YOU CAN’T ALWAYS GET WHAT YOU WANT

Every morning between 6:30 and 7:30 I sit down at the Smith-Corona (why doesn’t someone come out with a laptop with that name? I’d buy two!) and write something for this blog. It’s therapeutic, sort of sets  things right in my brain.

Uusally there’s one or two things in my mind at the same time, but since yesterday morning there are about one dozen of them. I don’t think any are terribly original but if that were the criteria you’d see fewer posts here weekly.

  1. Gary Bettman and the NHL owners are filthy, just filthy. They work the players into a lather, insult them with their first offer, wait until the players miss a cheque snd then make an offer that gives traction but has an enormous deadline placed on it. You can respect it as a negotiating ploy, and maybe this is the only way, but I’d guess the reason that the NFL players hug their commissioner and Chris Chelios goes off every lockout is ploys like this one. I do believe there’s an opportunity for a deal, but am miles from being an expert. We wait.
  2. I’m surprised people are surprised that Daryl Katz isn’t going to sit in front of council and explain himself to them. That’s not his style. A back room meeting, far from the crowds and with Gary Bettman lurking with a hammer appears to be the better bet. It’s a sticky wicket for the Mayor, I don’t think he has a lot of wiggle room. I also believe the public at large has very little patience left for Katz. I suspect Edmonton’s empire builder will have to either compromise or choose another  town for his team. Eventually, those will be the options.
  3. In a post below, we got into a discussion about the wisdom of taking Nail Yakupov. Seriously? Is there anyone who truly believes that was a bad pick? I can buy into it being too early to make the final call, but  the Oilers made the right decision at the time. Sometimes we as fans confuse things as time rolls along, and I think it is important to remember Yakupov was the clear #1.
  4. The injuries to the blue are a concern, but that’s why the Oilers have so many of them bubbling under. The injuries to Gernat, Klefbom and Marincin will have an impact–we don’t know about long term but development time is being lost for Gernat as a teenager–but the club still has Musil, Simpson, Davidson, Bigos and others on the job. Plus this Schultz fellow.

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56 Responses to "YOU CAN’T ALWAYS GET WHAT YOU WANT"

  1. nelson88 says:

    Bump from the last post.

    Hard to analyze the NHL offer without seeing all the details but on the face of it I am shocked Bettman got the ok to make that proposal. Limited ability to bury high paid mistakes in the minors, forced to eat the entirety of the “Hossa/Luongo” details and a cap ceiling that shrinks by about $10M next year. The ability to keep a small amount of salary in a trade will help somewhat but WOW that proposal will mean real short term pain for the clubs/owners that reportedly have significant sway like Boston, Philly, Chicago etc. Should put some meaningful discipline around their spending moving forward though.

    Just like 2004 it will be fascinating to see the deals that get done in the next 10 months and how it reshapes the league. Let’s hope the Oilers are as adept at handling it as last time ( I for one have to give KLowe his due there).

  2. jonrmcleod says:

    That person who questioned the wisdom of selecting Yakupov isn’t an Oilers fan.

  3. FrankenOil says:

    I find the 4 year window to sign European prospects idea fascinating. Gives teams another avenue to have a longer draft and follow window similar to American College-bound prospects. I am guessing this is a Detroit idea.

  4. FastOil says:

    “Gary Bettman and the NHL owners are filthy”

    I imagine there is a lot of ego at stake here for Bettman, with the notorious big bad Fehr representing the players. It wouldn’t surprise me if how harsh they have been in part is because of this. Still filthy though.

  5. rickithebear says:

    For me the NHL was about watching the best players play a sport. With the advancement of technology we still can. Just not in the same league.

  6. Cactus says:

    The NHL has put their full proposal online:

    http://www.nhl.com/ice/news.htm?id=643570&navid=DL|NHL|home

    And here’s their explanation/justification:

    http://www.nhl.com/ice/news.htm?id=643572

    For the record, I don’t see this as an especially terrible tactic. If anything, it should be an effective means of focusing the efforts of both sides rather than providing either with some hope that waiting things out will bolster their position. If the NHL really wanted to put the screws to the players, they could have just tabled an offer with a “take it or leave it” proviso and then wait until missed paycheques caused them to cave.

    Oh and one more thing LT: NFL players certainly aren’t happy with their commissioner right now either. This Bounty scandal has kicked up a lot of bad blood and the players are still smarting from the last CBA resolution.

  7. Gret99zky says:

    “I suspect Edmonton’s empire builder will have to either compromise or choose another town for his team.”

    I suspect Edmonton’s billionaire opportunist will have to either compromise or find a buyer for his team. I doubt Bettman and the BOG allows the Oilers to move.

  8. BlacqueJacque says:

    Why shouldn’t edmontonians be surprised at Katz’s refusal to attend council or send a representative? He keeps telling us he wants a fair deal, so what’s the reason to hide behind closed doors?

  9. Captain Obvious says:

    The “deal” the owners offered looks a lot worse yesterday than it did today.

    And releasing it won’t necessarily help. Here’s what Friedman just tweeted regarding the public release of the offer. “The pissoff is that there was real potential for movement, but this could fuck with it … Ooooooooops:) You know what, though? That’s how I feel. I thought there were possibilities yesterday and this doesn’t help anyone. ”

    This sets up the players to give the NHL a well deserved fuck you. The owners have two options. They can play hardball and turn the screws. This gives them the best deal but has the disadvantage of putting the players backs against the wall, risking everything. Or they can play nice cop, make a slightly less bad offer, and make a deal. They are still playing hardball and that jeopardizes everything.

    Also the deal doesn’t address the problems with the salary floor so this is just a bandaid. Bad deal all around.

  10. Captain Obvious says:

    Oh, and Katz can go fuck himself.

  11. Cactus says:

    Captain Obvious,

    Bob McKenzie had a good theory on why the NHL publicized their proposal. Aside from PR, it seems that some of the NHLPA reps were tweeting inaccurate details about the proposal and they wanted to make sure that all players (now scattered across the world) had the actual text. This seems plausible to me, but even if it’s just a PR move, it shouldn’t change negotiations if Fehr knows what he’s doing.

    Ultimately, the players aren’t going to like any NHL proposal because it’s going to involve a pay cut, either now or in the near future. Whatever “side” you’re on in this dispute, the reality is that the owners have the ability to impose this and the best the players can do is to mitigate it. Hopefully the negotiations proceed swiftly with this underlying logic.

  12. Captain Obvious says:

    Cactus,

    It’s called collective bargaining because neither side can impose an agreement upon the other. If you enter negotiations with the mindset that you have to accept something then you are going to get a worse deal. This is the paradox of negotiations. It is in your interest to be willing to walk away from a deal that is better than the alternatives.

    Everyone talks about how the players have more to lose than the owners. I’m not sure that is true. The NHL is a profitable industry with $3 billion + in revenues and positive projected growth. However, the conditions that have led to this can change. They could generate more revenue or they could generate less revenue and pushing the players to the brink in order to reduce their production costs carries the risk of endangering revenue growth. It is not obvious to me that this is a good risk for the owners.

  13. spoiler says:

    Somebody still wants their free arena and is upset he’s not getting what he wants……


    “The city has approached this negotiation based on narrow political considerations rather than a general desire to strike a deal that is fair and makes economic sense for both sides,” wrote Katz.

    So we’re back to rhetoric apparently. Also this from TSN:

    Under the original deal, city taxpayers and ticket buyers would pay to build the arena, which was initially pegged at $450 million. But with land, borrowing and surrounding infrastructure factored in the price is now at $700 million and rising.

    $700 Million!

    This ain’t Kansas anymore.

  14. Jordan says:

    WRT Katz/Oilers/Arena

    To be really honest, I’d love to see council decide to build the arena on their own, and threaten to let Northlands run the place. Or better yet, run it themselves, and pocket the money to put towards other big-budget projects.

    1 – The Oilers aren’t going anywhere, and if they do… we’ll have another team here in short order. The NHL likes money, and we got buckets to throw at hockey. So, while I want to see this team win some cups here… I want council to be damn sure they get a good deal for edmontonians first.

    2 – Katz has succeeded in not only shooting himself in both feet and melting his face in a pool of acid (PR-wise), but has also managed to make his staunchest supporters politically look like boobs. He’s got a lot of ground to make up. It would be a lot easier to do if he understood how to negotiate.

    3 – Really interested to hear where things stand at council today. If you want to hear it from the horse’s mouth, check out the stream.

  15. Cactus says:

    Captain Obvious,

    I’m aware that a CBA requires the participation of both sides. In this case, however, the cost-benefit structure is disproportionate and this serves to give the owners the advantage. Consider:

    -NHL players have their entire livelihoods invested in hockey whereas owners usually draw most of their revenue from other businesses (that’s how they got the money to purchase teams in the first place). For instance, even if Katz makes $20M in profit per year, this pales in comparison to Rexall revenues.

    -According to the Forbes reports, approximately 2/3s of the teams are either losing money or effectively breaking even (+/- $3M). This means a strong majority of the league actually save money by not playing – or at least don’t lose it. Toronto and Montreal may really want to drop the puck, but they can’t overrule the masses of less-wealthy teams without guaranteeing significant revenue sharing (something they’re not about to do).

    -NHL players have short careers and thus fighting for the long-time gains of the union is actually a net loss for current players. If you’re an autoworker, you may be a union member for 35 years – you need to play the long game. An NHL player is lucky to get 10 years.

    -Finally, NHL players lack competing employers to go shop their services to. For many of the people on this board, if our boss came and asked us to take a paycut, one recourse would be to shop our skills to his/her competitor. The best NHL players can do is go to the KHL, but this isn’t really a long-term substitute. There’s some question of whether the pay is really as good (almost certainly not for sub-superstar players). It’s also far from home, in a foreign country, with poor safety records.

    So when I say the players have to accept a paycut, it’s not because the owners can actually impose the CBA in a legal sense. What they can do, however, is impose their will economically. It might take a long time, it might ruin the NHL, but at the end of the day, the players are at a disadvantage here. This current proposal is a great starting point and they should try to get as much as they can within it. If they try to dig in their heels though, they’ll lose – it’s just the reality of it all.

  16. Clarkenstein says:

    I almost feel that the “lockout” and the “arena” debate is more dramtic than watching the shittiest team in the league year after year. Almost.

  17. Maestro Fresh Mess says:

    I suspect Edmonton’s empire builder will have to either compromise or choose TO SELL his team. Eventually, those will be the options.

  18. Truth says:

    If Katz wasn’t a billionaire this deal would already be done. People can’t see past the idea of someone with may more money than them making more money. No further thought is given. If average Joe owned the team, who has his entire life into the team, the building would be standing already.

    Maybe Katz’s research is correct. Maybe operating costs are more than initially expected.

    What needs to happen is full transparency, let us all see the exact framework of the deal. Let’s see what the expected revenue is. Let’s see what the expected operating costs are. Both from the city and from Katz. Either Katz will look like a fool or city council will. It is my opinion that the only reason this has gone so far (threatening to move the team, publicly declining meetings, etc) is because the city is not living up to the original framework. No matter how this shakes out it is a good deal for the City of Edmonton on future tax revenue alone. Not to mention the increased tourism and finally some upgrading to our wretched downtown.

  19. Lowetide says:

    Maestro Fresh Mess:
    I suspect Edmonton’s empire builder will have to either compromise or choose TO SELL his team. Eventually, those will be the options.

    I don’t think so. Suspect the NHL will back Katz with the arena of “current NHL calibre” being the gap. We’ll see. If you does SELL his team, will there be a buyer? Honestly, that has been tried before and there just aren’t that many people with the cash.

  20. godot10 says:

    Truth:
    If Katz wasn’t a billionaire this deal would already be done.People can’t see past the idea of someone with may more money than them making more money.No further thought is given.If average Joe owned the team, who has his entire life into the team,the building would be standing already.

    Maybe Katz’s research is correct.Maybe operating costs are more than initially expected.

    What needs to happen is full transparency, let us all see the exact framework of the deal.Let’s see what the expected revenue is.Let’s see what the expected operating costs are.Both from the city and from Katz. Either Katz will look like a fool or city council will.It is my opinion that the only reason this has gone so far (threatening to move the team, publicly declining meetings, etc) is because the city is not living up to the original framework.No matter how this shakes out it is a good deal for the City of Edmonton on future tax revenue alone.Not to mention the increased tourism and finally some upgrading to our wretched downtown.

    There is no need to make a deal with Katz now since he is asking for a free arena and a net subsidy….he is asking for an operating subsidy larger than his mortgage/rent payment. i.e. He’s taken his $100 million completely off the table.

    I supported the New York City deal as win-win.

    Now, it makes more sense for the city to just build the arena on its own. It will give the city better leverage in negotiating the deal with Katz or with whatever NHL owner wants to play in one of the better hockey markets in North America.

    Time to call Katz’s bluff. Katz will come running back to the table if the city moves to build the arena on tis own, because Katz will lose all his leverage, and will end up with a worse deal than he negotiated in New York City.

  21. spoiler says:

    Lowetide: I don’t think so. Suspect the NHL will back Katz with the arena of “current NHL calibre” being the gap. We’ll see. If you does SELL his team, will there be a buyer? Honestly, that has been tried before and there just aren’t that many people with the cash.

    The Flames are watching these proceedings closely. If public money isn’t coughed up for the Oilers, it won’t be for the Flames. They are praying the Oilers can get a precedent set.

    So if this deal falls through, by the extension of the logic above, Bettman will have Alberta lose two teams. He can’t possibly be that stupid. Imagine the fallout for a Commish who has had the league financially supporting a team in Arizona this entire time. He risks alienating half a nation.

    And finally, with the awful state of municipal finances in the US, the “publicly-funded arena model”is no longer politically feasible. All the recent examples contradict Bettman’s model. Taxpayers have woken up to the stupidity of guaranteeing profits for billionaires while socializing their losses.

    And now the owner is insulting the very people he is begging money from… What a twisted world.

  22. Gret99zky says:

    Lowetide: I don’t think so. Suspect the NHL will back Katz with the arena of “current NHL calibre” being the gap. We’ll see. If you does SELL his team, will there be a buyer? Honestly, that has been tried before and there just aren’t that many people with the cash.

    Who owns the Phoenix team? I think the NHL would buy the asset, at least in the short term, rathan than move it. Isn’t that why there is still a team in the desert?

  23. Truth says:

    The NHLPA would be smart to have a legitimate counter offer on the table by the end of the week or this is going to look horrible on them. It’s funny reading all of the players tweets regarding the NHL offer came way too late. To date they are already 1 day later than the NHL to make a second proposal.

    Also, please make them all public from now on.

  24. godot10 says:

    godot10,

    And this is from someone who has always supported the new arena. I still do. Except the city should go it alone, or at least credibly threaten to.

  25. godot10 says:

    IMHO,

    The NHL offer basically sucks. I was on the owner’s side 100% last time in fighting for the cap. The players are far more in the right this time so far.

    The NHL has to take the salary rollback off the table. The salary rollback is still there, cleverly disguised.

    As long as the salary rollback is there, I can’t see the NHLPA and Fehr agreeing to the deal.

  26. Wolfie says:

    Organized Labour is losing ground at an alarming rate to big Corporations. Globalization and Free Trade are killing unions. The NHL is still the top league. They could still pay more than any other employer. Sure the KHL could attract some high end talent but the overall level will for the foreseeable future be higher in the NHL. If the NHL were to use scabs the union would break before too long. Careers are short and guys who are on the bubble would be foolish to pass up a chance at being back in the NHL making more than anywhere else. Eventually the big stars would also capitulate. You can’t tell me guys playing in the KHL and Europe at a fraction of their NHL salaries wouldn’t come back if the NHL unilaterally imposed their own employment rules.

    I’m a pro union guy. I don’t like that the NHL is looking to claw back on contracts they negotiated in good faith. But unions are a thing of the past. Our own federal government has been selling unions down the river offering employees little protection from tyrannical corporations looking after their “shareholders” interests. Aveos(Air Canada), Caterpillar, many federal union jobs, Via Rail. The list is only going to get longer as unions go the way of the dodo.

  27. spoiler says:

    godot10: IMHO,The NHL offer basically sucks. I was on the owner’s side 100% last time in fighting for the cap. The players are far more in the right this time so far.The NHL has to take the salary rollback off the table. The salary rollback is still there, cleverly disguised.As long as the salary rollback is there, I can’t see the NHLPA and Fehr agreeing to the deal.

    I believe this is a fehr assessment. The PA has repeatedly stated they are unwilling to rollback salaries while league revenues are expanding. And this is why there will be no hockey this year.

    And I don’t think either side has any concept of the negative effect a declining salary cap will have on team management. It will create a future cap crisis and we will be back at the table before the CBA ends.

    It will also make it impossible for teams to ever sign a major player for longer than the concurrent CBA.

  28. bendelson says:

    spoiler,

    The privatization of profit and the socialization of loss…

    Indeed.

  29. Truth says:

    godot10,

    I’m all for the city building the arena alone. As long as they don’t half-ass it (we’ve all seen some public projects). Unfortunately, I think that the Katz group would ensure a better finished product and better service than Northlands would/currently does in Rexall.

    I don’t care what happens as long as:

    1) The downtown gets a much needed facelift beginning with a downtown entertainment district (including arena).

    2) The current Edmonton Oilers play in that arena for years to come.

    3) The Oilers win a Stanley Cup in 2015.

    Okay maybe #3 can be +/- 1 year

  30. art vandelay says:

    If Katz wasn’t a billionaire this deal would already be done. People can’t see past the idea of someone with may more money than them making more money.

    The “you’re just jealous” canard? You’ve got the economic sophistication of a 12-year-old. Or a union hack like Wolfie. Or an Occutard like Bendelson, who’s still trotting out talking points from the TARP era.

  31. godot10 says:

    Truth:
    godot10,

    I’m all for the city building the arena alone.As long as they don’t half-ass it (we’ve all seen some public projects).Unfortunately, I think that the Katz group would ensure a better finished product and better service than Northlands would/currently does in Rexall.

    I don’t care what happens as long as:

    1) The downtown gets a much needed facelift beginning with a downtown entertainment district (including arena).

    2) The current Edmonton Oilers play in that arena for years to come.

    3) The Oilers win a Stanley Cup in 2015.

    Okay maybe #3 can be +/- 1 year

    Katz will lose a lot if he doesn’t take the New York deal. The city might sell the naming rights and seat licenses to help pay for the building. It might let Northlands be the operator. A lot of bad things can happen from Katz’s perspective if he doesn’t do the deal as a partner, and is left being just a renter.

  32. Captain Obvious says:

    “The more I think about it, the more I wonder if Katz’ recent actions are ploys to get City to build it alone, then force a sweetheart lease ”

    A retweet that just came across my twitter. Building an arena is a bad idea. It gives the Oilers more leverage not less.

    The only way to ensure that the Oilers stay in Edmonton long-term is if they invest heavily in the arena. Building an arena without a tenant decreases the leverage the city has in all future negotiations.

  33. Kris11 says:

    You can’t always get what you want

    But if you lockout sometimes

    You’ll find

    You get the HRR that you need.

  34. hunter1909 says:

    Imo the NHL has made a fair and wonderful offer to those asshole players.

    Shawn Horcoff bashing is much more fun. I see Horcoff managing a Mr. Muffler franchise, sans hockey, and seriously amuse myself wondering what a guy with that level of intelligence is going to do sitting on too much money after his NHL days are over.

    Re the entire tone of this post, plus comments: Such caring. Such concern. My opinion is driving the NHL to make an offer, not you fanatics. My opinion says: I don’t care much for the rotten hockey I saw in the playoffs last year, and don’t want to ever see it again…also…lock out the NHL for as long as you like – 3 to 5 years is just fine by me, especially as I’m just about to enter the prime money making years of my life. The years when the cost of buying an NHL season ticket or four won’t bother me – because there are all kinds of other ways to spend that dough.

    Not that I’m seriously thinking about getting season tickets. Thanks but, no thanks. Bettman + DeadmanWaking get it.

  35. godot10 says:

    The biggest problem with the NHL proposal is that the salary rollback (the “make whole” position) is paid out of the players share of revenue and NOT out of the owner’s share., which is why it is still a salary rollback.

    At a minimum, the NHL is going to have to pay for the “make whole” provision out of its share of the 50%. If that is done, I think a deal is possible. If not, I think we lose the season.

    I think the players can win the PR war if they can explain this point. i.e. We’re willing to do 50-50 on HRR, but the owners have to pay for the “make whole” provision out of their share of the revenues.

  36. Kert says:

    @ Art, do you find any comedy in a post that contains name-calling as well as accusing a person of being 12 years old in some aspects? I do, I think it’s adorable.

  37. hunter1909 says:

    godot10,

    With respect, and I do mean this: Can you please try to explain exactly how anyone is supposed to give a flying fuck about the uber-entitled millionaire NHL players?

    Or are you a mole for the NHLPA, who’s been cleverly planted on the advice of Shawn Horcoff, who wisely suggested this take place, in order to stir dissent on OIler blogs?

  38. godot10 says:

    Captain Obvious:
    “The more I think about it, the more I wonder if Katz’ recent actions are ploys to get City to build it alone, then force a sweetheart lease ”

    A retweet that just came across my twitter.Building an arena is a bad idea.It gives the Oilers more leverage not less.

    The only way to ensure that the Oilers stay in Edmonton long-term is if they invest heavily in the arena.Building an arena without a tenant decreases the leverage the city has in all future negotiations.

    Winnipeg. An inferior market. Built a building and got a team. Ditto for Quebec City, unless the sovereignists screw it up by making Quebec a black hole.

    An arena in one of the top third of hockey markets is not going to be left empty.

    Katz loses leverage if he lets the city build it alone. Call his bluff. New York deal or “we” build it without you, and then you have to come to us on “our” terms.

  39. Kris11 says:

    LT,

    Katz is entering a multimillion dollar deal with the city that he will benefit from and he refuses to show his books or even answer questions, or even have his representatives answer questions.

    That is surprising, LT. IMO.

    It isn’t hard to send your reps to the damned meeting and have them sell the proposal. They can avoid the hard questions and spin the facts/ That’s what these guys do, even in harsh environments. I’m surprised they decided not to even bother with the formality of pleasantly and artfully avoiding the council’s questions.

    Jeebus H. Gretzky, I find that odd and really dumb. Dumber than the Seattle ploy. At least Seattle was a threat. (An empty one, of course.) But not answering tax payers questions doesn’t make people afraid of losing the Oilers. It just pisses them off. People love the Oilers, but they hate (I mean hate) loss of control over their tax dollars. Nothing is hated more in society than rich guys getting backroom deals and pretending to be aristocrats.

    Don’t get me wrong, I suspect Katz will get his deal and all will be forgotten eventually, but he is doing the one thing that could spoil public support by actively telling the taxpayers he doesn’t care that this is their money.

  40. godot10 says:

    hunter1909:
    godot10,

    With respect, and I do mean this: Can you please try to explain exactly how anyone is supposed to give a flying fuck about the uber-entitled millionaire NHL players?

    Or are you a mole for the NHLPA, who’s been cleverly planted on the advice of Shawn Horcoff, who wisely suggested this take place, in order to stir dissent on OIler blogs?

    I was 100% for the owners last time. The hard cap was unambiguously good for hockey.

    The owners signed these contracts with players. They should be paid in full out fo the owners share of revenue. 50-50 and the owners make whole on the existing contracts out of their share.

  41. Captain Obvious says:

    godot10,

    I don’t doubt Edmonton can have a team if they pay them to stay. The point is that Edmonton shouldn’t be paying teams to play here. Building an arena and then letting them play in the arena rent free or, worse, subsidizing them to play there aren’t good options.

    That said, I agree with you 100% on the owners “offer.” It’s a shell game filled with lies designed to create public pressure. It’s a bad deal made worse by the dissembling over financial figures. If I’m a player it makes me less likely to make a deal.

    To Hunter, I’m 100% with the players and not a plant. Moreover, in my experience whose side you are on in this correlates directly with intelligence. This bodes well for the owners in the public relations battle.

  42. Ducey says:

    Captain Obvious,

    Anyone that is 100% with anyone in this (or almost any) dispute, isn’t as smart as he thinks he is.

  43. Truth says:

    art vandelay:
    If Katz wasn’t a billionaire this deal would already be done. People can’t see past the idea of someone with may more money than them making more money.

    The “you’re just jealous” canard? You’ve got the economic sophistication of a 12-year-old. Or a union hack like Wolfie. Or an Occutard like Bendelson, who’s still trotting out talking points from the TARP era.

    Ha. I am simply stating my experience in the reasoning of the majority of non-supporters of this arena deal . Go ask the first 200 people you see what they think of the deal. If they don’t like it please tell me their reasoning. These same people are voting council members into office.

    Without being privy to the details of the current situationl or the framework which was originally agreed upon I don’t know how anyone can make the assumption that Katz is trying to milk the taxpayer for every last penny. How do we know it’s not the opposite?

    As far as the economic sophistication of a 12 yr old; with the given information please enlighten us as to why Katz is getting such a good deal and the city is getting ripped off. What is Katz’s profit margin 20 yrs from now?

  44. Maestro Fresh Mess says:

    godot10: Winnipeg. An inferior market. Built a building and got a team. Ditto for Quebec City, unless the sovereignists screw it up by making Quebec a black hole.
    An arena in one of the top third of hockey markets is not going to be left empty.
    Katz loses leverage if he lets the city build it alone. Call his bluff. New York deal or “we” build it without you, and then you have to come to us on “our” terms.

    I think the city should take it one step further and also offer to purchase the team. This is all being financed from the city’s credit line anyways. The team makes enough money to service the debt until a new owner who accepts an airtight lease/location agreement can be found.

  45. spoiler says:

    Truth: What is Katz’s profit margin 20 yrs from now?

    Good point. We should probably start building him some Rexall stores too.

  46. Captain Obvious says:

    Maestro Fresh Mess,

    The city owning the team would make sense for the city in comparison to the alternatives. Unfortunately, I don’t believe the NHL allows public ownership of franchises.

    But it shows how crazy the economics of arenas has become. The arena costs 2.5x the value of the franchise. That’s why the Oilers don’t want to build the arena themselves. However, the cost of the arena is such that the Oilers are the only ones who stand to benefit from the arena. Conclusion, the cost of arenas is too high for the revenue they generate, unless they are subsidized by non-economic rationale.

  47. Truth says:

    spoiler: Good point. We should probably start building him some Rexall stores too.

    Deal, as long as Katz builds some overpasses on the Yellowhead.

  48. Maestro Fresh Mess says:

    Captain Obvious,

    Interesting. Through Northlands?

  49. spoiler says:

    Truth: Deal, as long as Katz builds some overpasses on the Yellowhead.

    Judging from his level of financial commitment to the arena deal, I’m thinking this is a no-go.

  50. sliderule says:

    I was talking to a friend about what Katz is up to on the arena with all these new demands.My friend who has built up and sold several large businesses over his lifetime immediately said that he has cold feet and wants out.
    We agreed the main problem is the building is too damn expensive.Making a world class statement by swooping lines and zinc coating has run the cost up by at least 100 million.The jobbing.com arena in Glendale was built at a cost of 280million in 2012 dollars.It is considered to have one of the best interior designs in the NHL but the exterior is plain.Katz or Mandel wanted a world class building without a clue as to what that would do to the costs.
    Katz at this point doesn’t think there is enough other revenue to make it work financially .
    As the city has already put in almost 100 million for the land and design he figures the city may forge ahead on it’s own and then he can cut a real sweetheart of a deal after it’s built.
    That’s our take on this fiasco.

  51. Truth says:

    Arena Negotiations ceased by city council.

    Goodbye Edmonton Oilers, I’ll be cheering for you wherever you land. Hopefully not Quebec because that will be real hard.

    sliderule,

    I don’t ever pretend to be “connected”, but I have heard similar things from extremely credible people. Unfortunately the rumoured sweetheart deal does not involve Edmonton.

    Say what you want about them not leaving, but if Katz and Bettman are as good of buddies as rumoured this can easily be framed as the city and the team not cooperating to get a new arena in place. Rexall has already been deemed unsuitable for an NHL team for any considerable time after the lease with the Oilers expires.

    I was an advocate of the city pulling through and making this deal work so that the Oilers will stay in Edmonton. Katz owns the team and should be able to do whatever he wishes with it. The NHL will return to Edmonton, but only when they get their priorities straight and build a new arena. City council is already trying to alter the design by removing the winter garden (which makes absolutely no sense since they just ceased all negotiations). The eventual replacement arena will be a joke, you can count on that. Missed opportunity to revitalize our city.

    Sad day in the former City of Champions.

  52. BlacqueJacque says:

    sliderule:
    I was talking to a friend about what Katz is up to on the arena with all these new demands.My friend who has built up and sold several large businesses over his lifetime immediately said that he has cold feet and wants out.
    We agreed the main problem is the building is too damn expensive.Making a world class statement by swooping lines and zinc coating has run the cost up by at least 100 million.The jobbing.com arena in Glendale was built at a cost of 280million in 2012 dollars.It is considered to have one of the best interior designs in the NHL but the exterior is plain.Katz or Mandel wanted a world class building without a clue as to what that would do to the costs.
    Katz at this point doesn’t think there is enough other revenue to make it work financially .
    As the city has already put in almost 100 million for the land and design he figures the city may forge ahead on it’s own and then he can cut a real sweetheart of a deal after it’s built.
    That’s our take on this fiasco.

    You know, that seems plausible.

  53. BlacqueJacque says:

    Except it doesn’t explain why Katz threatened to move to Seattle.

  54. bendelson says:

    art vandelay,

    Step off Vandelay!

    Occutard – What a word.

    “Spoiled brats that blame hard-working, successful people for magically causing the failures of their own lives. Occutards have been coddled by their parents from birth and given everything they want without being expected to work for it. Now grown, they expect the government to arrive in place of their parents and provide everything their hearts desire for free. Furthermore, they believe that camping out in front of a random bank/government office will accomplish this goal. Can be heard regurgitating Marxist slogans, demonizing “the rich”, whining about the inequities of life and condemning “evil corporations” for destroying their “fair chance”. Occutard camps allow them to return to their natural state of not bathing, defecating/fornicating in public and participating in drum circles. Their ultimate goal is to create the occutard utopia in which the nanny-state plunders money from the productive members of society and “redistributes” it to them, removing any necessity to ever work”.

    And there you have it. Defecating in public? Geez. Fecal Art?

  55. hunter1909 says:

    bendelson,

    Don’t get out much?

  56. mattwatt says:

    Truth: Ha. I am simply stating my experience in the reasoning of the majority of non-supporters of this arena deal . Go ask the first 200 people you see what they think of the deal. If they don’t like it please tell me their reasoning. These same people are voting council members into office. Without being privy to the details of the current situationl or the framework which was originally agreed upon I don’t know how anyone can make the assumption that Katz is trying to milk the taxpayer for every last penny. How do we know it’s not the opposite?As far as the economic sophistication of a 12 yr old; with the given information please enlighten us as to why Katz is getting such a good deal and the city is getting ripped off. What is Katz’s profit margin 20 yrs from now?

    That is the issus isn’t it? Expected profit margins 20 years from now.

    Which is a fool’s mans game, unless you can sweeten the deal to offset your risk. Katz knows this, and is trying to do what he can to leverage against this the best way possible. Projecting revenue 20 years into the future is not difficult; just takes time and knowledge of the financial framework related to the deal. After imputing all this, you can change the financial indicators as you see fit; ex: what are earnings with decrease in revenue over years 13-23? Katz would pay his financial team a nice sum to figure this stuff out. He knows the reasonability of earnings, and the probability of changes occurring. That is why he is asking for the subsidy. Likely went “this our expected earnings when we can offset costs by $6 million? Well that is nice.”

    City getting ripped off a bit is the fact that they receive no economic benefit from fronting the majority of the costs. Katz current payback timeline of 198 million over 35 years, is akin to taking out a $100 million in principal right now and paying back the principal and interest over that time period at 4%. Pretty much a loan locked in at close to current prime rate when interest rates have been at historical lows. A decent deal. He assumes operating costs of arena, but people like him find the most efficient/effective ways to run these things. Don’t think that he will have to sell the farm just to keep an arena running. All but a guarantee that arena operating cost will be kept low as possible to get as much as the non-hockey related revenue from the arena as possible (for 48 weeks/year). All the while the city receives no economic benefit, and is the party assuming majority of the initial principal. I know some would state the CRL would offset the cities costs, but that is from all development within the region, not Katz alone. Could the city come out ahead? Possibly. But they are the ones taking all the risk with lesser economic reward than Katz. Not the most balanced of financial models.

    Katz has a ROI (return on investment) and wants at all costs to meet it. That is fine, that is his choice. Also don’t think he has to open his books to the public. However, he can allude to difficulties facing him without tipping his hand. That is the issue here. Katz has done nothing to discuss the proposal and what is wrong with it, for we don’t even know how his demands are reasonable or not.

    And don’t get me even started on expecting to have the city as the anchor tenant of his office building. Dirty pool at its finest.

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