Edmonton, Katz Group agree to $450M arena deal (UPD - still $100m funding gap)

Discussion in 'Fugu's Business of Hockey Forum' started by Thrillingbroom, May 18, 2011.

  1. Thrillingbroom

    Thrillingbroom Registered User

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    Last edited by moderator : May 19, 2011
  2. Motown Beatdown

    Motown Beatdown Need a slump buster

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  3. SK13

    SK13 T. Yoshi Muchakoopas

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    Council voted 8-5. Passed the funding framework for the Arena.
     
  4. jumptheshark

    jumptheshark Rebooting myself Sponsor

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    there is a 100mill gap that needs to get filled
     
  5. Metzen

    Metzen Registered User

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    I think this is a good deal for the city of Edmonton. A ticket tax of a % (5% has been bandied about) will increase revenue as ticket prices increase (as opposed to a fix $). The Oiler's were at ~$25/ticket 15 years ago and are now at ~$85 per ticket. @ 5% ticket tax the city revenue will have increased from $1.25/ticket to $4.25/ticket. If the new arena is ~18,000 and sells out at roughly the same price the city will collect $3.13M per season from the Oilers (not counting other events). If the status quo maintains (Oiler's generate ~63% of arena revenue) I think you could anticipate the city collecting an additional $1.83M to collect $4.96M.

    This is all assuming the ticket tax works the same as the existing 7% tax that the Oiler's and Northland's collect. That is, tickets under $7 == no tax, tickets over $28 == 5% tax. If the city generates tax on the low cost tickets then they'll generate more revenue then what I've stated.

    Over 20 years including inflation and if rising ticket prices maintain quo (340% over 15 years) the city by the end of their term will generate and maybe even surpass their $125M target... It seems the city is being quite conservative in their estimates. Maybe the Oiler's don't increase their ticket prices as aggressively as they have over the last decade and a half, maybe the ticket tax only counts against Oiler tickets and not all events at the arena. But if it were to encompass all events then the (potentially) worst the city could do is ~$99.2M if ticket prices maintained throughout the next two decades.

    Anyways, this post is all purely speculation. No details have been released outside of what the city has proposed which haven't been finalized to any degree.
     
  6. molsonmuscle360

    molsonmuscle360 Registered User

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    I'm glad we are finally getting a new rink but I think 18,500 is still a little small. I think they should have went to at least 19,500 or 20,000.
     
  7. Buck Aki Berg

    Buck Aki Berg Done with this place

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    It drops the value when your capacity goes too high, especially in leaner times when ticket sales start to sag (the Oilers won't sell out in perpetuity). That's the problem the Senators have right now - it's expected that there will be seats available on game day on any given night (Leafs and Habs games excluded), and the fact that there's no sense of scarcity makes the tickets less valuable.
     
  8. BB79

    BB79 Registered User

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    Congrats Edmonton on the new arena deal, so glad this didn't drag out to the last minute, complete with all the b.s. relocation rumors that would have came along with it. It would be a travesty if the Oilers moved. Hopefully the Islanders will get their piece straightened out too.
     
  9. NyQuil

    NyQuil Neon NyQuil

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    Speaking as an Ottawa native, you can't beat a downtown location. :(
     
  10. Hank Chinaski

    Hank Chinaski Registered User

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    AB Gov't not prepared to commit $100 million toward new arena

    As per TSN:

    http://tsn.ca/nhl/story/?id=366237

    I'm not too familiar with Alberta politics, but this seems like posturing to me. If push comes to shove (ie. Oilers being threatened with a relo), they'll pony up the cash.
     
  11. molsonmuscle360

    molsonmuscle360 Registered User

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    They needed to do something with downtown Edmonton. I look like your pretty average business man even when I travel, and the last time I took a bus to Edmonton I had to wear my suit for a meeting and I still had someone offer to sell me heroin outside the Greyhound station. It's freaking gross down there.
     
  12. Buck Aki Berg

    Buck Aki Berg Done with this place

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    Alberta's debt? Didn't they give everybody $400 "prosperity cheques" not long ago? Things change fast....
     
  13. Metzen

    Metzen Registered User

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    And that greyhound station is the area that the revitalization projects are happening in. :)
     
  14. Melrose Munch

    Melrose Munch Registered User

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    That's what happens when you don't save.Well. Not to mention their defecit.
     
  15. Jamin

    Jamin Registered User

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    No thats what happens when your province funds the rest of the country. Just quit sending out 16 billion in transfer payments. The debt is gone and becomes a surplus and you can lower taxes even more and still be in the surplus.
     
  16. Melrose Munch

    Melrose Munch Registered User

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    I mean deficit.
     
  17. Melrose Munch

    Melrose Munch Registered User

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    So did Ontario. We have the same problems here. In fact we receive transfer payments out now.
     
  18. LadyStanley

    LadyStanley RIP Fugu

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    Edmonton, Katz Group agree to $450M arena deal

    http://slam.canoe.ca/Slam/Hockey/NHL/Edmonton/2011/05/19/18164326.html?cid=rsssportsslam! hockey

     
  19. Fugu

    Fugu Guest

    Yay, some new news. :p:


    I HATE threads from months ago that hijack breaking news.
     
  20. Fourier

    Fourier Registered User

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    Alberta has no debt. THey do have a realtively small deficit. But they also have projected a surplus budget by 2012-2013. At that time they will still have no debt.

    In contrast Ontario has a provincial debt of $236 billion. Alberta's fiscal situation is not an issue. If they don't want to contribute it will be for philosophical reasons.

    Munch I am curious why your position on the Oilers is so "dooms day"? Of course anything could happen, but they are so far down the list of teams in trouble that it is surpising to me that a Leaf fan would be at all worried about their situation.
     
    Last edited: May 19, 2011
  21. cyril*

    cyril* Guest

    Honestly, you shouldn't talk about things you don't understand and this is quite possibly one of the more ridiculous things I have read on these forums.

    Alberta is the only debt free province in the country (compared to hundreds of billions of dollars of debt for Ontario and Quebec each).

    Alberta is running a deficit this year because they are increasing spending on infrastructure while it is cheap.

    Alberta still has a surplus which will grow as natural gas prices increase.

    Like Fourier mentioned, if the government passes on funding the Oilers arena (and eventually a new arena in Calgary) it will be for philosophical reasons, not because they can't afford it.
     
  22. Melrose Munch

    Melrose Munch Registered User

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    I just have a bad feeling the owners wont go out of their way like they did for Phoenix and Nashville. Thats all.
     
  23. cyril*

    cyril* Guest

    What owners? Katz?

    What the hell are you talking about? :laugh:
     
  24. Melrose Munch

    Melrose Munch Registered User

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    The BOG. You might of heard of them. They pay Bettman his salary.
     
  25. Fourier

    Fourier Registered User

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    Out of their way to do what though? The progress on the arena is there. Katz is a very deep pocketed owner who is committed to the city. The Oilers are a core part of the City's culture. Right now there is nothing pointing towards anything the BOG needs to worry about.

    Could that change in the future. Of course. But this should be so far down the list of present concerns for the BoG as to be a complete non-issue.
     

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