Penguins moving to Quebec ???

Guy Legend

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Another clueless poster, and being from Canada makes it even worse...

- Did you know Pittsburgh was the birthplace of professional hockey?

- Did you know Pittsburgh was the 2nd NHL team in the U.S.?

- Did you know Pittsburgh was in the international pro league when the NHL was an amateur league?

- Did you know Canadian players used to come to Pittsburgh to play because they had the best artifical ice in North America?

- Did you know 40,000 Penguin Fans showed up at the airport at 2:00 AM to greet their team returning home with the Stanley Cup?

I'll bet there is a lot you don't know about Pittsburgh's hockey history, or your own hockey history for that matter, as it would seem. How about a history lesson...

http://hfboards.com/showthread.php?t=198796

Great post.

It's astounding to see some people display such blatant ignorance, being so quick to forget the strength of some hockey markets.

Pittsburgh no doubt is a better (and proven) hockey market than any of the other proposed destinations. The city deserves to keep the Penguins and to me it appears that is happening.
 

discostu

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I was just pointing out that most arenas were not fully privately financed...nothing more nothing less.

Really I don't care how the Pens get an arena built, It just needs done.

I don't know where you got your information regarding Ottawa, but, the building was built from pretty much all private sector financing. Perhaps there was some government grant involved, but, I seriously doubt it. Much has been made of the fact that Ottawa had to build it's own interchange, which it then had to transfer back to the province at a price of $1. You also used Ottawa as an example of a team where non-hockey events contribute a great deal of revenue. Outside the odd concert, the arena is rarely used.

I think the point that Northern Dancer is trying to make is, that to be a truly solid NHL market, a team should be generating enough revenue from its hockey operations to sustain itself, and to pay for a full arena on its own. If that is the case, then there would be no shortage of investors in that market. If it can't, it means that you're relying on external funding sources (i.e. government subsidization, cost sharing with other sports franchises, an owner willing to lose money etc.).

In the end, Pittsburgh is struggling financially because it isn't strong enough hockey market on its own, and, the process of getting subsidized by the government in some way (i.e. slot licence) is taking a long time. This doesn't mean that the market isn't worthy of a franchise, because most markets in the NHL are being propped up in some way. In fact, that's part of the problem. Many of the most hockey viable markets can't keep up because the teams they are competing with for players are heavily subsidized, allowing them to yield larger payrolls. If every team had to pay for their own arenas and pay for their fair share of taxes, payrolls would likely be signficantly lower.
 

Northern Dancer

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I don't know where you got your information regarding Ottawa, but, the building was built from pretty much all private sector financing. Perhaps there was some government grant involved, but, I seriously doubt it. Much has been made of the fact that Ottawa had to build it's own interchange, which it then had to transfer back to the province at a price of $1. You also used Ottawa as an example of a team where non-hockey events contribute a great deal of revenue. Outside the odd concert, the arena is rarely used.

I think the point that Northern Dancer is trying to make is, that to be a truly solid NHL market, a team should be generating enough revenue from its hockey operations to sustain itself, and to pay for a full arena on its own. If that is the case, then there would be no shortage of investors in that market. If it can't, it means that you're relying on external funding sources (i.e. government subsidization, cost sharing with other sports franchises, an owner willing to lose money etc.).

In the end, Pittsburgh is struggling financially because it isn't strong enough hockey market on its own, and, the process of getting subsidized by the government in some way (i.e. slot licence) is taking a long time. This doesn't mean that the market isn't worthy of a franchise, because most markets in the NHL are being propped up in some way. In fact, that's part of the problem. Many of the most hockey viable markets can't keep up because the teams they are competing with for players are heavily subsidized, allowing them to yield larger payrolls. If every team had to pay for their own arenas and pay for their fair share of taxes, payrolls would likely be signficantly lower.

Thank-you, I could not have said it better myself.
:clap: :clap: :clap:
 

Pens1566

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I don't know where you got your information regarding Ottawa, but, the building was built from pretty much all private sector financing. Perhaps there was some government grant involved, but, I seriously doubt it. Much has been made of the fact that Ottawa had to build it's own interchange, which it then had to transfer back to the province at a price of $1. You also used Ottawa as an example of a team where non-hockey events contribute a great deal of revenue. Outside the odd concert, the arena is rarely used.

I think the point that Northern Dancer is trying to make is, that to be a truly solid NHL market, a team should be generating enough revenue from its hockey operations to sustain itself, and to pay for a full arena on its own. If that is the case, then there would be no shortage of investors in that market. If it can't, it means that you're relying on external funding sources (i.e. government subsidization, cost sharing with other sports franchises, an owner willing to lose money etc.).

In the end, Pittsburgh is struggling financially because it isn't strong enough hockey market on its own, and, the process of getting subsidized by the government in some way (i.e. slot licence) is taking a long time. This doesn't mean that the market isn't worthy of a franchise, because most markets in the NHL are being propped up in some way. In fact, that's part of the problem. Many of the most hockey viable markets can't keep up because the teams they are competing with for players are heavily subsidized, allowing them to yield larger payrolls. If every team had to pay for their own arenas and pay for their fair share of taxes, payrolls would likely be signficantly lower.

Pittsburgh is a strong hockey market. Their crappy arena/lease/deal prevents them from getting income from many sources that other teams enjoy (concessions, parking, lux. boxes, etc.).
 

discostu

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Pittsburgh is a strong hockey market. Their crappy arena/lease/deal prevents them from getting income from many sources that other teams enjoy (concessions, parking, lux. boxes, etc.).

You're missing the point.

If Pittsburgh was a completely self-sustaining market, they wouldn't need to lease a building. They would have enough revenues from hockey operations to pay for financing of their own building, where they would have complete control over all revenues.
 

Northern Dancer

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Pittsburgh is a strong hockey market. Their crappy arena/lease/deal prevents them from getting income from many sources that other teams enjoy (concessions, parking, lux. boxes, etc.).

Not to beat a dead horse but if what you say is true then someone is coining it somewhere. If the Pens have a crappy lease then the flip side is whoever owns the Mellon Centre must be ripping there brains out. Now if that were true don't you think they would be front and centre to keep the team in Pittsburgh. Something does not jibe.
By the way I am not anti-Pittsburgh it is a fine hockey town with lot's of support but there is a reason so many bidders want to move it.
 

Sens Rule

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You're missing the point.

If Pittsburgh was a completely self-sustaining market, they wouldn't need to lease a building. They would have enough revenues from hockey operations to pay for financing of their own building, where they would have complete control over all revenues.

That isn't really fair. That isn't really about the self-sustaining market for hockey but whether the Pens have a really rich owner with deep pockets that can either pay for a new arena or borrow the money to build one.

How can the Pens with porr revenue streams simply from having an old arena which they lease self sustain the building of a new arena?

Once the new arena was built they could sustain the costs of building it with the increased revenue streams from having a more profitable areana.

You still need someone with big pockets to finance the arena in the first place.
 

HandshakeLine

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In the end, Pittsburgh is struggling financially because it isn't strong enough hockey market on its own, and, the process of getting subsidized by the government in some way (i.e. slot licence) is taking a long time. This doesn't mean that the market isn't worthy of a franchise, because most markets in the NHL are being propped up in some way. In fact, that's part of the problem. Many of the most hockey viable markets can't keep up because the teams they are competing with for players are heavily subsidized, allowing them to yield larger payrolls. If every team had to pay for their own arenas and pay for their fair share of taxes, payrolls would likely be signficantly lower.

Absolutely wrong. Completely and utterly bone-headedly wrong.

Pittsburgh is struggling because they not only have a crumbling facility, but they are stuck with an outdated lease (courtesy of Howard Baldwin) that offers none of streams of revenue that most modern teams enjoy. The Pens gain little to no revenue from concessions, luxury boxes, and other staples that keep all of your "better hockey market" teams afloat. Gain a better lease and an arena that isn't a money pit on upkeep and I guarantee you the Pens will be in the black.

Also, how does having ownership without deep pockets (soon to be rectified by the sale of the team by the by) mean a market is not a true "hockey" market? :confused:
 

HandshakeLine

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Nov 9, 2005
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Not to beat a dead horse but if what you say is true then someone is coining it somewhere. If the Pens have a crappy lease then the flip side is whoever owns the Mellon Centre must be ripping there brains out. Now if that were true don't you think they would be front and centre to keep the team in Pittsburgh. Something does not jibe.
By the way I am not anti-Pittsburgh it is a fine hockey town with lot's of support but there is a reason so many bidders want to move it.

Actually, only two bidders have expressed any interest in moving it, and one has said he's willing to give serious consideration to the terms of the new lease and staying in the city. It's on the Pens' board under Arena talk, if you're interested.

Some company from LA actually has control of the day-to-day operation of the arena. Not the city, not the Pens.
 

Sens Rule

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Absolutely wrong. Completely and utterly bone-headedly wrong.

Pittsburgh is struggling because they not only have a crumbling facility, but they are stuck with an outdated lease (courtesy of Howard Baldwin) that offers none of streams of revenue that most modern teams enjoy. The Pens gain little to no revenue from concessions, luxury boxes, and other staples that keep all of your "better hockey market" teams afloat. Gain a better lease and an arena that isn't a money pit on upkeep and I guarantee you the Pens will be in the black.

Also, how does having ownership without deep pockets (soon to be rectified by the sale of the team by the by) mean a market is not a true "hockey" market? :confused:

Look at Ottawa. Banks lent Bryden and his group 100's of millions of dollars to build the Corel Centre and then it went bankrupt and the lenders got a fraction of the money lent out back. That kind of thing is a precedent for the Pens not getting bank loans to build a new facility without a guy with deep pockets to back it up like say Ted Leonis or Eugene Melynyk. Mario Lemieux doesn't have a billion dollars in assets to back up a $200 million loan.
 

HandshakeLine

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Look at Ottawa. Banks lent Bryden and his group 100's of millions of dollars to build the Corel Centre and then it went bankrupt and the lenders got a fraction of the money lent out back. That kind of thing is a precedent for the Pens not getting bank loans to build a new facility without a guy with deep pockets to back it up like say Ted Leonis or Eugene Melynyk. Mario Lemieux doesn't have a billion dollars in assets to back up a $200 million loan.

Of course. There is a huge precedent for that, especially considering the previous owners of the Pens went bankrupt too (due to terrible financial management, not attendence).

I'm just saying, if the Pens had a normal ownership group (like they seem to be heading towards with the sale), then we might not even be having this discussion-- there'd be an arena or the city would be much more willing to finance it.

By the by, there's only one group bidding for a move to Canada, and they want to move the team to Hamilton. Sorry, Quebec and 'Peg. Go drool over someone else's team. :)

http://postgazette.com/pg/06196/706082-61.stm
 

discostu

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Absolutely wrong. Completely and utterly bone-headedly wrong.

Pittsburgh is struggling because they not only have a crumbling facility, but they are stuck with an outdated lease (courtesy of Howard Baldwin) that offers none of streams of revenue that most modern teams enjoy. The Pens gain little to no revenue from concessions, luxury boxes, and other staples that keep all of your "better hockey market" teams afloat. Gain a better lease and an arena that isn't a money pit on upkeep and I guarantee you the Pens will be in the black.

Also, how does having ownership without deep pockets (soon to be rectified by the sale of the team by the by) mean a market is not a true "hockey" market? :confused:

I never said anything about Pittsburgh being a "true" hockey market or not. Those are your words. I'm not trying to make a statement about Pittsburgh hockey fans, I'm just commenting on what the revenue stream potential is in a market like Pittsburgh.

And there is nothing wrong about my post. If the revenue streams, and the potential revenue streams that would come from a new arena would be higher, then, the ownership would have no problems finding the capital to build it. That's what investors do. They look at various investments, they judge the potential returns, and, if those returns are high enough to justify the risks of the investment, that's where they put their money. It hasn't seem like there has been any investors willing to make that investment, without the proceeds that would come from a slots licence.

And there's nothing wrong with a market requiring a bit of propping up. Most markets in the NHL are (I personally don't like it, because I don't think it's the best use of taxpayer money, but, that's another debate). But, when you do rely on some form of subsidization, the team's fate is in the hands of politicians, and it makes the market unstable.

I'm not saying that Pittsburgh isn't a "true" hockey market, because, quite honestly, who the hell knows what that means. All I'm saying is that it appears, due to Pittsburgh rocky financial history, that there isn't enough revenue available to field an NHL team with an appropriate payroll and enough money to pay for its own facilities. That means they are not a self-sustaining market.
 

SammyTheBull

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I don't think the Penguins should move to Quebec City but I think Quebec could host an NHL team, if Ottawa can Quebec sure as hell can.
 

Pens1566

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I never said anything about Pittsburgh being a "true" hockey market or not. Those are your words. I'm not trying to make a statement about Pittsburgh hockey fans, I'm just commenting on what the revenue stream potential is in a market like Pittsburgh.

And there is nothing wrong about my post. If the revenue streams, and the potential revenue streams that would come from a new arena would be higher, then, the ownership would have no problems finding the capital to build it. That's what investors do. They look at various investments, they judge the potential returns, and, if those returns are high enough to justify the risks of the investment, that's where they put their money. It hasn't seem like there has been any investors willing to make that investment, without the proceeds that would come from a slots licence.

And there's nothing wrong with a market requiring a bit of propping up. Most markets in the NHL are (I personally don't like it, because I don't think it's the best use of taxpayer money, but, that's another debate). But, when you do rely on some form of subsidization, the team's fate is in the hands of politicians, and it makes the market unstable.

I'm not saying that Pittsburgh isn't a "true" hockey market, because, quite honestly, who the hell knows what that means. All I'm saying is that it appears, due to Pittsburgh rocky financial history, that there isn't enough revenue available to field an NHL team with an appropriate payroll and enough money to pay for its own facilities. That means they are not a self-sustaining market.

They have the same 'revenue streams' as other cities. Tickets, concessions, parking, etc.. They just don't receive anything other than gate due to the already mentioned, millions of times, horrible lease negotiated by baldwin. When they get the new building, they will also receive these streams that almost all other teams already get. And with their 90%+ attendance those 'revenue streams' will be quite enough to keep the franchise in the black.
 

discostu

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They have the same 'revenue streams' as other cities. Tickets, concessions, parking, etc.. They just don't receive anything other than gate due to the already mentioned, millions of times, horrible lease negotiated by baldwin. When they get the new building, they will also receive these streams that almost all other teams already get. And with their 90%+ attendance those 'revenue streams' will be quite enough to keep the franchise in the black.

Let me put it this way.

If they had all the extra revenue that they're currently losing out in their current agreement, plus the money they are paying right now in their lease, would it be enough money for them to pay the financing on a privately-funded brand new arena?

If the answer is yes, then I imagine someone would have done that by now, rather than continually to lose money, and waiting for the lottery licence.

If the answer is no, then it means that the team is not self sustaining, and that it requires some form of subsidization, over and above hockey revenues, to sustain itself.
 

Pens1566

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Let me put it this way.

If they had all the extra revenue that they're currently losing out in their current agreement, plus the money they are paying right now in their lease, would it be enough money for them to pay the financing on a privately-funded brand new arena?

If the answer is yes, then I imagine someone would have done that by now, rather than continually to lose money, and waiting for the lottery licence.

If the answer is no, then it means that the team is not self sustaining, and that it requires some form of subsidization, over and above hockey revenues, to sustain itself.
I'm going to say no. Which would make them like "most other markets in the nhl", right? So, because they can't fund their own arena, and don't have a billionaire owner, what? They don't deserve to be there and should be in QC?
 

discostu

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I'm going to say no. Which would make them like "most other markets in the nhl", right? So, because they can't fund their own arena, and don't have a billionaire owner, what? They don't deserve to be there and should be in QC?

I haven't even said anything close to that.

All I said is that they are not a self-sustaining market. That puts them at risk in situations like these, because their future hinges on the decision of whoever is funding them (in this case, taxpayers).
 

Wetcoaster

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I don't know where you got your information regarding Ottawa, but, the building was built from pretty much all private sector financing. Perhaps there was some government grant involved, but, I seriously doubt it. Much has been made of the fact that Ottawa had to build it's own interchange, which it then had to transfer back to the province at a price of $1. You also used Ottawa as an example of a team where non-hockey events contribute a great deal of revenue. Outside the odd concert, the arena is rarely used.
GM Place in Vancouver was completely privately financed - not a penny of government money. And Orca Bay pays the full freight on property taxes - no tax holidays or breaks.

There will be some government money available to convert the ice surface to Olympic size for the 2010 Olympics as I understand it. Construction is scheduled to begin April 2007 (later if the Canucks make the play-offs??) with completion slated for August 2008 with necessary interruptions for arena use.
 

Wetcoaster

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The only thing that Civic Progress (then owners of the St. Louis Blues) got was the deed to the old Kiel Auditorium, and that was in exchange for a promise (still unfulfilled) to renovate the Kiel Opera House. The United Center in Chicago might have been built without government funds, but I can't say for sure on that one.

Otherwise, I think every new pro sports facility built in the last 10-15 years has been funded in part by local and state governments.
Not GM Place in Vancouver.
 

skullman80

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Nov 18, 2005
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I don't know where you got your information regarding Ottawa, but, the building was built from pretty much all private sector financing. Perhaps there was some government grant involved, but, I seriously doubt it. Much has been made of the fact that Ottawa had to build it's own interchange, which it then had to transfer back to the province at a price of $1. You also used Ottawa as an example of a team where non-hockey events contribute a great deal of revenue. Outside the odd concert, the arena is rarely used.

I think the point that Northern Dancer is trying to make is, that to be a truly solid NHL market, a team should be generating enough revenue from its hockey operations to sustain itself, and to pay for a full arena on its own. If that is the case, then there would be no shortage of investors in that market. If it can't, it means that you're relying on external funding sources (i.e. government subsidization, cost sharing with other sports franchises, an owner willing to lose money etc.).

In the end, Pittsburgh is struggling financially because it isn't strong enough hockey market on its own, and, the process of getting subsidized by the government in some way (i.e. slot licence) is taking a long time. This doesn't mean that the market isn't worthy of a franchise, because most markets in the NHL are being propped up in some way. In fact, that's part of the problem. Many of the most hockey viable markets can't keep up because the teams they are competing with for players are heavily subsidized, allowing them to yield larger payrolls. If every team had to pay for their own arenas and pay for their fair share of taxes, payrolls would likely be signficantly lower.

Not many markets in the US are going to generate enough revenue to fully build an arena by themselves.


Heck to take it a step further not many MLB or NFL markets would be able to that either. The Steelers here for example, who have one of the most loyal fanbases and rich histories in all of football had to get taxpayer money to build Heinz Field. Ditto with the Pirates and PNC Park.

You won't find many, note I didn't sany none, markets in any sport in any pro league, that means NHL, NFL, MLB, NBA etc.. that can fully fund the building of a new arena themselves. Period. That doesn't make it a bad market, it's just how it is.
 

discostu

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Not many markets in the US are going to generate enough revenue to fully build an arena by themselves.


Heck to take it a step further not many MLB or NFL markets would be able to that either. The Steelers here for example, who have one of the most loyal fanbases and rich histories in all of football had to get taxpayer money to build Heinz Field. Ditto with the Pirates and PNC Park.

You won't find many, note I didn't sany none, markets in any sport in any pro league, that means NHL, NFL, MLB, NBA etc.. that can fully fund the building of a new arena themselves. Period. That doesn't make it a bad market, it's just how it is.

Just because NFL franchises do get money, it doesn't mean that they need that money to be able to turn a profit. I'm pretty sure that if all public funding in the NFL stopped, all the teams would still be generating a profit. Just their television revenue alone is enough to secure that. (It also doesn't guarantee that a profitable team won't move to somewhere they can earn more profit).

Wetcoaster pointed out that Vancouver did it. In Canada in general, you find very little subsidization of pro-sports teams. It's more of an American thing (and consequently, something Canadian teams could launch an official protest under NAFTA if they chose, but, that's a whole other debate). I'm not up-to-date on what the status of each teams level of public subsidization is, but, I'm willing to be that the bigger markets would survive on their own if this subsidization was removed.

I'm not saying anything controversial here. I'm just pointing out that the some form of subsidization appears to be required for the Penguins to remain in Pittsburgh. While the market has its strengths, it isn't strong enough to stand on its own. Yes, other teams are in the same boat, but, their situations are resolved right now, and their subsidization is secured. Pittsburgh's isn't, until it does, no investor is likely willing to try and make a go of it without it.
 

Wetcoaster

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Another clueless poster, and being from Canada makes it even worse...

- Did you know Pittsburgh was the birthplace of professional hockey?

- Did you know Pittsburgh was the 2nd NHL team in the U.S.?

- Did you know Pittsburgh was in the international pro league when the NHL was an amateur league?

http://hfboards.com/showthread.php?t=198796
The NHL was never an amateur league. It was formed in 1917 after the demise of the NHA.

There were professional teams and leagues in Canada prior to the IPHL - they simply maintained the fiction of being amateurs so they could compete for the Stanley Cup. The Canadian Amateur Hockey League set up in 1898 was the one first of the professional leagues paying players but claiming to be "amateurs". In 1908 that fiction no longer became necessary when pros were officially allowed to challenge for the Stanley Cup.

Previously the Winnipeg Victorias were assembled as the best talent money could buy to challenge for the Cup and become the first champions from the west to win in 1896 defeating another highly paid team, the Montreal Victorias.

The Ottawa Silver Seven (officially the Senators) were the highest paid team of their time and won the Stanley Cup in 1903 defeating - the Montreal Victorias.

The IPHL was the first league to officially name itself as "professional" but that was in name only.
 

skullman80

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Just because NFL franchises do get money, it doesn't mean that they need that money to be able to turn a profit. I'm pretty sure that if all public funding in the NFL stopped, all the teams would still be generating a profit. Just their television revenue alone is enough to secure that. (It also doesn't guarantee that a profitable team won't move to somewhere they can earn more profit).

Wetcoaster pointed out that Vancouver did it. In Canada in general, you find very little subsidization of pro-sports teams. It's more of an American thing (and consequently, something Canadian teams could launch an official protest under NAFTA if they chose, but, that's a whole other debate). I'm not up-to-date on what the status of each teams level of public subsidization is, but, I'm willing to be that the bigger markets would survive on their own if this subsidization was removed.

I'm not saying anything controversial here. I'm just pointing out that the some form of subsidization appears to be required for the Penguins to remain in Pittsburgh. While the market has its strengths, it isn't strong enough to stand on its own. Yes, other teams are in the same boat, but, their situations are resolved right now, and their subsidization is secured. Pittsburgh's isn't, until it does, no investor is likely willing to try and make a go of it without it.

Some form of subsidization would be required in most NHL markets, espeically those in the US if a new arena is funded. Obviously they are exceptions. I just don't see how this is something new, it's happened lots of other places, and in many other sports when new arenas are being built.

As far as the other sports being subsidized, my point was this. You say that all NFL teams would be turning a profit if public funding was taken away. That may be true, but I guess what I was trying to say is this, even if a team could build an arena completley on it's own profits and revenue's if state/local money is there I can gurantee is most cases the team would use that to help defray some of the costs of building a new stadium/arena rather than paying for the whole thing themselves.
 

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