Thoughts and Opinions On Today's Important Issues

Friday, January 29, 2010

Dwight's Red Bull Math

In my opinion, the political deal has been sealed between Dwight and Edgar (aka Eddie).

They did not meet about DRIC recently but rather about local politics involving what each has decided to do for their own future I would guess. A truce has been arrived at. How else to explain the $10M for Red Bull for 2 years covering both the provincial and municipal elections when a provincial health lab is allowed to close and there is no money for daycare supposedly.

Poor Bill Marra. Has he been sacrificed again? It's just my opinion obviously but the Star Red Bull Editorial has confirmed to me that every possible step will be taken to ensure that Councillor Marra can never be Mayor whether Edgar runs or not!

Of course, Bill has it within his own ability and power to beat them. But will he sit it out this time and run for Council, waiting again for a more appropriate time to run for Mayor, whenever that is? To me, if he does, he will never be a serious candidate for Mayor again.

Can you believe the rah, rah, rah from the Star without a hint of scrutiny about the Red Bull deal:

  • "Picture it. As many as 200 corporate and private planes lined up at Windsor Airport. Luxury hotel rooms and local restaurants filled to capacity. Jet-setters from around the world descending on Windsor...

    MPPs Dwight Duncan and Sandra Pupatello clearly understand the race's importance to Windsor and the province.

    There's the enormous economic impact, to be sure...

    This is what we're all hoping for in terms of international exposure and economic stimulus."

Heck they should have been examining what value the race has had in Windsor since it has been held here twice already. What examples can be pointed to that justify another $10M going directly into a private company at the expense of local festivals. As a reader wrote:

  • "Went to A Canada South Festival meeting yesterday.

    There are a lot of unhappy people that have been mistreated...

    Chris Ryan has his job cut out for him. He's got some great ideas, but only if he is allowed to implement them.

    Red Bull didn't come up but there was some reference in chatting.

    The local festivals pay membership and support the tourism board yet the board will spend a gross amount of time with Red Bull activities. They have to. That's a lot of resources tied up to do one week.

    Few more facts....

    The local festivals in Essex host well over a million spectators a year. They have to apply for government funding of which takes brutally long hours and competition against each other.

    In the end the city gives zero dollars yet benefits from thousands of volunteer hours every year.

    The subsidy the festivals get is so low per person, it's difficult to calculate. Red Bull is getting $18 per person based on last year's numbers.

    They do not have to compete for the funds, nor do they provide benefits for partners in tourism or collaborations with other festivals and events. As a prerequisite, the government wants applying festivals to partner with each other to spread the funds around.

    The average person has no idea how much Red Bull will make in a race week. Dwight claims $100 million in one week. Even New York won't claim that much.

    Since the economic activity is so high, the city should be reaping huge benefits and have no reason to cut day care or complain about fireman's wages.

    Let's face it, the city stands to do very well, according to Edgar and Dwight, when Red Bull flies into town.

    So why are they so worried about money?"
Should one question instead whether Dwight Duncan should remain as Minister of Finance the way he plays with numbers.

Now I cannot get my head around all of those numbers in the Budget and what they mean. I am not a numbers guy. But I start to have some doubts about Dwight when I hear him and then Sandra and Edgar (aka Edgar) toss the Red Bull numbers around. That $10m number is not so hard to understand.

Or maybe, I should attribute it to the amnesia pandemic. Clearly, it has serious long-term effects that have never been considered by medical researchers if poor Dwight cannot remember what happened only a year ago. Dwight must have sucked in all of that unscrubbed Tunnel exhaust when he was a Councillor here and it still impacts his memory.

Let me fisk part of this Star story:
  • "Red Bull returns
    Ontario pays $10M to guarantee local stop for 2 years

    The "Formula One of the sky" is coming back to Windsor this summer and the next. [Two year deal. Good for Edgar if he runs this year and even better for Sandra and Dwight for their provincial election next year. Is this what they really talked about at their meeting earlier this month?]

    Hosting a local stopover on the Red Bull Air Race World Championship circuit doesn't come cheap -- Finance Minister Dwight Duncan said Ontario is committing up to $10 million over the coming two years to be the Canadian leg's lead sponsor. But the benefits, both immediate and potentially long-term, are huge, the Windsor-Tecumseh MPP said Friday in announcing the June 5 and 6 event. [No it does not come cheap considering it was $3.2 M before for ONE year. Oh, and how much did Edgar pull in as sponsorship money? What increased the value other than political expediency? Has anyone ever done an audit and quantified exactly what the benefits are giving that money to local festivals as an example rather than to a profit making group like Red Bull. How much is being given to the Windsor International Air Show since it deals with airplanes too?]

    "Last year, the Windsor race attracted a viewership of over one billion people worldwide ... it's an enormous tourism marketing opportunity for this community," he said. [Funny, even Red Bull does not use a number like that and says on its website
  • "As the Red Bull Air Race World Championship reaches a vast global audience of over 300 million in more than 180 countries via its television programme"

Exactly how many people came to this region from the one billion people who watched on TV?]

Drawing almost 300,000 spectators to the riverfront last year, the 2010 event is anticipated to generate "hundreds of millions of dollars in spinoff benefits to the community," Duncan said in a joint announcement with fellow cabinet minister and Windsor West MPP Sandra Pupatello and Mayor Eddie Francis. "The Red Bull pours in a most immediate economic stimulus, filling up hotel rooms, filling up restaurants," said Francis. [Red Bull says the

  • "Race attracts an average audience of 400,000 at each race. Even back in 1909 in Reims the air race drew in a crowd of 300,000."

We have not progressed much since then have we. But here are some more facts that Dwight has forgotten it seems. 750,000 people attended in year one of the Red Bull race. Red Bull expected a million in year two but only 290,000 people came last year (220,000 here and 70,000 in Detroit). Not a good sign for year 3 since it is the same old, same old at high admission prices for a people who have financial woes. As for the great benefits, go back and check the singular lack of stories from businesspeople who were pleased.

Oh Dwight, "hundreds of millions of dollars in spinoff benefits to the community." Last year, you only were "Estimating that the event generated $100million in economic activity."

Hundreds of millions... "The championship tournament of men's NCAA basketball is expected to generate $30 million to $50 million in economic spinoff for the area -- including more than $3 million in Windsor." Most of the 1800 hotel rooms in Windsor were filled with out-of-towners for the weekend too.

Oh Dwight, "Francis figures the Super Bowl will bring in between $80 to $100 million to Windsor and help the city attract a CFL expansion team." Boy, was he wrong. The reality which I believe to be overstated:

  • "The numbers are in for the impact of February's Super Bowl XL on Windsor's economy, but there are differing views on how successful the event actually was.

    The city's role in co-hosting the big game with Detroit in February resulted in a cash injection of "at least" $20.3 million into the local economy, according to the local convention bureau Gordon Orr...

    But Coun. Alan Halberstadt said the success of the event was more spotty than organizers would have the city believe. "Remember they were talking about an impact of $80 million to $100 million, so $20 million would be somewhat short," Halberstadt said...

    Exit surveys conducted by the Detroit Host Committee, in conjunction with figures supplied by the NFL, showed the average guest spent $339 per day during their visit and the typical visitor stayed for 2.8 days, resulting in $9,265,209 in direct spending for accommodation alone in the Windsor area.

    Orr added that a standard formula, traditionally used by municipalities and convention bureaus assessing the economic impact of an event, is to take the amount spent on accommodation and multiply that by a factor of 2.2, to arrive $20.3 million in estimated economic benefits to the community."

Red Bull is more like Wrestlemania I would think. Remember the hype:

  • "This is going to be huge," vowed Carl DeMarco, president of WWE Canada. "It will be an incredible economic impact for Windsor. People are going to fill up your hotels and restaurants.

    This is our Super Bowl event...

    DeMarco, who headed Wrestlemania 18 in Toronto, said it attracted people from around the world.

    Asked what the influx of WWE fans will bring to this city, DeMarco responded: "Money and spending power. There will be economic benefits. In Toronto, it was a huge success, not only for Toronto, but the surrounding cities. "

The reality was different:

  • "WrestleMania 23, which rattles Ford Field Sunday night, will not generate as much economic spinoff as did Super Bowl XL in Detroit last year because it doesn't attract corporate attendees.

    "It's more of a regional event," Orr said, noting that
    Windsor hotel rooms have not had much increase in bookings.

    "Rooms are not required for the majority of ticket holders."

Isn't this stange too, how Gord Orr justified our spending of $60K to be a WWE sponsor. Sounds familair doesn't it:

  • "The benefit of the event has been the advertising and exposure that Windsor has received," Orr said, noting WWE superstar appearances in town and references to Windsor on WWE posters and its website.

    "We're proud of our sponsorship."]

The province had to dig much deeper into its pockets -- the $5 million per year is a significant jump over last year's $3.2-million commitment. [Yup it is big jump for TWO years.]

"This is very powerful, we could not buy that level of advertising," said Pupatello. [The Star could use that $5M of advertising for local festivals instead of giving it to the for profit Red Bull organization. That would represent hundreds of pages of ads in the Star at City rates!]

The event features high-speed aircraft pulling sharp low-flying turns through a series of giant pylons floating on the Detroit River.

"We're really excited to be returning to Windsor," Red Bull Air Race CEO Bernd Loidl said in a news release. "It's a great venue in an exciting city, and last year's race there was a huge success." [The $10M is not so bad either]

The ministers and mayor said Red Bull's local event will also serve as "backdrop" for more important matters, including getting Windsor's name out to a global audience and bringing in investors and business types. Francis said potential investors from across North America were brought in last year. [I know, another world stage event for Windsor. How many of these potential investors and actual freeloaders at Edgar's Casino suite actually invested here?]

Pupatello, Ontario's Minister of Economic Development and Trade, likened Red Bull to the international F1 race car circuit which draws in business people "whose playground are these events ... these are the types of people who need to be made aware of the industrial opportunities in this region." [Over the last 2 years, how many playboys and girls did Sandra convince to invest here?]

The three political leaders said the two levels of government and the local development commission will be pulling together to make sure Windsor's "story" is shared with key investors and corporate decision-makers.

More room will also be made for the jetsetters. Phil Roberts, director of operations at Windsor Airport, said 77 private, corporate and chartered aircraft flew in for last year's three-day event but that at least 50 more had to be turned away. He said plans are underway to make room for up to 225 visiting aircraft this year. [Last year Edgar said "Francis said 60 aircraft landed at Windsor Airport over the weekend to unload international guests and another 50 were turned away because they were ineligible to land here."]...

Windsor is joining a whole new league, with last week's announcement by Red Bull organizers that New York City and Berlin have been added to its 2010 schedule. Pupatello said she was at the Paris Air Show last year when she saw Windsor's Red Bull event being profiled on a French television.

"It was unbelievable ... there I was on the other side of the world, watching my city," she said, predicting "a stellar weekend for us." [I hope Sandra stayed at more reasonably priced hotels this time. As Gord told us:

  • "For Windsor West MPP Sandra Pupatello, the revelation that she burned through more than $100,000 in travel expenses over 12 months...On Monday we learned that this zealous guardian of taxpayer dollars isn't so protective of the public purse that it would prevent her from flying business class and staying at the kind of five-star hotels most of her hard- pressed constituents will only visit in their most exotic dreams."

I wonder if she still stayed at the The Hotel California in Paris where she had spent $2,701 for a six-night previously. But she learned that from Dwight:

  • "While serving as energy minister in 2004, Duncan and four staff members racked up a staggering $50,000, more than $5,500 a day, on a nine-day business trip to Brussels, Rome and Copenhagen that included a $789 steak lunch for six people..."]

"This is so exciting. I can't think of a better thing for the summertime for our city," said Downtown Windsor BIA chairman Ron Balla. Unlike last year, with a nasty civic workers strike and Ouellette Avenue construction to contend with, Balla said the downtown will be pulling out all stops. [Actually I can Ron, festivals every weekend all over the City and County that would attract millions of people by the end of the summer rather than giving $5M to a private Company for one week-end a year for their bank account]

A large chunk of Ontario's multi-million-dollar commitment is for marketing, all of which will focus on Windsor. Asked what Windsor is committing to the show, Francis said the municipality will follow "the same model" as last year's, which saw Red Bull largely given the run of parts of the airport and riverfront last year for $125,000, as well as in-kind assistance of police, fire, traffic and parks staff. [The same marketing model, OMG. I should hope they would do better. How many of those 30,000 tickets were actually sold in Windsor? And we can suspect that Edgar really gve them a sweet-heart deal on that $125K so they could do things that the City could not do on the "leased" City property to get around the CUPE strike.

errrrr, Edgar, about that focus on Windsor. This time please, I wonder if our Tourist Bureau will let them know that one of our best attractions in Windsor is NOT Niagara Falls as they put on their website last year!

Oh, do we ever need another newspaper here! And perhaps as well a Minister of Finance who can do the math.