KATZ LETTER AN OPPORTUNITY

I’ll be interested in seeing the reaction to the Daryl Katz letter published in the dailies this morning. The opportunity is there (I believe) to make a deal and a new approach from the Katz group is likely the best substitution available.

I don’t see a lot of wiggle room from the city, but there are ways to make this happen. The deal the Katz group is already getting from the city is exceptional, bordering on unfair. The casino included out means there’s a shortfall and some innovations are needed in the negotiation.

Sometimes the hammer doesn’t work, suspect this is such a time. For posterity, here’s the letter:

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57 Responses to "KATZ LETTER AN OPPORTUNITY"

  1. BlacqueJacque says:

    If he’s that sorry, he can go in front of a public session of council and explain why the Oilers suddenly need a $6m/year subsidy on top of having $100m spotted to them via loan and … really, all that jazz.

    When I read the letter, I was thinking “baby, I only hit you because I love you so much.”

  2. Lowetide says:

    BlacqueJacque: I believe there’s an opportunity created here by the apology, but it is up to Daryl Katz to come to the table and negotiate–especially considering the city has very little room left.

    jmo

  3. Lowetide says:

    As for the ‘baby, I only hit you because I love you so much’ that works as hyperbole but references to beating a female are in fact offensive in nature. Always.

    I’m sure you know that, but I want to put it out there before we get into unwelcome territory on this blog.

  4. BlacqueJacque says:

    Lowetide:
    BlacqueJacque: I believe there’s an opportunity created here by the apology, but it is up to Daryl Katz to come to the table and negotiate–especially considering the city has very little room left.

    jmo

    I agree. Sadly, the city needs him – there’s a distinct (and otherwise fortunate) shortage of billionaires in Edmonton, but he needs the city more.

    Katz’s turn to make some concessions, because the public stepped in behind council, Bettman shut Katz down, as did pretty much all media. He got a generous, good-faith deal from council and then apparently tried to extract more in the ugliest way possible. Now it’s his turn to make amends, and “sorry” doesn’t cut it with over a hundred million dollars on the line.

  5. Lowetide says:

    BJ: Agreed. The Katz group needs to find a way to cover off that $6M (I believe that was the total) annually. The city already gave everything away.

  6. BlacqueJacque says:

    Lowetide:
    As for the ‘baby, I only hit you because I love you so much’ that works as hyperbole butreferences tobeating a female is in fact offensive in nature. Always.

    I’m sure you know that, but I want to put it out there before we get into unwelcome territory on this blog.

    It was admittedly crass, but it’s a valid comparison.

  7. Lowetide says:

    BJ: Sure, and I agree that Oiler fans and Edmonton are the victims here. That’s why I felt–and had said in recent days–that the Katz threat was doubly outrageous. HE SHOULD KNOW BETTER!

  8. Mr DeBakey says:

    Whatever

    Problems re The Shortfall:
    They were $100 million short to start with.
    Katz’ $100 Million has turned out to be non-existent.
    They designed a building that can’t be built for the agreed to amount.
    The Casino money never existed, gambling is controlled by the province [Alison "Fat Tony" Redford].
    The CRL? Billions? Sure, why not? Trillions even.

    I could go on and on, and usually do.

  9. Lowetide says:

    Mr Debakey: The casino thing is interesting. I don’t have a lot of insight into it, but do know there was an ‘expectation’ that things were going to happen in that area. And not just from the Katz group.

  10. Bar_Qu says:

    It looks like Katz finally got some good PR advice (or that the hue & cry reached even the airy layers). I suspect we see this deal signed soon & a casino license purchased by KG in coming days. There is now no wiggle room for either side & public posturing likely ends with this letter.

    I Dinny know that this deal (in NHL terms) is that lopsided, so the thing will should get done-despite the bleatings of CnB.

    BJ, take a page from Katz & just apologize for an unfortunate choice of words. ’nuff said.

  11. Andropod says:

    Someone took him aside and explained to him what is in his best interests. As humiliating as that has to be, it had to be someone close. Someone that has pull with him and a person he respects.
    DK is still the same person, the god news is that there is a person in his inner circle whose head is screwed on that he respects.

  12. BlacqueJacque says:

    No. I chose my words carefully and stand by them.

  13. Lowetide says:

    Andropod:
    Someone took him aside and explained to him what is in his best interests. As humiliating as that has to be, it had to be someone close. Someone that has pull with him and a person he respects.
    DK is still the same person, the god news is that there is a person in his inner circle whose head is screwed on that he respects.

    I think the reaction from Gretzky, Bettman and the western world probably helped. He was alone on an island, the apology gets him back to do.

    I think the letter is sincere, based on what I’m reading online many others do not. I suspect this will give Katz a new day with council, but we’ll see.

  14. BlacqueJacque says:

    I personally don’t believe the letter is sincere. Well, it’s sincere in the sense that Katz is suddenly afraid for the current sweetheart arena deal, but no more.

    Over the past 5 years he’s increasingly struck me as a cynical man who’s all about business. The entire arena negotiations, the bait-and-switch with his initial large investment, then the smaller investment, and finally the fact that his investment is being covered by the city – it’s all very calculated. The fact that he (allegedly) misled Gretzky into giving his threat to move legitimacy is another calculated ploy. The only reason he’s sorry is because it all backfired and now he’s doing damage control like any smart man who’s gone far ahead in business does.

    The onus is on Katz to prove otherwise, IMHO.

  15. Lowetide says:

    BJ: Exactly. I think its sincere, but agree completely its what happens now that counts. Katz got an amazing deal, the city doesn’t have have another $6M annually in their backpocket. Time to get creative–creative meaning using your own resources.

  16. striatic says:

    i think the apology is sincere.

    i think Katz probably got a lot of heat from season ticket holders saying, rightfully, that they’ve held up their end of the bargain through the rebuild and to be repaid with such theatrical high school level high jinks was disgusting after three years supporting a last place team.

    i don’t think there’s a ‘cool head’ on the Katz team so much as the ticket holders letting him know how disgusted they were by this tactic shaking some sense into Katz.

    next step? i dunno. the plan has always been for the province to come to the rescue with money and that seems like it isn’t happening. so now they are supposed to come to the rescue with a casino gaming license which i think probably will.

    still leaves everyone short on the actual building costs unless they redesign the building, right?

  17. mc79hockey says:

    The letter contains an implied threat that the future of the Oilers is at risk.

    The comparison to a guy apologizing after hitting his wife is bang on. It’s got everything – the assurances of love, the explanation for why he was so mad…

    Typical that the Edmonton media think this is such a big deal. This is business, not romance.

  18. RexLibris says:

    I wrote this over at ON, so I’ll post it here as well, with regards to the letter and our (fans) response to it:

    -I’m old enough to know a public relations campaign when I see one. And certainly this sounds like the product of some committee consultation.

    Be that as it may, the fact that the letter was crafted and published at all speaks volumes about a group (Rexall Sports and the Katz Group) willing to eat a little crow.

    I think we are too quick to discount this type of letter as “merely a PR stunt”. Of course it is. It attempts to alter the public perception of a group because to a great degree that is their stock in trade.

    Just as we all behave a certain way in company or around those we like, admire, or wish to impress, so this too is in the same family of action.

    Our reputations are extremely important to all of us. While their interests are corporate and financial, we shouldn’t be entirely dismissive of the Katz group’s sentiments in this regard.

    I don’t blame Daryl Katz for being reclusive. Heck, I write under a pseudonym and am somewhat less publicly involved (and less wealthy) than he.

    He does need to engage the public more, and do it sincerely? Yes. But if we as a fan base are so willing to eviscerate Shawn Horcoff for perceived shortcomings I can only imagine what harsh words wait for an owner.

    If he pulls another stunt like this his reputation may never recover. I only hope that if one of his advisers suggested he go to Seattle, that that person is equally contrite.

    It was a really stupid move.-

  19. FastOil says:

    Lowetide:
    Time to get creative–creative meaning using your own resources.

    Exactly. I wonder if the margins in his new industry are part of the problem for Katz. Pharmaceutical selling I am sure is very lucrative and high margin. The NHL team seems to make a healthy return (as I understand Berkshire Hathaway wants an annual ROI around 10% and the Oilers are near that if they made 18M in profit and he paid 200M).

    It would be interesting to know what profitable similar situations look like to see if he has a legit concern here or is making a cash grab.

    The apology was a surprise to me, and I think very smart. He seems to have understood (on his own or not) that despite the deep love of the team the citizens can still be turned off.

  20. spoiler says:

    So Katz screws up and… writes a letter? How pathetic. If you screwed up at least man up and show up for your “apology”. Doesn’t hundred of millions of taxpayer money deserve at least an in-person reach-around? His cred has just dropped again.

  21. Dipstick says:

    Optimism abounds this morning. Yakupov can play. The league and PA are resolving (minor) issues. Katz apologizes and reaffirms his intent to keep Edmonton and the Oilers united. After the last crappy week, I appreciate it.

  22. spoiler says:

    Ferdinand is getting destroyed in this match.

  23. mc79hockey says:

    spoiler,

    Loved that run from Defoe though. I’ve started playing soccer and, while my ball skills are lacking, I do love the runs that pull the defence open for the guy with the ball. Smart from Defoe to pull the defender away.

  24. spoiler says:

    mc79hockey,

    Agreed MC, but that first goal never ever shoulda been.

  25. spoiler says:

    And as the analyst just mentioned, that was a bloody long run to not have a challenge.

  26. mc79hockey says:

    spoiler,

    To use a hockey analogy, Bale’s not a guy I’d want to let get wound up. Like Modano of the late 90s, picking up the puck in his own end and flying at the Oilers.

  27. spoiler says:

    He showed beautiful pace, but the issue is really Ferdinand who could not get down for a tackle on both runs despite starting with position. If he’s injured, then why is he in the starting 11? If he’s not, then the Devils are in trouble this season.

    United has been lucky that their older vets have managed as long as they have. And they’ve done well bringing in youth, but these transition years could be painful.

  28. spoiler says:

    Of course it’s nothing for them to go buy a top defender if Sir Alex decides he needs one.

  29. Jeremiah says:

    I wonder if in a couple of years when the Seatle Arena is complete and IF they still don’t have an NHL team, and IF OKC is still not attracting more mediocre crowds that The Kartz group finally confirms that their visit to Seatle back in 2012 was more about exploring the possibility of a minor league move than about the OIL.. Abbotsford would certainly appreciate it and it would be easier for transfer of players.

  30. JohnnyRocket says:

    I’m not sure if it was sincere or not. I’m a school teacher and I’ve heard a million insincere apologies. They always occur after the kid is caught AND the parents become involved. I suspect this is a similar story. If it came right after the offense, and without the negative press, I’d be more convinced. It doesn’t really matter, as long as the city doesn’t give up any more of our money.

  31. spoiler says:

    Like 80s hockey all of a sudden.

  32. Lowetide says:

    The way this game is going I expect 2 more Man U goals. Can Spurs bury another one?

  33. Ducey says:

    People need to start realizing they know about 40% of what is going on behind the scenes. You can’t attribute everything Katz has done to a lack of character or greed. A LOT of the problems have been caused by Katz’s underlings, mostly his lawyers. I know for fact that Katz has had good conversations with city counsellors only to have everything fucked up the next day by the lawyers. They may know what they are doing in franchising pharmacies but they are way over their head when it comes to handling the the complexity of the area deal, lobbying government, and public relations.

    Bob Black’s ego has been writing cheques his brain can’t cash. Katz should fire him immediately and surround himself with some people that do PR/ GR/ and arena deals for a living.

  34. mc79hockey says:

    @Ducey: You’re responsible for what your employees do on your behalf. If Katz doesn’t like what they’re up to, he should fire them.

  35. DSF says:

    Jeremiah:
    I wonder if in a couple of years when the Seatle Arena is complete and IF they still don’t have an NHL team, and IF OKC is still not attracting more mediocre crowds that The Kartz group finally confirms that theirvisit to Seatle back in 2012 was more about exploring the possibility of a minor league move than about the OIL..Abbotsford would certainly appreciate it and it would be easier for transfer of players.

    Chris Hansen has tremendous motivation to land an NHL team in Seattle since the amount of funding provided by the city and county is reduced by $80 million if he doesn’t.

    There’s been some speculation that, once the lockout is over, Bettman will announce 2 expansion franchises as a means of capturing some additional revenues for the owners.

    I would think Seattle would be near the top of the list if they haven’t procured a team by other means.

  36. spoiler says:

    Wow. Fine win by Spurs. Were hangin on for dear life through most of the second half, but withstood the onslaught. Any day United loses is a good day. It’s like the Yankees missing the playoffs.

  37. Lowetide says:

    They did everything but score. Bale seems to have jet skates on those sorties.

  38. spoiler says:

    Ducey:
    People need to start realizing they know about 40% of what is going on behind the scenes.You can’t attribute everything Katz has done to a lack of character or greed.A LOT of the problems have been caused by Katz’s underlings, mostly his lawyers.I know for fact that Katz has had good conversations with city counsellors only to have everything fucked up the next day by the lawyers. They may know what they are doing in franchising pharmacies but they are way over their head when it comes to handling the the complexity of the area deal, lobbying government, and public relations.

    Bob Black’s ego has been writing cheques his brain can’t cash.Katz should fire him immediately and surround himself with some people that do PR/ GR/ and arena deals for a living.

    The 40% we do know is absolute shit:

    We have an owner prone to threatening his team’s fans.

    We have an alleged capitalist trying to gorge himself at the public trough.

    We have an “adult” who after treating his team’s fans like shit, resulting in a week of blowback, decides maybe its best to apologize and apologize by writing us all a letter. His excuse? He’s too shy to apologize in person. Try that with your Dad, Girl, Boss.

    That “carefully considered” letter explains that Katz is “angry” that confidential details of his raping of the public were leaked to that very same public. Why not slap us in the face too? I love it when someone coerces money from me and my neighbours in a condescending fashion.

    And that letter yet again implies a threat.

    That’s a great 40%.

    The arena situation is now officially a complete shambles.

  39. Ducey says:

    mc79hockey:
    @Ducey:You’re responsible for what your employees do on your behalf.If Katz doesn’t like what they’re up to, he should fire them.

    Sure, but my point is that poor advice/ incompetence of his counsel doesn’t mean Katz is greedy scum. It often gets portrayed that way.

  40. Andropod says:

    Lowetide: I think the reaction from Gretzky, Bettman and the western world probably helped. He was alone on an island, the apology gets him back to do.

    I think the letter is sincere, based on what I’m reading online many others do not. I suspect this will give Katz a new day with council, but we’ll see.

    I totally agree that the blowback played a major role, but the humility of the letter indicates wise counsel, at least in that regard. Nonetheless while apologizing, he still stuck in the inherent threat so I dont think anyone can breathe easy until everything is signed sealed and DELIVERED. When did leopards change spots? and DK has plenty of leopards – and spots.
    Having said that I wonder to what degree the bone of contention is perhaps the threat the Coliseum represents going forwards to the profitability of the new arena – a similar sized, much cheaper venue a few stations up the road? Does the extra cash asked for, represent the drop in revenues that DK expects under present the present Coliseum arrangement?
    Interesting times.

  41. spoiler says:

    Andropod: I totally agree that the blowback played a major role, but the humility of the letter indicates wise counsel, at least in that regard. Nonetheless while apologizing, he still stuck in the inherent threat so I dont think anyone can breathe easy until everything is signed sealed and DELIVERED. When did leopards change spots? and DK has plenty of leopards – and spots.
    Having said that I wonder to what degree the bone of contention is perhaps the threat the Coliseum represents going forwards to the profitability of the new arena – a similar sized, much cheaper venue a few stations up the road? Does the extra cash asked for, represent the drop in revenues that DK expects under present the present Coliseum arrangement?
    Interesting times.

    Explain to me where the humility was in this letter. Where is the humility in chooosing to write an.apology? Where is the humility at being upset that his request for more public money was leaked to that same public? Where is the humility in continuing to do what he is allegedly apologizing for, ie threaten the fans? Where is the humility in continuing to assert the public should gift him an arena by right of owning a team?

    Give me a break. There wasn’t an ounce of humility in this letter.

  42. DSF says:

    Andropod: I totally agree that the blowback played a major role, but the humility of the letter indicates wise counsel, at least in that regard. Nonetheless while apologizing, he still stuck in the inherent threat so I dont think anyone can breathe easy until everything is signed sealed and DELIVERED. When did leopards change spots? and DK has plenty of leopards – and spots.
    Having said that I wonder to what degree the bone of contention is perhaps the threat the Coliseum represents going forwards to the profitability of the new arena – a similar sized, much cheaper venue a few stations up the road? Does the extra cash asked for, represent the drop in revenues that DK expects under present the present Coliseum arrangement?
    Interesting times.

    The city agreed to spend $2M/year for 10 years in advertising to compensate for Katz not getting the non-compete clause with Northlands.

    According to Katz, and somewhat confirmed by Mandel, the issue of maintenance on the arena was always an issue, one that it was hoped would be covered by casino revenue that has not been forthcoming.

    You would think Katz and the city could have come up with a solution that didn’t involve all the theatrics on BOTH sides.

    I really think Katz’ trip to Seattle was an attempt to get everyone’s attention.

    Mission accomplished.

  43. El Duderino says:

    My experience over many years whether it’s a $10,000 deal or a $5oo,ooo,000 deal is that the “business” guys always want to make a deal and they play nicey nice to each other and then give it to the lawyers to “sort out” the minor details, which never seem to be minor nor details. It’s always convenient to blame the lawyers. Lawyers advise and take instructions from the client. If they don’t, that’s when they should get fired.

  44. vishcosity says:

    So on the day that people in Spain are prohibited from recording the riots, Katz offers a letter. I thought the irony of Mr. Rexall buying the team on the day the Mitchell report was released was scintillating enough, now we get this.

    Spain’s three most obvious choices: welch on the (fictitious) debt; suffer deep cuts to public spending; or spend away ala the US model. The Spanish media spins it to be people reacting against the ‘Ron Paul’ model of slash and burn, but that is probably not why the recordings are being controlled.

    So today Katz inc prints some letter and inevitably the media tripe says “love your mortgage”, just like the media spins in Spain. What do the people really say? I’ve read: the city should scrap the deal (ditch the banks); we don’t want deep cuts to pay for it (smaller building); or we may as well borrow all we can and make the most lavish building possible, provided DK throws down a sincere promise to pay.

    I hope today people realize the advice we got from our grand parents (save your money, buy it for cash) is completely different than anything pro palace. If my grand ma was running city council she wouldn’t even begin to consider borrowing $400 million.

    Maybe this whole thing, with Katz et al voting unanimously to lock out the players, then Katz et al going to Seattle, then Katz et al offering black ink on white paper to soften the blow, well, it all sounds exactly like what got Spain in the position its in and has soured me from pro hockey pretty badly.

    I asked what was wrong with Northlands and the only thing I’ve heard is that the concourse plugs up and the hallways (between the box suites) are too narrow. And we the people are really somehow suggesting to borrow $400 million more from bankers? And now after Daryl offers up a letter apologizing for threatening us via signed black ink, suddenly we should be okay to agree to do exactly what got Spain to the point they’re in?

    If before today I wasn’t opposed to offering a promise to pay for something Edmonton people obviously do not need, after that letter I most certainly am against the whole deal now.

  45. Rebilled says:

    It’s great not having hockey and having to hear about this arena almost every day.

    I was thinking ‘how can I get kicked and punched in the balls at the same time?’

    Quite the handball by Demba Ba today. Brutal.

  46. BlacqueJacque says:

    Ducey: Sure, but my point is that poor advice/ incompetence of his counsel doesn’t mean Katz is greedy scum.It often gets portrayed that way.

    You cannot possibly pin this on Katz’s staff.

    1. Katz flew to Seattle himself.
    2. Katz met with Gretzky in Seattle to create the impression of Gretzky’s implicit support for a move.
    3. This is a situation with over $100M at stake. Very likely the biggest deal on Katz’s table at the moment. Do you honestly think he’s going to pawn it off on staff?

    Stop apologizing.

    I used this example on ON and I will use it here:

    In the Soviet Union during Stalin’s times, people whose families had been arrested, shipped off to gulags, or executed, would write to Stalin asking for help. Why? Because it was easier to blame the advisors and imagine that Stalin’s just a good guy with bad people around him. Why would they imagine this? Because it was better than to think that the country was run by a mass-murdering psychopath.

    Obviously Katz isn’t a mass murdering psychopath, but this whole “blame the staff” thing is exactly like people blaming Stalin’s advisors, or the czar’s court, or the king’s council, or whatever leadership proxies are convenient.

  47. hags9k says:

    Quick! Back to the table Gary and Donald, this is getting serious, my favourite hockey blog is talking soccer.

  48. Kris11 says:

    I agree with Tyler that it’s not much of an apology.

    And they’re still claiming they could move. But they walked back the threat a bit, which is tanatamount to folding some of their demands, which is what we need to see now.

    I think Katz realizes this is a sweet deal, and if he starts to not make as much as he wants, he can make threats later, again.

  49. Dahoosman says:

    The issues for me are these:

    1) The Katz group has failed miserably in articulating what benefits (if any) will result from their integrated downtown area and entertainment complex will occur to the average tax payer. This could be because it’s not clear there will be any, or that they can’t be sure what they are, but what is the benefit of the area district for the guy who already doesn’t go to games and watches them at home? He won’t benefit from an increase in bars and resturants downtown, or will he? If he will, how? Make that guy buy in.

    2) The Seattle thing was played out. It’s been done more times than a prisioner’s dilemma on a bad CBS proceedural. Mario did it of all people to get his arena built, but it’s happened so often AND the economics of it so absurd that no one was buying it. It also didn’t help that Atlanta moved to Winnipeg recently and the first words out of the Commish’s mouth were, “We don’t like to move our franchises”.

    3) I also find it funny that Quebec has built an arena and the issue Katz and the Oilers are having is about long term O&M costs. Quebec is a province that does not believe in O&M for public infrastructure as evidenced by their collapsing bridges and roads. But neither does the City of Edmonton, as until recently thier public pools, libraries and older neigbourhoods fell into massive disrepair.

  50. DSF says:

    Dahoosman:
    The issues for me are these:

    1)The Katz group has failed miserably in articulating what benefits (if any) will result from their integrated downtown area and entertainment complex will occur to the average tax payer.This could be because it’s not clear there will be any, or that they can’t be sure what they are, but what is the benefit of the area district for the guy who already doesn’t go to games and watches them at home?He won’t benefit from an increase in bars and resturants downtown, or will he?If he will, how?Make that guy buy in.

    2)The Seattle thing was played out.It’s been done more times than a prisioner’s dilemma on a bad CBS proceedural.Mario did it of all people to get his arena built, but it’s happened so often AND the economics of it so absurd that no one was buying it.It also didn’t help that Atlanta moved to Winnipeg recently and the first words out of the Commish’s mouth were, “We don’t like to move our franchises”.

    3)I also find it funny that Quebec has built an arena and the issue Katz and the Oilers are having is about long term O&M costs.Quebec is a province that does not believe in O&M for public infrastructure as evidenced by their collapsing bridges and roads.But neither does the City of Edmonton, as until recently thier public pools, libraries and older neigbourhoods fell into massive disrepair.

    Bread and circuses or potholes and snow removal.

    There is a median.

    1) You need to check out what the professional planners and accountants employed by the City of Edmonton have to say about the benefits of the CRL. They have amended their estimated revenue raised by the CRL to $1.4 billion.

    Only $45 million of that new revenue would be directed toward the arena. It is the City’s job, not Katz’s to “articulate what benefits will results from an integrated downtown area and entertainment complex. They have done so and the documents are readily available. I

    It should be noted that the brown lands proposed as a site for the new arena district contribute less than $200k annually in property tax revenue to city coffers.)

    2) Who cares? Katz would be an idiot not to explore other options if the phlegmatic burghers of Edmonton decide they would rather fix potholes than be an NHL city.

    3) What’s going on in Quebec is irrelevant to the current discussion. However, if you would prefer city funds, which will all be repaid under the current framework, are directed toward infrastructure repair, I assume you would be fine with Edmonton not having NHL hockey. While that is certainly a valid choice for anyone, it makes me wonder why you would come on to an Oiler blog to vent your spleen.

  51. bookje says:

    Wow, Stalin, spousal abuse, and Spanish Riots.

    Some of you people need to take your medicine.

  52. Reg Dunlop says:

    bookje,

    Medicine that, presumably, can once again be purchased at Rexall/Guardian/Medicine Shoppe. Is the apology enough to lift the boycott? Maybe on a provisional basis.

    As far as the remaining 100 mil shortfall and the yearly maintenance funding question, I have the answer. Open up a drive through or stagger through Rexall in Abbotsfield, offer Oxycodone at $10.00 per pill and jack the price up when welfare cheques come out. Saturdays can be half price syringe day. In a couple of months, shortfall… gone.

  53. DSF says:

    Reg Dunlop:
    bookje,

    Medicine that, presumably, can once again be purchased at Rexall/Guardian/Medicine Shoppe. Is the apology enough to lift the boycott? Maybe on a provisional basis.

    As far as the remaining 100 mil shortfall and the yearly maintenance funding question, I have the answer. Open up a drive through or stagger through Rexall in Abbotsfield, offer Oxycodone at $10.00 per pill and jack the price up when welfare cheques come out. Saturdays can be half price syringe day. In a couple of months, shortfall… gone.

    Oiler fans boycotting Rexall is just hilarious.

    I’d guess Rexall derives something like 2 percent of their revenues from the Edmonton region and 2/3 of those customers could give a flying donut about the Oilers.

    If you want to send a message, don’t buy tickets, don’t watch on TV and don’t buy merchandise.

    Everything else is just grand standing.

  54. Reg Dunlop says:

    DSF,

    I wonder what percentage of Molson beer sales Edmonton was responsible for in 1979? That boycott seemed to have some effect as I recall.

  55. spoiler says:

    bookje: Wow, Stalin, spousal abuse, and Spanish Riots. Some of you people need to take your medicine.

    Great argument, Bookie… yup just deride the metaphors of others. This tactic looks far worse on you than the tactic of metaphor used above to suss out the insincere boondoggle that is this letter. At least these people brought some level of analysis and insight. After all that is what metaphors are for. You on the other hand brought nothing but rhetoric followed up by an ad hominem insult.

  56. spoiler says:

    It seems to me there is a lack of understanding about some very basic and well-known economic concepts among the general public. Economics isn’t taught in school and there are reasons why governments do not include econ in their curricula (as always, ask Cui bono?”)

    And these fundamental economic concepts are rarely mentioned with respect to the arena debate. They need to be made far more prominent if taxpayers are to make an informed decision about the arena issue.

    Here they are:

    1. Public spending by definition provides zero stimulus. Public spending is funds coerced from private sources and is thus merely a diversion of private spending and saving. Public spending is in fact a drag on the economy due to the amount of resources wasted on its assessment, collection, management and disbursement. Private spending needs no such level of administration.

    2. Public spendiing provides incentives for cronyism and corruption. Now a small group of people is picking winners and losers in the economy rather than the free market Not only are they likely to do a poorer job than the free market even if they attempt to be objective in their choices, they will be tempted to abuse this power as history has proven time and again on both small and larger scales.

    3. One of the fundamental ideas behind free enterprise is the notion of a level playing field. Getting a Half a Billion Dollar Project for free is impossible for other market participants to compete against. They become uncompetitive much faster than they normally would have as a result, destroying the capital they have invested into facilities with an expected lifetime. This destroys livelihoods and ravages other areas of the economy unnecessarily. It devitalizes the economy as a whole as an expense for revitalizing the pockets of a few.

    The corollary is true too. The Katz Group are given such a lead that there is no incentive for them to act in as competitive way as possible, allowing inefficiency, incompetence and waste. They are the Hare dilly-dallying in his race against the Tortoise.

    Besides, why should someone be allowed to collect all the profits in an enterprise without participating in most of the risk? Why should a large group of people participate in the risk of a project without collecting any of the reward for taking that risk? To allow such not only distorts the economy, it is immoral and encourages further immorality. It enslaves.

    4. The increased tax burden (ticket tax, higher parking prices, the municipal commitment to spending $20M per year, the diversion of Rexall funding that will have to be made up, the covering of inevitable cost overruns, the other $100M in missing funding, and the backing of the Revitalization levy) is a drag on the rest of the economy and a disincentive to work and produce. It discourages businesses from expanding or improving business. Thus this burden not only transfers the weath of the entire community to the pockets of the recipient, it reduces the ability of the economy to grow and thus service that increased tax burden. It actually devitalizes, disincentives and discourages..

    The point that there might be higher property taxes from increased development in the surrounding area does not remove the tax consequences cited above. That burden still occurs, as does the one of the CRL. All the CRL means is that part of the cost could be covered in full, and if not, the taxpayers are back on the hook.

    5. A comprehensive 2008 meta-study by the Universities of Maryland and Alberta on the economic impact of professional sports and their facilities found that:

    “No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer-reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measureable economic impact on the economy.”

    This should be a fairly easy concept to understand. If people didn’t spend their money on sports teams or increased taxes they would spend it on other thiings. This is an extension of the point in 1.–that taxes by definition divert income, not create it.

    6. Public financing removes discipline from the planning and production of the project. When private financiers are involved, and at the amounts we are discussing for this arena, the very best at their business would be required, honest assessments of the viability of projects are made by these experts. These people are lending their own money and are going to make damn sure there’s little chance of not getting that money back without a return on investment. There is a much greater possibility that if private money can be persuaded to invest, that the project will be a going concern and be able to succeed within the community’s economy rather than be a burden to the community

    Because serious risks are being taken, discipline is enforced onto the project. That discipline premeates every level: planning is made in good faith between the devlopers and the money men (ie a stunt like Katz pulled last week by adding new terms just would not happen), scale is planned appropriate to the level of financing the project can support, construction bids are set up such that cost risk is shared or putback on the producers who want the work, the lower labour costs of private devlopment can be taken advantage of, etc etc.

    Not to mention… we don’t have government competing with and stealing business from those in the business of financing such projects and the thousands of people they employ in an ongoing industry.

    7. Setting the precedent of private need subverting public money is dangerous. It is akin to blackmail, and like blackmail once it starts it never stops. First Pocklingon wants a ticket tax to cover rent. Then the EIG wants free rent and keep the ticket tax. Now the next owner wants to be gifted a new arena. What do we do about his next demands?, because there never isn’t a need for more money (or upgrades).

    Forcing private need to find its solutions privately, on the other hand does the exact opposite. They aren’t just renters any more. As owner of the facility with their own skin in the game and under the watchful eye of their creditors, it will be far more difficult to turn their back on the commitment required for such a long-term capital expenditure. They are far more tied to the commmunity. And their profit is far more tied to their actual management performance and productivity.

    These economic concepts are so important and basic and relevant to the arena debate, yet get zero play in the public discussion of this proposal. I can find no arguments that can overcome these fundamental problems, yet these issues are ignored. Certainly “this is what they do elsewhere” isn’t a justification to do harm; it never is.

    Everyone wins when a project is devloped privately Only the few win when it is developed publicly.

    The economy and its wealth grows when projects are developed privately . The economy is burdened and harmed when projects are developed publicly.

    We are allowing ourselves to be blackmailed into doing harm.

  57. vishcosity says:

    Spoiler –

    Love it. My buddy keeps trying to find a measure of the taxes paid due to the Oilers vs. taxes written off. He suggests that the Oilers are responsible for basically zero new taxes paid because a significant number of the ticket prices paid are written off as expenses instead.

    I read your #5 out loud, and the first response was that the economic climate of the area around RX1 hasn’t really had a large boom over the last 30 years. In fact, it was much better in the 70′s than it is now, iirc. Qualcomm in San Diego is still a hole in the earth, Glendale actually has had negative growth because of the arena. (A municipal tax was levvied, now all new cars and dishwashers are bought on the Phoenix side of the county line).

    The idea of government stimulating a business district makes me think of the Soviet cold war five year land plans. For five years some guy was allowed to farm the state land, then in 5 years, the deal was up. People worked the ground for every seed it could yield, then at the end of the term the land was exhausted. When people win lotteries generally they just piss the money away.

    If I got 400 million free dollars to build an arena, I would very likely use the first 20 million to buy beer for my friends. If I were to liquidate assets to put my 400M on the table, my friends would be buying me beer while I lived on pbj.

    If the people of Edmonton are not going to riot at the idea of spending that much future money on a cathedral while half the world is under government mandated austerity measures due to cited overspending, if Edmonton cannot learn from the mistakes of 3 billion people, then I guess the people deserve the future death pledge and can collectively act surprised when the final numbers are tabbed.

    Katz owns most of the land around the proposed site, I’ve heard. If there is going to be $2B annual in expenditures in that area, he would be far better off to build the barn himself and collect all that revenue on what would be a relatively small loan. Surely the city counsellors are working in the interest of the people and would make a concession to him for that, right? He gets to keep all the rent from these thousands of new restaurants and features, he keeps all the ticket revenue, and while these Oiler kids win playoff round after playoff round, he is laughing easy for sure. Based on the projections that Kim Krushell(?) quoted, sounds like it can’t miss.

    Further, it would seem that building the barn under a private enterprise, the one Spoiler shows, it would be managed with a new found fiscal responsibility, surely that would be even better than the numbers the council itself presented that are based on public funding right?

    If there is such a great future guaranteed for the arena district, I can’t figure out why Katz would want the city involved with anything other than a rubber stamp. He should be working on a tax deal straight from the Magna Carta, and the city should be considering that. NHL in Edmonton just can’t miss, right?

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