Description: If you happen to be one of the fortunate fans to have had a ticket to Wednesday’s NHL season opener for the Leafs and the Habs, you may have noticed the new beer stand where you swipe your way in with a credit card, then AI tracks what you pick up, before charging your card. It beats standing in line, and it’s also one of the highly-noticeable renovations carried out at the Air Canada Centre prior to the Leafs and Raptors embarking upon another season. Unless you have a spare $60,000 though, you may not get to see the new Mastercard lounge, where the patrons can indulge in luxury foods of various sorts. According to management, however, none of the $350 million in upgrades will be paid for out of ticket price increases. Exactly how fans can verify this assertion was not discussed in the Toronto Star article.
Date: October 10, 2023
Source: thestar.com
Discussion points:
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
Evan Wood
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
No we have not been to the Air Canada Center.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
If the increase in ticket price will not cover the $350M renovation management could potentially recover the costs through corporate sponsors like Air Canada, Master Card, ScotiaBank, etc. if those large corporate sponsors have not already fronted a portion of the renovation, such as the “MasterCard Lounge”. Fact of the matter is, this is not the only venue to have made or will be making big changes to their venue. So, this will be a question and issue that a number of venues will be facing or will have faced across Canada and we will see very soon if this system of raising ticket prices is effective in the long term.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has
a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
The renovations at the Air Canada Centre fall into the Captial Expenditures category, as these renovations increase an asset’s productivity/efficiency. And example of this is the addition of the “Just Walk Out” concession stands that they have added. This will benefit more than one period.
Xander Ries
Evan Wood
Natasha Imbeault
Amin Ahmed
Gursahiba Saggu (Group 3)
Group 3
1) Yes I have worn Birkenstock sandals, I even own a pair. I think they are over price but they make a nice and beautiful pair of sandals to wear in the summer plus they’re fashionable.
2) It would be the right thing to do financially for the company, but if you look at the bigger picture if they moved their production line out of Germany it could affect their sales and customer loyalty which could also result in a real financial hazard for the company.
3) In 2019, Saudi Aramco held the largest IPO ever. They are based in Saudi Arabia and are the biggest oil company in the world. It is the most profitable firm in the world, outpacing even major companies like Apple and Google. After publicly disclosing their shares, they made 29.4 billion. It still remains to this day the largest IPO in history.
Martin Duguay
Sophie Major
Rhys Chambers
Gursahiba Saggu
Group 3
this was supposed to be on the Birkenstock.
accidently got posted to this one.
Tristan Raine
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
No we haven’t been to the Air Canada Centre.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
We think management should do exaclty what the Rogers Centre did to pay off renovations, get a bunch of sponsorships. They already have sponsors on the boards for Leafs games so it would be beneficial to have sponsors around the arena or even have something similar to the West Jet Flight Deck that the Rogers Centre has.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
It would be a Capital Expenditures, as it mentions increasing asset’s productivity and efficiency.
Theo Delaney
Hailey Arsenault
Tristan Raine
Breanne Wesselius, Avery Marr, Jagger Vandewiel, Graeme Maither
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
Yes, some members of our group have been to the Air Canada Centre. We thought that it was a very nice stadium.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
We think that the best way to cover the renovation costs is through sponsors. Most stadiums already have many sponsors hence the posters throughout the building and other give away and games for other businesses. So, getting sponsors wouldn’t be difficult for the center. This would make the renovations possible to happen.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
This renovations fall in the expenditure category in the Wiley financial accounting: tools for business decision making. This expenditure will turn into an asset for the Air Canada Centre. Ticket sales and customer satisfaction will increase because this improvement in the building.
Breanne Wesselius,
Avery Marr,
Jagger Vandewiel,
Graeme Maither
Cohen Tremblay
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
No we have never been to the Air Canada Center.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
If the $350 million renovation costs are not covered by the increased ticket prices, management may be able to recover the costs from corporate sponsors like Air Canada, the biggest sponsor of the arena which it is also named after. However they have most likely already contributed or are going to contribute to a portion of the renovation, such as the “MasterCard Lounge”. The truth is that other venues have made or will make significant upgrades to their facilities as well. And only time will tell how successful the elevation of ticket prices will go.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has
a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
The Air Canada Centre renovations are considered capital expenditures since they boost an asset’s productivity or efficiency. The advent of the AI concession stands is one illustration of this. There will be multiple benefits from this, during multiple times of games.
Cohen Tremblay
Spencer McCarron
Usel Wangyal
Victoria Burnie
Patrick Barnhill
Group #1: Patrick Barnhill, Daniel Duffy, Hunter Wrigley
1)One of us has been to an event at the Air Canada Center. Overall, it is a nice arena and was a good experience.
The other group members have not been to the Air Canada Center.
2)If renovations are not being covered by a ticket price increase, there are other alternatives for management to use. They could launch fundraising campaigns to secure donations from sponsors or organizations. Another is increasing the number of events outside of the Toronto Raptors/ Maple Leafs that can help pay for renovations and expand their target audience to people who may not usually attend events in the center.
3)The renovations fall into the Capital Expenditures. It improves the asset by extending its useful life and by improving its productivity. Benefits more than one period.
Ethan Cushing
Group 9
Ethan Cushing, Calum MacDonald, Morgan Milley, Brenden Donald
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
Upon discussion, our members impressions of the Air Canada Centre were quite common, in which the lines were far too long for the concession stands, let alone the bathrooms. As well having four separate forms of payment at each stand was time-wasting for the employees, we feel as though this method of single-form-payment and no person-to-person contact will drastically help this issue.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
A method we thought would best fit would be an increase in prices for merchandise, with the speed in which customers can get their drinks they would be more inclined to look at the merchandise already. Slightly increases the prices on a vast volume of sales would bring in a lot of extra revenue for the Air Canada Centre.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
We believe this fell into the category of Capital Expenditures. This is because it is an asset that increases the productivity of the concession stands, and it does not need to be maintained as a normal operating condition.
Kohei Noda
Group 8
Kohei Noda, Joel Williams, Spencer Long, Andrew Kuiper
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
Unfortunately, none of us have been to an event at the Air Canada Centre.
2)If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
This can be done through sponsorships. By having multiple large companies financially sponsor the renovations, a large amount of the expenses can be covered. Another way to cover this expense can be by charging a small service fee on the purchases done at the centre. We believe most customers won’t notice the fee or would justify it by not having to wait in line for such a large event.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
We believe this would be a part of Capital Expenditure since this is a significant expense that occurs infrequently as well as improves productivity.
Canyon Hawkes, Divine Tissera, Amit Friling, Anmol Shory
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
– No, none of our group members have ever been to the air Canada center before.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
– Our group discussed multiple different methods and came up with the following tactics: One way they could pay for the renovations would be through raising concession/merchandise prices. These are commodities that are going to be in heavy demand by consumers when they are at an event within the air Canada Center. Another way they could generate more money to pay for the renovations would be to ask their large organization sponsors for an increase in their sponsorship.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
As a group we have decided that capital expenditure more accurately describes the situation in the air Canada center, being that the cost is significant but infrequent and that the cost is used to elevate the productivity.
Group 7 Kadar Hamed Isaac
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
No we have not been to the Air Canada Center.
2) If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
We think funds will be generated mainly by sponsorships if not by ticket sales. Allowing major brands to own exclusive rights to special parts of the arena. For example the MasterCard with the luxury lounge. Another source of income can come from events other than sporting events. Because of the new renovations international entertainment companies like Liv Nation might pay to host more events like concerts and theatre. If the renovations won’t be paid with ticket sales the arena can still up the price on things like parking and concession.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
We think this would be an example of Capital Expenditure. It extends the useful life of the asset and increases productivity.
Kohei Noda, Joel Williams, Spencer Long, Andrew Kuiper
*REPOST*
Group 8
Kohei Noda, Joel Williams, Spencer Long, Andrew Kuiper
1) Have you ever been to an event at the Air Canada Centre? What were your impressions, if applicable?
Unfortunately, none of us have been to an event at the Air Canada Centre.
2)If the renovations are not being recovered out of ticket price increases, what method do you think management will use to pay for them?
This can be done through sponsorships. By having multiple large companies financially sponsor the renovations, a large amount of the expenses can be covered. Another way to cover this expense can be by charging a small service fee on the purchases done at the centre. We believe most customers won’t notice the fee or would justify it by not having to wait in line for such a large event.
3) Page 9-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making has a section titled “Expenditures During Useful Life.” Which of the two categories do you believe the renovations at the Air Canada Centre fall into?
We believe this would be a part of Capital Expenditure since this is a significant expense that occurs infrequently as well as improves productivity.