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

Metzen

Registered User
Sep 9, 2005
471
0
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.
 

Buck Aki Berg

Done with this place
Sep 17, 2008
17,325
8
Ottawa, ON
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.

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.
 

BB79

Registered User
Apr 30, 2011
2,641
2,647
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.
 

Hank Chinaski

Registered User
May 29, 2007
20,804
3,015
YFO
AB Gov't not prepared to commit $100 million toward new arena

As per TSN:

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

EDMONTON -- A spokesman for Alberta Premier Ed Stelmach says they'll look at the specifics of any request to pony up $100 million for a new arena for the NHL's Edmonton Oilers, but says they won't subsidize privately owned enterprises.

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.
 

molsonmuscle360

Registered User
Jan 25, 2009
6,587
12
Ft. McMurray Ab
Speaking as an Ottawa native, you can't beat a downtown location. :(

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.
 

Metzen

Registered User
Sep 9, 2005
471
0
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.

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

Jamin

Registered User
Aug 25, 2009
4,924
778
That's what happens when you don't save.Well. Not to mention their defecit.

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.
 

Melrose Munch

Registered User
Mar 18, 2007
23,545
2,006
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.
So did Ontario. We have the same problems here. In fact we receive transfer payments out now.
 

LadyStanley

Registered User
Sep 22, 2004
105,727
18,855
Sin City
Edmonton, Katz Group agree to $450M arena deal

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

Under the framework, announced Wednesday night at a hastily called press conference at city hall, the city said it will own the $450-million arena and the land, while the Katz Group, which owns the Oilers, will operate the building and be responsible for all maintenance, upgrades, operating and capital expense costs.

The city will contribute $125 million, the Katz Group will chip in $100 million and another $125 million will come from a user-paid facility fee.

The remaining funds, according to city officials, will come from other levels of government — although the province and feds have previously indicated that they won’t be contributing.
 

Fugu

Guest
Yay, some new news. :p:


I HATE threads from months ago that hijack breaking news.
 

Fourier

Registered User
Dec 29, 2006
25,437
19,569
Waterloo Ontario
That's what happens when you don't save.Well. Not to mention their defecit.
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:

cyril*

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

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.
 

Melrose Munch

Registered User
Mar 18, 2007
23,545
2,006
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.
I just have a bad feeling the owners wont go out of their way like they did for Phoenix and Nashville. Thats all.
 

Fourier

Registered User
Dec 29, 2006
25,437
19,569
Waterloo Ontario
I just have a bad feeling the owners wont go out of their way like they did for Phoenix and Nashville. Thats all.

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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