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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, expansion and relocation, and NHL revenues.

Edmonton rejects Oiler [Arena] bid for more taxpayer dollars

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Old
09-25-2012, 10:06 PM
  #451
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Quote:
Originally Posted by smackdaddy View Post
This perception is quite wrong, and could ultimately lead to the Oilers leaving Edmonton. It is this type of thinking that is rotting Edmonton to the core.

Many people say "oh, it's not possible we pay high ticket prices, we're great fans, etc" unfortunately after living there for 10 years the reality of the economic situation goes far beyond the arena and stems right back to the decisions in the late 80's that caused that city to stagnate for 20 years while a more progressive city like Calgary reaped the rewards.

The feasibility of the Oilers moving forward almost 100% depends on the arena being built. The Northlands Coliseum was built to sustain an 80's NHL market that is nowhere near as large as it is now. With 16K seats and almost zero residual amenities such as a restaurant, bars, shops, etc it is a relic. It is absolutely correct for Katz to say that the Oilers need a new arena to remain viable.

Most people think, "Blah blah revenues, blah blah fan support" but don't have a clue about the economic status of the Oilers who by all accounts are losing money on a yearly basis. Maybe if the cap remained at $39-45M we could state yeah, it's feasible, but unfortunately it looks like the $60M cap and 50-odd some floor are here to stay. The NHL is becoming bigger and generating more revenue than ever. This has the effect of leaving "smaller market" teams like the Oilers behind because they are only "small market" because they are only able to stuff 16K fans a night in and get zero cake revenue from what a new arena like Katz is proposing would give.

The entire premise of the new arena is based on ensuring the viability of the Oilers first and foremost going into the future and that is one that Rexall is not able to sustain. The Oilers and the league have outgrown it. In this small market town where ticket sales won't necessarily bring in the bread and butter, there needs to be a huge development project such as the one Katz is proposing to see the Oilers through the next 20 years.

Otherwise, the Oilers will continue to lose money more and more each year while having record high ticket prices. How many road blocks will Katz have to face until he says, "screw this!" and sells the team? I think Edmonton has run out of Batman-esque billionaires willing to do this much for the Oilers and if Katz bails, the new owners will most definitely not be willing to invest in Edmonton and most likely move the team to a new market with a new arena begging for an NHL team. It's definitely not outside the realm of possibility that the Oilers move, and in fact is a very real threat. Anyone can remember how close we were to losing them the last time and it came down to the 11th hour literally.

Edmonton is a city who are unwilling to see the big picture and instead focus on these stupid debates about a million here or a million there. The city will have to decide once and for all (And probably very soon) if the Oilers are something they are willing to invest in as a whole because they ain't stayin in Rexall past 2014 I can tell ya that much.
Change "Oilers" to "Coyotes" and this is all I remember hearing about Glendale/Phoenix until the new arena opened. Then, with the new arena, everything was supposed to be rosy. Not the case at all. If it were me (and it's not . . . I live in Southern Ontario) I'd rather see them walk than pay for their arena.

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09-25-2012, 10:11 PM
  #452
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Originally Posted by Gm0ney View Post
One of the NHL's main businesses is extorting free arenas out of taxpayers. That's one big reason why they're fighting so hard in Phoenix, against all odds - Glendale went to bat and laid out hundreds-of-millions to build a new arena. If the NHL had abandoned the city 3 years ago, they'd have no credibility at this stage - the City of Edmonton certainly can't say the NHL has turned its back on the Coyotes.

So the point is, "build us arenas and we won't abandon you"...or vice versa.
If the NHL were serious about keeping a team in Glendale they would lower the asking price to the point that a sale would have closed long ago.

Instead, they want to recover every thin dime they've spent on the franchise, at the expense of the taxpayers of Glendale.

Glendale is not a good example of the NHL doing the right thing for a city. In fact, it's the opposite.

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09-26-2012, 12:22 AM
  #453
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If the NHL were serious about keeping a team in Glendale they would lower the asking price to the point that a sale would have closed long ago.

Instead, they want to recover every thin dime they've spent on the franchise, at the expense of the taxpayers of Glendale.

Glendale is not a good example of the NHL doing the right thing for a city. In fact, it's the opposite.
Apparently the league was ready to sell the Coyotes to TNSE and have the team relocate to Winnipeg in 2010. The Thrashers cost TNSE $170 million a year later ($110 million to ASG, $60 million relocation fee), so that would've been the ballpark for the Coyotes. Of course, $170 million to keep the team in Glendale doesn't make much sense...but you can't let someone buy a franchise for much less - it would ostensibly hurt other franchise values.

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09-26-2012, 01:00 PM
  #454
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mirtle: Wayne Gretzky: ‘Probably zero’ chance Oilers are relocated http://t.co/mIRkBDoy

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09-26-2012, 01:19 PM
  #455
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mirtle: Wayne Gretzky: ‘Probably zero’ chance Oilers are relocated http://t.co/mIRkBDoy
At one time I thought that there was probably a zero chance that Mr. Gretzky was ever going to be relocated from Edmonton... and that day did come to pass.

When you get billionaire/millionaire owners who think it fair game to blackmail a city just because they don't want to pay anything out of pocket... anything is possible.

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09-26-2012, 01:28 PM
  #456
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Originally Posted by cbcwpg View Post
At one time I thought that there was probably a zero chance that Mr. Gretzky was ever going to be relocated from Edmonton... and that day did come to pass.

When you get billionaire/millionaire owners who think it fair game to blackmail a city just because they don't want to pay anything out of pocket... anything is possible.
Indeed we had that happen just prior to the sonics leaving. Bennett tried to black mail the region into trying to build a new arena with out him paying a penny. It didn't work and he moved the team to OKC.

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09-26-2012, 01:34 PM
  #457
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Indeed we had that happen just prior to the sonics leaving. Bennett tried to black mail the region into trying to build a new arena with out him paying a penny. It didn't work and he moved the team to OKC.
And then you ended up building one anyway in hopes to lure a franchise back. Lesson learned?

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09-26-2012, 01:47 PM
  #458
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And then you ended up building one anyway in hopes to lure a franchise back. Lesson learned?
It won't be in hopes to lure a franchise back. It'll only be built IF a NBA franchise is secured. Current agreement says NBA must be secured.

Seattle would have to approve it if NHL comes first. Current agreement says NHL being secured only the 80m from county kicks in.

Seattle doesn't want to be like Kansas City and have an empty arena. I do not see Seattle having any problems landing a NBA team.

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09-26-2012, 02:15 PM
  #459
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Originally Posted by smackdaddy View Post
Presenting, the new Downtown Edmonton Arena

Do you even realize that Katz had a deal in place with the city last year? This isn't a bureaucracy issue. The deal is in jeopardy because Katz decided at the last minute that he wants an extra $6 million per year from the city. I'm not sure how anyone can miss it but that $6 million would cover Katz' mortgage payment to the city. That effectively would mean that he pays absolutely nothing for the arena but receives revenue from all hockey and non hockey events 48 weeks out of the year. The city gets absolutely nothing.


Quote:
Originally Posted by Elliotte Friedman
3. Katz was to pay the arena's operating fees and $192.5 million over 35 years to cover construction costs in exchange for the profits from all arena events for 11 months of a calendar 12, plus naming rights estimated at approximately $1 million per year, plus city advertising worth another $2 million per year.

4. The deal is in jeopardy because Katz argues he was promised another $6 million per year to offset the costs, which city councillors say is not true. Asked to meet in a public session, Katz refused, although he has granted interviews to The Edmonton Journal, The Edmonton Sun and CHED Radio.

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09-26-2012, 02:26 PM
  #460
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Here's the problem with "build it himself" attitude. Getting the loan for the project will be very difficult when he's losing money already. Ottawa went bankrupt due to it's arena. Banks don't just give out 200+ million dollar loans on hunches it will work out. He may have tried to finance an arena and been rebuffed.

Side note: Nice to know that Winnipeg is getting Government assistance like most NHL teams do.
Katz is not losing money. The Oilers made an $17 million dollar profit last year. The only money he's "losing" is the revenue he doesn't get from concerts which is fair considering the fact that he does not own the arena and pays a pittance to rent it.

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09-26-2012, 02:37 PM
  #461
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I can personally guarantee you if what katz is doing now is what Hansen tried to do that during the initial talks with Seattle and king county prior to the announcement last February. There wouldn't been an announcement last February.

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09-26-2012, 04:31 PM
  #462
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Quote:
Originally Posted by smackdaddy View Post
Presenting, the new Downtown Edmonton Arena

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Originally Posted by silvercanuck View Post
Do you even realize that Katz had a deal in place with the city last year? This isn't a bureaucracy issue.
I think you might have missed the point. I don't think it was a commentary on bureaucratic interference, I think he was illustrating what a no-frills arena might look like....

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09-26-2012, 07:19 PM
  #463
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Originally Posted by gstommylee View Post
It won't be in hopes to lure a franchise back. It'll only be built IF a NBA franchise is secured. Current agreement says NBA must be secured.

Seattle would have to approve it if NHL comes first. Current agreement says NHL being secured only the 80m from county kicks in.

Seattle doesn't want to be like Kansas City and have an empty arena. I do not see Seattle having any problems landing a NBA team.
As Kansas City has a profitable arena, despite no major league anchor tenant, it might be a poor example.

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09-26-2012, 07:26 PM
  #464
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If the NHLPA was looking for an example of greedy demands from an owner, they found their poster boy in Edmonton. Why players haven't filled twitter up about it yet is beyond me.

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09-26-2012, 07:30 PM
  #465
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As Kansas City has a profitable arena, despite no major league anchor tenant, it might be a poor example.
Seattle/King County will own the arena and they don't want it to be an empty arena with no major league tenants. It would be march harder and take longer to pay off the 247m in public bonds with out major tenants.

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09-26-2012, 08:59 PM
  #466
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If the NHLPA was looking for an example of greedy demands from an owner, they found their poster boy in Edmonton. Why players haven't filled twitter up about it yet is beyond me.
Because players today love to **** on and disrespect this city. It's a terrific place to raise a family but I suppose that it's lacking for a young, hip millionaire.

They're probably cheering the idea of the Oilers in Seattle and neglecting the fact that the team's owner is making insane demands.

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09-26-2012, 09:05 PM
  #467
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Because players today love to **** on and disrespect this city. It's a terrific place to raise a family but I suppose that it's lacking for a young, hip millionaire.

They're probably cheering the idea of the Oilers in Seattle and neglecting the fact that the team's owner is making insane demands.
You're assuming a lot. Maybe you should be blaming crappy management and a basement dwelling mentality for your issues. When Ryan Smyth cries like a baby when kicked to the curve, while Hall and Eberle sign long term deals, you don't have much evidence to stand on. This from a Flames fan.

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09-26-2012, 09:14 PM
  #468
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You're assuming a lot. Maybe you should be blaming crappy management and a basement dwelling mentality for your issues. When Ryan Smyth cries like a baby when kicked to the curve, while Hall and Eberle sign long term deals, you don't have much evidence to stand on. This from a Flames fan.
Those aren't really good examples, man. Ryan Smyth grew up as an Oilers fan and is a small town boy. When he came back he flat-out admitted that he couldn't stand the Los Angeles lifestyle. The majority of players in the NHL today worship it. Look at all of the players who are scrambling to play in Manhattan. Hall/Eberle have been here for a couple of years and like Doug Weight before them they've taken a liking to the region -- the difference being we were actually able to pay the former.

Am I overreacting a little? Yeah, probably. Six years of losing, arena drama and a guy like Pronger leaving for shallow reasons will do that to a guy. I certainly blame management for tanking willingly, but hopefully we're close to the end of that... nonsense.

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09-26-2012, 10:00 PM
  #469
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If the NHLPA was looking for an example of greedy demands from an owner, they found their poster boy in Edmonton. Why players haven't filled twitter up about it yet is beyond me.
If there was ever a time to get the fans back on their side it is now.

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Originally Posted by Moonlapse Vertigo View Post
Because players today love to **** on and disrespect this city. It's a terrific place to raise a family but I suppose that it's lacking for a young, hip millionaire.

They're probably cheering the idea of the Oilers in Seattle and neglecting the fact that the team's owner is making insane demands.
Quote:
Originally Posted by MarkGio View Post
You're assuming a lot. Maybe you should be blaming crappy management and a basement dwelling mentality for your issues. When Ryan Smyth cries like a baby when kicked to the curve, while Hall and Eberle sign long term deals, you don't have much evidence to stand on. This from a Flames fan.
Quote:
Originally Posted by Moonlapse Vertigo View Post
Those aren't really good examples, man. Ryan Smyth grew up as an Oilers fan and is a small town boy. When he came back he flat-out admitted that he couldn't stand the Los Angeles lifestyle. The majority of players in the NHL today worship it. Look at all of the players who are scrambling to play in Manhattan. Hall/Eberle have been here for a couple of years and like Doug Weight before them they've taken a liking to the region -- the difference being we were actually able to pay the former.

Am I overreacting a little? Yeah, probably. Six years of losing, arena drama and a guy like Pronger leaving for shallow reasons will do that to a guy. I certainly blame management for tanking willingly, but hopefully we're close to the end of that... nonsense.
Moonlapse is right. Partly the media take a dump on the inland, part kids wanting that big house, big party lifestyle. And yeah I bet some want the oilers to move. Some will also want them to stay. To be honest you aren't, its just that guys dont/wont go public because of the backlash. It's not just NHL players either. And family does not matter with the 1 out of 2 marriage ending in failure.

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09-26-2012, 11:18 PM
  #470
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If the NHLPA was looking for an example of greedy demands from an owner, they found their poster boy in Edmonton. Why players haven't filled twitter up about it yet is beyond me.
how much did the richest canadian citizen pitch in in winnipeg? Do they get subsidized?

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09-26-2012, 11:46 PM
  #471
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how much did the richest canadian citizen pitch in in winnipeg? Do they get subsidized?
Are you making a point? Make it...

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09-26-2012, 11:53 PM
  #472
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There is no better market available in all of NA for Katz, so I wouldn't get too worried about a move. Seattle is a joke, a market with no proven NHL fan interest. It'd be a total crapshoot, unless the city was willing to give Katz some kind of Jamison-like Glendale deal (which, let's be honest, ain't gonna happen). Quebec is off the table, unless Katz sells the franchise. Southern Ontario has loads of issues with the Leafs' territorial demands. And so on. This Seattle visit was just ridiculous.

Katz leaves over Edmonton council turning down this extortion, he'll just cut off his nose to spit his face. There is no pot of gold out there for the NHL in other available cities right now.

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09-27-2012, 12:05 AM
  #473
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There is no better market available in all of NA for Katz, so I wouldn't get too worried about a move. Seattle is a joke, a market with no proven NHL fan interest.
If its a joke then why in the world has the NHL been trying to put a team there in Seattle. Of all locations they could put a team in NA Seattle is the best market available. The only reason why we do not have a team now is cause of lack of proper NHL facility and that is going to get solved.

Do not underestimate the Seattle market and the entire pacific northwest region. People will come to view games from all over the state, from other states and even from outside this country.

It'll create a rivalry with Vancouver that is within driving distances.

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09-27-2012, 01:50 AM
  #474
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Originally Posted by gstommylee View Post
If its a joke then why in the world has the NHL been trying to put a team there in Seattle. Of all locations they could put a team in NA Seattle is the best market available. The only reason why we do not have a team now is cause of lack of proper NHL facility and that is going to get solved.

Do not underestimate the Seattle market and the entire pacific northwest region. People will come to view games from all over the state, from other states and even from outside this country.

It'll create a rivalry with Vancouver that is within driving distances.
Seattle does have a history of getting **** done when they want something. Not to mention the city isn't the same one that tried for an earlier expansion.

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09-27-2012, 07:27 AM
  #475
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At one time I thought that there was probably a zero chance that Mr. Gretzky was ever going to be relocated from Edmonton... and that day did come to pass.

When you get billionaire/millionaire owners who think it fair game to blackmail a city just because they don't want to pay anything out of pocket... anything is possible.
At this point in the deal Katz will be on the hook for approximately $5M per year towards the cost of the building. A ticket tax, which is really will generate about $7M a year for the City as a conservative estimate. Because it is called a tax it might seem it is not coming from the team but this is money that they could just as easily roll into the price of the tickets and keep for themselves. (Winnipeg gets such a tax and then forwards it back to the team). And of course there is the small matter of the OIlers paying all of the operating costs of the arena beyond a $6M number that was suppose to be covered by VLT's (sound familar).

Do you feel the same way about TSNE? Did they blackmail the City of Winnipeg and the Province? Are you outraged by their behaviour?

Katz has been a PR nightmare. But to suggest that he is asking for anything more than what the guys in TNSE get is wrong. And in the end, they own the building and Katz would have 0 equity for a $100M investment.

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