View Single Post
Old
05-14-2013, 10:50 AM
  #1
s7ark
Moderator
TheWorstEver
 
s7ark's Avatar
 
Join Date: Jul 2003
Country: Canada
Posts: 23,197
vCash: 500
New Arena Thread: Rogers Place? Yawn...

Old thread passed 1000.

Here are some posts.

Quote:
Originally Posted by Behind Enemy Lines View Post
Complete fallacy.
Recommend you read the following:
http://mowatcentre.ca/pdfs/mowatResearch/31.pdf

Page 11:
The Edmonton Oilers are a good example of how a small Canadian market with a high level of interest in hockey can be a better location for a team than a large American city whose residents have only a middling level of interest in the game. All else being equal, a team located in a big American market such as Phoe- nix, Miami or Atlanta should have nothing but ad- vantages when compared to a small-market Canadian team. But all else is not equal. A Canadian city of just over one million has far more hockey fans than a Sun Belt city of more than four million. (See Table 4)

Page 13:
Our analysis controls for the border and we come to a different conclusion: a team’s ability to generate revenues correlates strongly with the population of its home market—so long as you control for the presence of the Canada-US border.

Toronto is a more profitable market than Ottawa and New York is a more profitable market than Buffalo. But a small Canadian city the size of Edmonton is a more profitable market than a big Sun Belt city the size of Atlanta. Levitt, in effect, concluded that because Edmonton is a more profitable market than Atlanta there is no correlation between the size of a city and its profitability; instead he should have concluded that being a Canadian city—even a small one—makes a team much more likely to be profitable.

Consider:
• Canada’s six NHL teams are only one-fifth of the NHL’s 30 fran- chises—yet Canada generates nearly a third of the league’s rev- enues.
• Edmonton, Calgary and Ottawa are three of the smallest markets in the NHL, yet these franchises enjoy arena gate revenues that exceed almost every American franchise.
• The rights to broadcast NHL hockey are the most important deals in the Canadian television market. In the US, the NHL does not even have a proper national network TV deal.

Oh ya, and the rinks in Montreal, Toronto, Ottawa, and Vancouver were built by private investment.

Don't be so naive to think this is as simple as a 'progress v no progress' issue. Scary when uninformed people buy into simple, manipulative P.R. Without the benefit of looking deeper into the heart and reality of the issue.
Quote:
Originally Posted by raab View Post
Scary when you realize that all the owners that built rinks were forced to sell and declare bankruptcy. Yea, that's a model I want to see the Oiler's owner taking. And what about a big city with hockey interested fans? I can almost guarantee a team goes to Seattle if they build a new arena.
Quote:
Originally Posted by Peter Zezel View Post
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 the 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.
Quote:
Originally Posted by Replacement View Post
Nice post.

You could go into a lot more detail I'm sure but you captured the argument. Some confusion abounds around events, results, and retrospection which leads to fictions commonly being created around this issue.

For instance the notion that funding arena's causes its owners to go broke. While people may or may not be invoking causality in that interaction they most clearly are arguing on that behalf as if its something an owner should steadfastly avoid lest they succumb to going broke on the basis of partially funding an arena.

Heres an instance where the pro arena at any cost side is clearly utilizing fear mongering as a means to try to sway favorable opinion on any nature of deal.

Katz will not go broke on the basis of contributing an extra 50-100M on an arena. An owner with multibillion in assets that has recently leveraged a subtantial amount of that into liquid assets through sales is arguably in a position to not only fund an arena, but do so without loan (not recommending this as a course of action, just saying)

Nobody at this point is looking at a massive change in relative contribution. But for Katz to go 50/50 with the city to make up any outstanding amount that is owing is feasible, and lets make it clear, Katz could easily enough do that if he wished.

Aside from what the Katz team itself may say through vested interest about "losing money on the Oilers" (theres no independent substantiation of this and none provided even though the city has asked several times) its quite clear that this becomes a matter of how much, or if, Katz wants this development to continue.

The request for a 6M/yr subsidy in an already one sided deal gave indication not too long ago that Katz was not bargaining in good faith.

It is curious why it falls on the city to fund and front each extra means as shortfalls come up. I could add shortfalls that are now increasingly politically unpalatable to fund due to specific actions Katz and his team have taken, which have been recently outlined on this thread.
Quote:
Originally Posted by I am the Liquor View Post
Is that right?
Quote:
Originally Posted by raab View Post
Well if I'm Katz and I'm not getting the arena I'm selling off the Oilers and putting my money into a better investment. Or I'm building my own arena in one of the surrounding counties like strathcona, parkland, or sturgeon for significantly cheaper and letting edmontons downtown rot.
Quote:
Originally Posted by Replacement View Post
So perhaps you're engaging in projection here rather than accurately reflecting the present deal, and issue at hand.

Its unfortunate you have this opinion, and I'm not sure how its derived, but it seems quite negative.
Quote:
Originally Posted by Billybaroo View Post
Well, considering he owns a bunch of that land adjacent to the arena and stands to profit off it big time if his little extortion attempt is succesful, I really doubt that is in his playbook.
Quote:
Originally Posted by raab View Post
Not exactly but close, Molson was forced to sell 80% of the Canadians to Gilette in 2000 which they bought back in 2009. And John Bitove who started the ACC in Toronto ended up selling the raptors to MLSE. It should be noted that the teachers union who was a 66% stake holder in MLSE sold in 2011 to Bell and Rogers.
Quote:
Originally Posted by raab View Post
Have you not seen how this deal has been mismanaged on city councils side as much as Katz's side? Or how the citizens of Edmonton continue to ***** about how they're getting screwed over by a billionaire. If I'm Katz and this doesn't go through I build in the out lying area and have a half decent facility worth around roughly 250M. Then I don't have to deal with city council, and I'm not called a thieving billionaire for the rest of my life by half of edmonton. The best part is that if he did build an arena that the city would probably build and LRT line out to it worth 200-300M.
Quote:
Originally Posted by raab View Post
What land does he own adjacent to it? I had heard that he had only bought the land for the arena district.
Quote:
Originally Posted by Section337 View Post
In my opinion, the Oilers are the smaller part of Katz's investment concerns, it's more about the real estate development around the arena, than the team inside of it. Selling the team means he is accepting a lot less profit than opportunity presenting itself.

And so, I think this is where they need to be looking for the extra capital. Since, I don't like the concept of certain private industry gaining competitive advantage over other private industry through actions of a government, those who look to benefit in the long term should do so with additional offsetting payments. Don't be taxing those people who have started building, before an arena is off the ground, charge those who are waiting until that competitive advantage is in place. Which is a group larger than Daryl Katz.

New hotel, anchored by arena, is built, it is required to charge a $5 a night surcharge (not charged at the Delta or Sutton Place...) on each room for ten years. New business tower, anchored by the arena, is built, each square foot of leased space has a surcharge for the first term. I'm sitting in a shiny new seat, in a building that I think I can escape from in the case of an emergency, I pay $N per ticket for N years...
Quote:
Originally Posted by Tarus View Post
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.

http://www.cbc.ca/archives/categorie...-bankrupt.html

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.

http://www.theglobeandmail.com/news/...rticle7310812/

http://en.wikipedia.org/wiki/Vancouver_Canucks



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.
Quote:
Originally Posted by Beerfish View Post
Nice interesting bit about the Brooklyn arena that Mandel and the crowd were visiting the other day. They were talking about all the planned development around the arena and how it was supposed to be on a 10 year schedule....which then got pushed back to a 25 year schedule. And thus all the 'promised' development looks like vapor ware. They also said for the Edmonton deal they have no time table at all and no independant person to oversee and make sure things are going as promised.

s7ark is offline