of the commons.

        It is disgustingly obvious when it's done for billionaire owners of sports teams with millionaire athletes. It is no less disgusting anywhere else; it just seems less obvious to people anywhere else, for some reason.

      • Have the corporations not "invested" in the local economy if they have set up retail locations there and brought products to them that people want to buy?

        • Doesn't the owner of the hockey team "invest" in the local economy if they set up in the government funded sports stadium so that the sports fans can watch the hockey players live?

          What about the business owners that invested in the other areas of the city without infrastructure so specificly designed to funnel people in cars into the orbit malls? The theme is public subsidies for private business investment, Wordy, OK or not OK and why.

          • Doesn't the owner of the hockey team "invest" in the local economy if they set up in the government funded sports stadium so that the sports fans can watch the hockey players live?

            Of course he does. The problem is that his profit and loss calculations are wrong because a portion of his expenses are being covered by unwilling others.

          • Isn't that my point? This process of giving generous public subsidies to too narrow a segment of the population, causes gross distortions in the economy. The government has to tax and spend, no question, but this power needs to focused on the set Public Utility {bridges, roads, sewers, water treatment, public health, defence, massage parlors, etc.} not on the set Luxuries {sports teams, gambling, prostitution, speculative investments, etc.}. I am not against luxuries, profit, or sports. I just think that they should be privately funded, with in a publicly regulated context, and with the risk being privately borne.

          • I have always thought that a good public health care system would cover prostitutes and gin.

          • Prost!

          • Of course he does.

            Sexist.

          • I feel that I should add a little something here to clarify a point I think needs clarification. When I said that corporations "invest" in the local economy, I put the word "invest" in quotation marks because I was borrowing your phraseology where you said "corporations that do not reinvest the profits in the local economy".

            I took investing/reinvesting in this case simply to mean spending money. My personal opinion, however, is that investments are made into businesses or assets with the intention of earning a return. By this definition, an "investment" into an economy–local or otherwise–is meaningless.

          • You say, "is meaningless." – true, but only from the confines of your axiomatic assumptions.

            I say, this decapitation of local ownership has very real consequences in the real/physical economy of a given location. The financial health of the local business owner is of great importance to a community, because the profit tends to be spent locally. Big difference from HD's profits being spent on the Atlanta Falcons.

          • Yes, I know this is what you think, and it was to address this "local" fallacy that first drew me to respond to you.

            May I ask you, if the financial health of a local business owner is of great importance to the community, would it be wise for the members of that community to purchase more items from that local owner, and at twice the current price?

          • Ah, but that isn't what is happening, is it? No, the big boxes come in, get massively preferential subsidies in terms of public roads and land, mostly, and then undercut current local businesses by reducing the profit margin. You can live with lower profit margins if you have an extensive (government subsidized) network, because there are only a very few in the ownership position of said networks (think big boxes).
            So, the market, before big boxes sold widgets at $1.00 and the big boxes sell at $0.85. The house hold consumer thinks he is getting a better deal, but, in reality, his local economy is being looted. That $0.15 seems insignificant, but when 15 cents of every dollar of $10 million and much more is removed from local exchange, this has a very real effect. Also factor in the increase in local taxes… hey, there is the $0.15!!!!!! It is a slight of hand opperation. The local businesses are undercut, the local taxes go up to pay for big box road exchanges, so there is no net savings.

            You can't just look at one business's balance sheet when attempting to sort this out.

          • Sleight of hand.

            If it has come about that I am to somehow defend the government subsidising Business A over Business B by building a nice, shiny road to Business A, then we will be able to go no further. I am a proponent of the separation of Economy and State.

            If, however, it is being suggested that it is better for the community if its residents purchase their Widgets for $1.00 from a local owner, rather than for $0.85 from a foreign owner (unsubsidised), then I am happy to stand in opposition.

          • Sleight, right, thanks for that.

            When you go to the till at the big box, you will indeed pay $0.85 as opposed to $1.00, but it still costs you $1.00 either way. The BB retailers have moved an expense from their books to the public's books, and to cover that the municipality increases your property taxes by $0.15 per dollar transaction. You, personally, do not come out any farther ahead, the local economy is looted of profit that will be spent elsewhere, there are fewer business owners, and distribution is in the hands of organizations that are now, to big to fail.

            Not a sensible arrangement.

          • You, personally, do not come out any farther ahead…

            I do if I don't own property.

            Otherwise, I break even. If the local economy is "looted" of its money, then the business is "looted" of its goods.

          • Ah, but if you rent, the extra property tax will get passed on from your landlord, unless the government isn't distorting still further with rent controls.

          • Rental prices are not cost-plus. If my land-lord is able to increase the rental price of the property from x to y without reducing his profits (ie. a vertical demand curve), why was he not charging y to begin with (being a profit maximising capitalist)?

            The answer, of course, could be that renters are now able to afford a higher rent because of all the money they are saving on their Widgets. But the higher rents might bring more units (increased supply) to the market. In the end, I do not think that businesses can pass all cost increases on to the customer.

          • Rental prices are not cost-plus. They sure as heck better not be cost-minus!

            why was he not charging y to begin with (being a profit maximising capitalist)? He or she. And if the cost is property taxes, the cost goes up for all landlords in the area. He or she may have not been charging more before because of the rents for similar competing properties nearby.

            I do not think that businesses can pass all cost increases on to the customer. It's a combination of minimizing costs in all (other) areas and passing on costs while keeping an eye on the competition.

          • But do you own property, or are you mearly being hypothetical? You certainly avail yourself of the benefits of property.

          • I do not own property in terms of land, building, etc. (ie. real-estate).

          • But that's the problem. I am out the 15 cents already, whether I buy the widget there for 85 cents or at mom-and-pop for a buck.

            So you cannot get me to compare 85-plus-15-cents versus a-buck. I must now compare 85-plus-15-cents versus a-buck-fifteen.

            The problem rested with the theft of my fifteen cents in the first place.

          • You can't have a medium-of-exchange based economy without expenses, so there isn't any theft going on. Looting, yes, which is related to theft like birds and airliners in that are both said to fly. Additionally, if you are finding a shortage in your pocket book, it has very little to do with the profit taken by the local business. You will never get to the root of why you are experiencing a shortfall if you attempt to conceptualize the problem strickly in terms of cost compairison of A vs. B. Shopping for the cheapest price is a reguard action of someone already on track for bankruptcy. The extensive recent history of lobbying, on the part of physical goods producing businesses for policies favourable to offshoring production are of a similar species to your shopping for the cheapest price. In both instances, the causative detrimental factor remains unrecognized.

          • Shopping for the cheapest price is a re[ar?]guard action of someone already on track for bankruptcy.

            So, um, what does that make shopping for the highest price?

          • The path to Prosperity!

          • No fair, Justin, they give you all the good lines!

          • It need not follow that in compairing prices, the only alternative action to shopping for the cheapest price is to shop for the highest price. You also have the option of the best price, a value judgement that involves consideration of more than the mathematical results of a given transaction. A best price transaction involves a thorough-going consideration of of a very great number of factors in a given transaction. This would be an extremely cumbersome undertaking if we did not make good use of the vehicle of government policy and regulation to undergird the system in favour of the common good. To the extent that the common good is not a design value in government policy the door is open for looting operations to flourish.

          • Uh, yeah, ok, whatever. Just do me a favour and stay out of the express 8-items-or-less lane while you contemplate "true existential price," K?

          • I think I just split my gut laughing. Good one.

          • I think I just split my gut… Uh-oh. Then you shall need a surgeon.

            Speaking of government-distorted markets…

          • I think you're going to need a better definition of "looting" than, "related to theft like birds and airliners in that are both said to fly."

          • Why? I thought it was a succinct reference to order of magnitude, if a bit poetic.

          • Because an exchange is the opposite of theft.

            You look at all the money moving out of the community and call it a loss. All the while, neglecting the goods that are moving in to the community, ie. the gain (the other side of the exchange).

          • I didn't introduce the theme of exchange being conceptualized as theft. You have myl to thank for that. I should have more vigorously challenged it when he posted it above.

            I am not looking at money moving in the out of the the community and calling it loss. I am looking at the costs of delivering goods, seeing a significant systemic accounting error, and calling that misappropriation of funds looting.

          • This thread was started because myl was indignant at the proposed bald face government subsidization of the a new arena in QC. I said where is your ire at all of the more subtle forms of subisidy that already surround you. The focus of the conversation has been on how this is a loss to local and national economies. The unstated theme of my posts has been how this process (cause you don't live in a head office) is progressively creaming the gain, often represented as profit, from communities.

          • And it is my unstated theme that you have completely fallacious understandings of the function of money and the importance of the "community" as an economic unit.

            Your obsession seems to be that the stock of money stays within the community. That if any money leaves Community A for Community B, it is a loss to Community A, even though Community A will be getting Community B goods in return.

            I ask you, where, or from what, does Community A's money get its value?

          • Input of value derives from an ever increasing recognition of the physical nature of the universe we live in X the depth of application of human ingenuity = increased capacity to sustain and support life.
            Looting of value derives from axiomatic manipulation of mathematical sums X degree of degraded conception of human existance = decreased capacity to sustain and support life.

          • Actually, this thread started because I chastised everyone who is only now suddenly PO'd at government misuse of taxpayer $$ to favour a selected corporate interest. To wit: And yet when a mine or a lumber outfit or an aircraft manufacturer or a passenger rail service can only thrive with massive taxpayer subsidies and *cough* loans *cough*, so many people get stupid again. Why is that?

          • So, if I am to understand you correctly, our current economic malaise could be remedied by us all paying more for our goods?

          • Got milk?

          • You lost me there, myl.

          • Think:
            our current economic malaise could be remedied by us all paying more for our goods?
            and:
            The Dairy Farmers of Canada.

          • So you are saying that dairy prices are being propped-up?

          • Please tell me you are kidding.

          • There are lots of people, industries, businesses that have their prices propped-up in Canada. Are you telling me that the Dairy Farmers of Canada are particularly egregious? I don't doubt it, I just don't know much about it.

          • It's the example that jumped up at your let's-all-pay-more line. Because, by law, we are all required to pay more for milk.
            http://www.dairyfarmers.ca/what-we-do/supply-mana

            Canadian dairy farming is one of the few agricultural industries that is self-sufficient – both providing income security for producers and requiring no government subsidy or support.

            …if you ignore the government effort at throwing the book at anyone who would dare sell milk outside this government-propped cartel…

          • "[Supply Chain Management] protects the Canadian dairy sector from world market fluctuations."

            What happens when cheaper foreign milk wants to come to Canada?

          • Under the *cough* pillars *cough* of supply management, one finds:

            Canada's federal government has committed to limit imports to ensure Canadian dairy market requirements are primarily met by Canadian milk production.

            Putting the lie to "no government subsidy or support."
            http://www.dairyfarmers.ca/what-we-do/supply-mana

          • It's a contentious issue with EU trade negotiations.

          • Good. Canada can't expect to smugly break down other countries' trade barriers and then smugly offer "Milk? Eggs? Well, that's different…"

          • No, you are not understanding me correctly. Our current economic malaise stems from failing to take into account the full cost of delivering goods and services because a significant cost, the creation of units of exchange (money) by private means is not a line item in the calculation of costs. The systemic flaw is that money is created to loan, but money to pay back the interest portion of a loan is not simultaniously created. In fact, it is never created, therefore, looting operations arrise in an attempt to do the impossible: pay off all of the debt in the system when there is insufficient money to do so.

          • You are confusing stock and flow.

            All debts are not paid off at the same time. A given stock of money, even a fluctuating one, can turn over many times, meaning many people can make their interest payment with the same stock of money (just not at the same time).

            Your example is like saying, "since all the money in the world is much less than all the prices of all the goods in the world, most of the goods in the world will go unsold and people will go bankrupt."

          • That $0.15 seems insignificant, but when 15 cents of every dollar of $10 million and much more is removed from local exchange, this has a very real effect.

            I get the extra-tax-cost argument just fine, but this line doesn't wash. How do you figure the cheaper-transaction's permitting the local resident to retain those 15 cents (multiplied over and over) is a "looting" of the local economy? You miss the point that it remains in play in the local exchange for something else.

          • myl,

            On a mildly related note, we have a small, but encouraging, first step.

  9. Cheers, Bottoms up, etc.

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