: News Article:
New Arena deal agreed to by city and Katz group:mod warning #616
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05-14-2013, 08:56 AM
Join Date: Jun 2006
Originally Posted by
A lot of other factors contributed to Ottawa and Vancouver's owners having to sell. The loans for Scotiabank were called in because Enron croaked and they didn't have the capital to pay them right out. Vancouver had overruns on the arena, lost revenue on the 94 lockout and paying the expansion fee for the Grizzlies might have tipped the pot. Building a rink was not
reason for the bankruptcies and shouldn't scare off people wanting to build arena's privately.
Building the arena is exactly what this city needs, but I don't agree with the financing. The way I see it, Katz can pay for the arena and the city can pay for the infrastructure. I'm not Katz, but I would like to think if I was in his position I would try and get the financing privately to build this arena for my hometown.
I understand owning a NHL franchise is not some hand over fist money generating machine and he has already helped Edmonton out by buying the Oilers. However, end of the day if this arena gets built that value and asking price for the Oilers increases to Katz benefit.
Owners in Ottawa were already broke by 2002 trying to keep up with the arena debt payments while dealing with a hostile government at the time. The Enron scandel was just the straw that broke the camels back, not the cause. They owed 360 million dollars, 200 million of it on the arena when they went under.
Arther Griffins was forced to sell the Canucks due to overextending on the building of GM/Rogers place, though the Grizzlies did play a part.
From 1988 to 1997, the Vancouver Canucks were owned by local businessman and philanthropist Arthur Griffiths, who had inherited ownership from his father, Frank. However, he was forced to sell his majority interest in the Canucks after overextending his resources trying to build a new arena, GM Place (currently known as Rogers Arena). As a result, he sold his majority share to American billionaire John McCaw, Jr.
Montreal is harder to nail down due to how long ago it was, but poor on ice results, inability to fill the brand new arena, a bottomed out Canadian currency, and poorly run internal financials all played a major role in the Molson brothers selling the majority stake. Add in that there were no local owners, and the team was barely breaking even, there was a very real possibility that the Canadiens wouldn't keep playing in Montreal at the time.
You can't really pin it on the arena itself, but it does show that no franchise is safe if the economy drops off again.
All three situations are very much cautionary tales for anyone who is looking to protect their financial investment over the long haul(10 - 30 years), which Katz has been doing right from the start.
Not sure why people get so down on Katz anyways, he's a billionaire businessman looking to get the best deal possible for himself. If anyone has a real issue with the deal, they should take it up with their publicly elected officials who have spent the majority of the negotiations working for Katz instead of representing their electorates, it's like hating Horcoff for the contract the team offered him.
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