RX2: THE ARENA DEAL TAKES A POSITIVE STEP

Jason Gregor
July 22 2010 12:37AM

At 1:30 yesterday afternoon, Mayor Stephen Mandel addressed the near capacity audience at a hearing on the proposed Downtown Arena, depicted above in a crudely drawn 2008 mockup from an article outling the equally crude plans by OilersNation own Wanye.

Mandel tried to lighten the mood to start the afternoon's proceedings announcing “for those who haven’t been here before there is no clapping, no cheering or screaming. This will be a very interesting afternoon. Let’s go.”

I’m sure he didn’t expect it to last over four hours, but the Downtown Arena is a hot topic and there were lots of questions. John Karvellas, executive vice-president and general counsel for the Katz group did most of the talking and answered the majority of the questions, but Daryl Katz did address the Mayor and councilors right away.

“I know we haven’t always made it easy and I’ll be the first to apologize for that,” stated Katz in his opening statement. Katz surprised me with how passionate he was when he spoke. I sensed he truly is proud to be an Edmontonian, but he also has a goal to make this arena and surrounding entertainment district world class.

He mentioned that he was approached by the city in April of 2008, before he officially owned the Oilers, about a downtown arena and he has been focused on that ever since. He then committed to putting $100 million towards the rink and another $100 million towards the entertainment district.

I thought Katz was well-spoken and passionate and I bet if he addressed the fans once or twice a year that would help his cause. He doesn’t like the spotlight, and I respect that, but he owns a team that in his words, “Is a major part of the identity of Edmonton ,” so he needs to needs to realize that the fans want to feel like they know the man who runs this “Identity”.

He also mentioned the Oilers would sign a location agreement, meaning the likelihood of them leaving the city is minimal.

However, later in the proceedings Karvelles stated the Oilers and Oil Kings would not play in a refurbished Rexall Place . Their lease ends in the fall of 2014. Ted Tanner, executive director of real estate development of AEG opened up with a promotional video of AEG voice by Morgan Freeman.

It was meant to excite you and make you feel that AEG can build an arena, and the surrounding area, so exquisite that the entire world would want to come see it. The Staples Centre in LA and O2 in London were their prime examples in the AEG portfolio.

No doubt these are world class facilities, and if Edmonton ends up with something similar we’d be pretty ecstatic. The references to hosting the Grammys and being part of great movie production were off-base for this hearing, and I thought the video didn’t add much to the overall conversation.

The other contentious topic brought up by the Katz Group was how the Oilers currently don’t receive any non-hockey revenue at Rexall Place . They are the only NHL team with this agreement and noted this is a major reason why they have lost millions the past few seasons.

Reports suggest they lost four million last year, and then an additional three million went to the NHL subsidy program.

QUESTIONS AND ANSWERS

After the Katz Group was done their presentation each councilor had five minutes to ask questions. Jane Batty went first followed by Don Iveson. Batty showed her hockey knowledge and gave Katz the Lady Byng award for his generous commitment of $4 million (they included his original purchase of the team).

Her questions asked for more clarification on certain points, but Iveson came out swinging. He asked why this couldn’t be privately funded like the previous four arenas that were built in Canada . Bob Black, executive vice-president of sports and entertainment for the Katz Group informed him that only Toronto made that model work, while in Montreal , Vancouver and Ottawa the original investor suffered massive losses. “So you are asking the city to take on most of the risk,” replied Iveson.

I think it is imperative in this process that the city asks the tough questions. I’m in favour of a new facility, and I believe we will get one, but the city needs must do their due diligence and investigate every turn.

A FAIR DEAL. IS THERE SUCH A THING?

My one concern is the thought process that we need a deal that is fair. What constitutes a fair deal?

I am always interested in the notion of “fairness”. Do you think 100 people could ever agree on what is “fair?” Or would fair have everything to do with your point of view?

Many who oppose the arena, and even some who support it, keep stating there has to be a fair deal. “If Katz puts up 25% of the arena cost, then he should only get 25% of the revenue,” is a statement I’ve heard on my show numerous times the past few months.

In a very general and simplistic fashion that could be considered fair, but I don’t think it is that simple. What is the true value of the Oilers to Edmonton? Can we put an accurate value on how much having an NHL team helps the economy? I’ve yet to see an exact report, but if you ask people in Winnipeg they say it is significant.

Some think it isn’t fair if Katz makes too much money off of this deal, but what is too much.

The fact is Katz owns the Oilers. He paid $200 million for them and he has the right to make as much money as he can.

That is how it works in our capitalist society.

Some of you will say that is fair, while others will claim it isn’t. And what is this automatic assumption that business is unfair, always takes unfair advantage of people, and if you have made a lot of money you must be a crook. What’s up with that? This thought process really stumps me.

I honestly believe if Katz addressed the fans they would naturally trust him more, and after listening to him today I think he would come across just fine once or twice a year. I don’t think he has to be front and centre all the time, and it isn’t in his personality to do so, but if he had done so in the past I guarantee some fans wouldn’t be so hesitant to believe in his downtown arena vision.

FAR FROM OVER

Near the end of the hearing on Wednesday, City Council agreed to enter into negotiations with both the Katz Group and Northlands on the financing and operations of a Downtown Arena and entertainment district. However, these discussions must exclude increases in property taxes.

Council also informed city administration to set up a community consultation process and prepare a report on the financial impacts the new downtown site would have on Northlands. And Northlands will be allowed to respond to this report at a future hearing.

HOCKEY SNIPPETS

  • Oilers netminder Nikolai Khabibulin’s court case was postponed again on Wednesday.  He and his agent have two options now. They can stand before a judge with no jury in late August or wait until September 29th and face a jury. All this does is muddy the goaltending waters of the Oilers. Regardless of what happens in his case, the probability of both Jeff Deslauriers and Devan Dubnyk coming to camp seems likely.
  • And who was the arbitrator in the Clarke MacArthur arbitration ruling??? MacArthur was granted a one-year, $2.4 million contract after a scoring a career-high 16 goals and 35 points. One year with 35 points gets you $2.5 million? Was Mike Milbury ruling on this case? Gilbert Brule tallied 17 goals and 37 points last year, and he is two years younger than MacArthur. I bet the Oilers try even harder to get him signed before his August arbitration date, unless they want to pay him $2.5 million or more.
  • And I wonder what Mason Raymond is thinking right now. The Vancouver winger goes to arbitration on July 26th. He tallied 25 goals and 53 points last year. If this ruling is any indication he’ll be worth $3.6 million. Absolutely ridiculous.
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One of Canada's most versatile sports personalities. Jason hosts The Jason Gregor Show, weekdays from 2 to 6 p.m., on TSN 1260, and he writes a column every Monday in the Edmonton Journal. You can follow him on Twitter at twitter.com/JasonGregor
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offside wrote:

Maybe Katz should build the arena in Leduc County by EIA. Makes sense - easy to get to, may draw more fans from the centre of the province, close to the airport which keeps opposing players from driving through dirty Edmonton, lots of room for parking, may entice Edmonton to take the LRT to the airport, and finally, gives the City a big middle finger by not giving a penny of tax money to the City. (Alternative option - build it by the River Cree - about 5 feet away from the city.

Would the surrounding development make any money? Plus he already has a chunk of land downtown and would need to buy out and leduc and do what with the downtown location?

Here's the thing why give the City a big middle finger? He just started talking about money in the last few weeks.

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#52 Rob...
July 22 2010, 08:53AM
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When Katz bought the team he initially promised 100 million towards a downtown arena, not the surrounding area. This came off the table, being replaced by a promise of 100 million towards the arena's surrounding area, only to re-surface as a 'throw-in' concession recently. This stinks of smoke and mirrors as much as a suggested 10 percent tax hike that is eventually dropped to 5 to the glee of the tax payers.

I also have heard nothing of the promised hockey center of excellence. Have I just missed the grand plans regarding that carrot or has it become a taboo topic?

With that said, I'm all for the arena and Daryl's plans, I just wish their was less BS involved.

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#53 Minister D-
July 22 2010, 08:59AM
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I actually did find quite a bit on sun worship by doing a google search, including that Sunday was actually a day set aside for sun worship until 321 AD, when Constantine passed the first law that made it into a Church holiday rather than a pagan one. wait, is this a hockey blog? oh, sorry....um....Horcoff is overpaid!

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#54 Old Dutch Snack Attack
July 22 2010, 09:00AM
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Chris. wrote:

Bettman is trying to back taxpayers who stepped up to the plate and built a beautiful new facility in the desert (While maintaining access to a huge TV market)

The Winnipeg Jets were in an irrelevent TV market, and the people of Manitoba didn't get an adequate facility built.

If Katz and the city/province can't get a new building in place by 2014: which situation does ours more closely resemble?

The way I see it is that Edmonton is a healthy franchise that generates money for the league and pays into the league subsidy program.

Phoenix is huge money loser with no fans or television viewers.

Financially, Edmonton brings more to the table than Phoenix. I'm not going to worry about them leaving.

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#55 thunderbirdiv17
July 22 2010, 09:01AM
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Just a thought but, if they plan on building a hotel and shopping center, and casino to go with the new rink would that not create new jobs for Edmonton. I'm all for the new rink we have the oldest and smallest rink in the NHL. If Katz is not lying about not playing after 2014 then look out Edmonton cause your city is going to be losing tons of revenue. I don't live in Edmonton when I come up for games I spend my money for hotels and food and shopping while I'm there. I'm sure that there are many many other people that do the same now with no Edmonton team how much revenue will be lost.

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#56 offside
July 22 2010, 09:05AM
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Sorry, maybe I shoud have used ~ in my previous statement as I don't really want that to happen, I'm a fan of what is planned, it was just kind of a fantasy situation that if proposed by Katz, would be kind of funny.

Also the "$4 million loss" as stated in the article I believe means the Oilers lost out on $4 million had they received a share of the non-hockey revenue. I don't think it means the Oilers lost $4 million (correct me if I'm wrong).

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#57 Soft Hands McSteeley - FIST Movement
July 22 2010, 09:22AM
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PhillipSmithson wrote:

The biggest thing needed to get a new arena/entertainment district in Edmonton is guaranteed revenue from more than just the Oilers. Other cities such as Vancouver, Montreal and Toronto are larger population centers and can easily fill their venues.

Thankfully no one has compared the situation here compared to U.S. cities. State laws there are very different. There these large arenas are subsidized and given tax benefits to encourage developers to build in their cities, which is a lot different than here.

Should tax payers foot the bill, no. But I like the percentage idea, whatever percentage an investor puts in is what they get in revenues (less operating cost) per year. IE: Katz puts up 200 mil. out of a 1 billion dollar building cost (20%) then he gets 20% of the revenues less the annual operating cost. That way if the City of Edmonton puts in say 30% they then have income coming in each year to go towards the debt of the building. Find investors to put in money and offer back revenue payouts annually. (Who knows who you can find, there are quite a lot of 50 million Lotto Max winners floating around recently..)

One needs to remember that the current Rexall Place is the 2nd businest arena in north america, behind the staples center I believe. I would assume with a new state of the art arena would be just as busy if not busier attracting bigger shows/concerts/etc. So it doesn't matter that Vancoiuver/Montreal have bigger markets, we're already got a busier arena.

I think the city will benifit from a new arena being built downtown, and thus in turn should have some level of involvement in the cost of building it. But what level is the part that is up for debate.

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#58 BBOil
July 22 2010, 09:23AM
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WE NEED A NEW BUILDING!!!!!

How and where it is built is debatable. Who pays for it can be negotiated. How those people get their money back is also negotiable. What I do not see as debatable or negotiable is whether this city needs a new arena.

Anybody ever go to an event in Rexall and end up in that log jam in the concourse trying to get anywhere, or in a line to go to the bathroom expanding out into the log jammed concourse? Second oldest building in the league. Like it or not it is out of date and not as functional as it should be.

I also hate the argument that Katz is a billionaire, and as such should get no breaks in life, or should not ask for contributions from the city. He is a businessman just like anyone else. Heard an argument yesterday that the City is ridiculous for even considering paying any costs to a new building and should be putting money to small businesses and the common man. Guess what a new building requires being built. Thus contractors need to be hired. Maybe it may not be small businesses hired, but as the big businesses devote their time to the arena, perhaps that creates opportunities for smaller companies to gain work on other projects. Little thing called spin offs.

Also say Katz goes it alone and raises the capital to build it himself, and this contributes to the revitalization of downtown. Now the man just built a state of the art facility, which the City not only would benefit from revitalization wise, but also money wise because they would tax the crap out of it. Thus the City comes out huge winner.

In the end doesn't it make sense to work together to create a project with the potential to be win win for Katz and the Oil, as well as the City of Edmonton.

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#60 VMR
July 22 2010, 09:27AM
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Rob... wrote:

When Katz bought the team he initially promised 100 million towards a downtown arena, not the surrounding area. This came off the table, being replaced by a promise of 100 million towards the arena's surrounding area, only to re-surface as a 'throw-in' concession recently. This stinks of smoke and mirrors as much as a suggested 10 percent tax hike that is eventually dropped to 5 to the glee of the tax payers.

I also have heard nothing of the promised hockey center of excellence. Have I just missed the grand plans regarding that carrot or has it become a taboo topic?

With that said, I'm all for the arena and Daryl's plans, I just wish their was less BS involved.

Not true. The initial promise of $100 million was very misleading because all their announcements mentioned the arena and surrounding area together as one item to which he was commiting the cash. It never specified where that money was going to be spent, on the arena or the surrounding complex, when they later clarified they were planning to spend on the surrounding development it looked like they reneged on the deal but really they had never promised any money towards the arena itself.

Here are a few questions I have about the deal. They want to get rid of Northlands to remove the middle man but it looks like they just want to replace them with another one by bringing in AEG. What role does AEG have in this process and how are they making money off of it?

The Oilers lost @ $7 million last season but how much of that can you blame on the lack of revenue streams? The team severely overpaid several players for their performance last season and didnt get results equal to their payroll, didnt make the playoffs and thus didnt get playoff revenue. In a year where the teams salaries were managed better and/or they did get playoff revenue wouldnt this teams bottom line be much better under the current revenue deal? Do they really need all other revenues just to break even?

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#61 Crash
July 22 2010, 09:31AM
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thunderbirdiv17 wrote:

Just a thought but, if they plan on building a hotel and shopping center, and casino to go with the new rink would that not create new jobs for Edmonton. I'm all for the new rink we have the oldest and smallest rink in the NHL. If Katz is not lying about not playing after 2014 then look out Edmonton cause your city is going to be losing tons of revenue. I don't live in Edmonton when I come up for games I spend my money for hotels and food and shopping while I'm there. I'm sure that there are many many other people that do the same now with no Edmonton team how much revenue will be lost.

I do it too...in fact I'm a season ticket holder living in Red Deer...not only do the businesses of the city of Edmonton get my money when I come to town but so do other businesses along the way.

If the Oilers leave town my trips to Edmonton will become FAR less frequent. I will not be buying tickets to whatever AHL franchise moves into the beat down Rexall place. I will not need to spend money on hotels, food, gas, entertainment. I will not buy tickets to the Oil Kings, in fact I hate to say it but my trips to see NHL hockey would now take me south to ughhhhh, Calgary and the city of Calgary and it's businesses would now get my money...

I know I'm just one voice but certainly there are many more just like me...I don't really see how losing the one thing that makes Edmonton a major city would be good...

IMO the city benefits greatly by having the Oilers there and should therefore share in the cost.

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#62 Ender
July 22 2010, 09:36AM
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Oil Fever wrote:

Hey Gregor, What happens with havebeenboozin's contract if he's sentenced to 6 months??

I'm not Gregor but I'll attempt to respond to your question anyway.

In the first place, there's no way Khabi gets 6 months. That's the maximum penalty and I can't see him drawing that. The minimum penalty if he is found guilty is 30 days, and that might be more realistic.

Either way, though, any conviction is going to impact Khabibulin's ability to play games; in that scenario the question isn't if he'll miss starts, but simply how many. In addition, if he is found guilty the hurting doesn't stop for him once his time is served; he'll be left with a criminal record in the United States which could make it very difficult for him to cross the border for a long time, thus making Khabibulin potentially unavailable for all road games in the States.

For both of these reasons, if Khabibulin is convicted the Oilers will likely file with the NHL to have Khabibulin's remaining deal voided for breach-of-contract. While publically they might lament the tragic necessity of parting with their 'MVP', privately I'm betting ownership would be dancing a little jig around their offices. I admit that I'd be the first to join them.

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#63 Maverick
July 22 2010, 09:38AM
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This topic will be discussed over and over again. Its the middle of summer and its sunny and warm outside and there is tons of activities to do in Edmonton. So really the impact of the Arena is not really felt because our minds and activities are enjoying the weather. BUT, when its the middle of January and its -30c outside and there is a limited amount things to do in Edmonton, maybe then people will realize how important having a hockey team or teams actually is to keep our spirits up and occupy our thoughts during the dark cold winters in Edmonton. Yes, I would hate to see this 'project' funded by public money but is it really coming from my pocket?? Not really, lets do a little math test: The property land where the Arena area is to be build currently brings the City of Edmonton $200,000 in taxes, its a few buildings and vacant land. If an Arena, a hotel, businesses, a condo complex, etc.. are build there, the City of Edmonton would benefit from the additional property taxes from the businesses and adjecent buildings and those numbers would increase 100 fold. Would that be nice to see the City receive more money from a currently vacant unproductive area?? I think so. Also just to make another small point towards the Edmonton ecomony; the team has an average 20 millionaire hockey players here through most of the year, these players buy or rent fairly large and expensive homes, they buy expensive vehicles, they eat out at resturants, their kids (if they have any) go to school, they are part of the community. Now I'm not sure of the math, but having a guarantee of 20 millionaires in our community adding money into or ecomony a bad thing?? I hope I am not in the minority here but the team and its players bring money and non-monetary value to this community. I would hate to lose them and reading John Mackinnon article today in the journal makes me sad that people in this community need to go back to the basics and see the world for what it is and the value a hockey team is to this community and each other who live in this great city.

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@VMR

I suspect Katz is going to give the AEG some sort of exclusive rights to the events that happen when the Oilers aren't playing. I really don't know who has them now, but I could see that being their intrest. Especially if Rexall is as busy as stated.

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#65 Crash
July 22 2010, 09:46AM
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Ender wrote:

I'm not Gregor but I'll attempt to respond to your question anyway.

In the first place, there's no way Khabi gets 6 months. That's the maximum penalty and I can't see him drawing that. The minimum penalty if he is found guilty is 30 days, and that might be more realistic.

Either way, though, any conviction is going to impact Khabibulin's ability to play games; in that scenario the question isn't if he'll miss starts, but simply how many. In addition, if he is found guilty the hurting doesn't stop for him once his time is served; he'll be left with a criminal record in the United States which could make it very difficult for him to cross the border for a long time, thus making Khabibulin potentially unavailable for all road games in the States.

For both of these reasons, if Khabibulin is convicted the Oilers will likely file with the NHL to have Khabibulin's remaining deal voided for breach-of-contract. While publically they might lament the tragic necessity of parting with their 'MVP', privately I'm betting ownership would be dancing a little jig around their offices. I admit that I'd be the first to join them.

As was mentioned on Gregor's show yesterday during a discussion between Gregor and Spector...

Spector believes that if the Oilers were to use an option to terminate Khabibulin's contract the backlash on Edmonton by the NHLPA and it's members would be dramatic and would make an already difficult situation of attracting players here even more difficult...this may or may not be true but is it worth it to tempt it?

I wouldn't be so quick to say that is likely the Oilers would file with the NHL to have what's left of Khabibulin's deal voided for breach of contract.

My guess is the Oilers organization would more likely go the route of support and forgiveness than the hard line route of termination of his contract.

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#66 ubermiguel
July 22 2010, 09:47AM
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Sandy wrote:

In the early 80's Triple Five asked Jan Reimer's Council to give concessions to build the world's largest mall on the rail yards connected to their "Eaton" Centre, and they said no deal so Triple Five said fine and moved to some farm land on the out skirts of town, effectively moving the down town to 170th and killing down town for the next 20 plus years. This deal could fix that blunder, make the city's down town something to be proud of!

Gregger, I agree with chat on your show yesterday, councilors connected to Northlands should obstein from all discussions as a conflict of interest.

Go Oilers Go

A few factual errors:

- WEM opened in 1981, which means they started planning it years before - Jane Reimer was elected Alderman in 1980 and was Mayor from '89-'95, so she had little to do with WEM's creation

Regardless, I agree that downtown needs something to be proud of. An arena district would be great, but not paid for by the people for the benefit of Katz.

On a related note we can't believe the "it will create jobs/revune" argument. These large projects simply shuffle jobs/revenue from one location to another. If I didn't spend $100 at an Oilers game I'd simply spend it somewhere else in town.

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#67 Fresh Mess
July 22 2010, 09:48AM
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Capitalism means you make the investment and assume the risk Gregor, that's not what Katz is proposing.

Any supposed losses the Oilers suffered are their own fault.

Kevin Lowe 'President of Hockey Operations' $1 million US. Pat Quinn 'Senior Hockey Advisor' $1 million US. Steve Tambellini 'General Manager' $1 million US. Patrick Laforge 'President' $1 million.

I'd submit that two of those positions are not needed, especially at that price tag. The Oilers were also paying MacT's salary last year @ $1 million.

There is $3 million wasted right there. We won't even get into spending $51 million in salart on a 30th place team.

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#68 Cru Jones
July 22 2010, 09:51AM
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@Crash

The Oilers aren't moving. They are a team spending to the cap that didn't make the playoffs and they basically broke even last year in a league where most teams hemorrhage money like the Flames hemorrhage draft picks. The arena is more than full almost every night, and it's located in the country that the NHL seems to have finally realized is crucial to the continued success of the league as a whole. The Oilers aren't moving.

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#69 Ender
July 22 2010, 09:52AM
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Completely off-topic:

Eric Stephens of the ORANGE COUNTY REGISTER is reporting that the Ducks would like to bring in Vancouver's Kevin Bieksa for their blueline. While you might not care about that, you might be interested in knowing that their Plan B should that fail might be trading forward Jason Blake to the Oilers for Sheldon Souray. What thinks you of them apples?

So you don't have to look it up, Blake is 36 years old, a $4M cap hit, and signed through the end of 11-12. Last season he went 16-25-41 with the Ducks and played all 82 games. The big thing; his last name isn't Souray, so . . .

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#70 Cru Jones
July 22 2010, 09:52AM
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@Crash

The Oilers aren't moving. They are a team spending to the cap that didn't make the playoffs and they basically broke even last year in a league where most teams hemorrhage money like the Flames hemorrhage draft picks. The arena is more than full almost every night, and it's located in the country that the NHL seems to have finally realized is crucial to the continued success of the league as a whole. The Oilers aren't moving.

That wasn't meant to be directed at anyone, other than silly people.

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#71 Crash
July 22 2010, 09:54AM
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ubermiguel wrote:

A few factual errors:

- WEM opened in 1981, which means they started planning it years before - Jane Reimer was elected Alderman in 1980 and was Mayor from '89-'95, so she had little to do with WEM's creation

Regardless, I agree that downtown needs something to be proud of. An arena district would be great, but not paid for by the people for the benefit of Katz.

On a related note we can't believe the "it will create jobs/revune" argument. These large projects simply shuffle jobs/revenue from one location to another. If I didn't spend $100 at an Oilers game I'd simply spend it somewhere else in town.

Your $100 might be spent somewhere else in town but like I mentioned my $100 would now not be spent in Edmonton...that sounds like lost revenue to me...

Also the teams that come into Edmonton spend $$ in the city that would no longer be the case without the Oilers..

My guess would be that many of the charities around the city would rake in far less without the Oilers around as well...

I think you're fooling yourself if you really believe that all that would happen would be a shuffling of revenue spent on something different.

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#72 VMR
July 22 2010, 09:55AM
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Ogden Brother Jr. - Team Strudwick for coach wrote:

I suspect Katz is going to give the AEG some sort of exclusive rights to the events that happen when the Oilers aren't playing. I really don't know who has them now, but I could see that being their intrest. Especially if Rexall is as busy as stated.

I wouldnt be surprised if that is what they are getting out of it and it begs the question, why do we want them getting that money and not a locally based non-profit organization that supports events in the city? I'm not fully behind Northlands but I'd rather they get some money out of the deal(even if the complaints of mismanagement are true) than AEG get a penny.

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@Ender

So I wonder like the Witt scenario if the Oiler buyout Blake? I kinda doubt it at 2mil for 2 years a 1mil for 2 years.

Either way I guess it gets rid of a problem.

Edit: read the story seems to be more of an opinion article then anything.

If the Ducks are unable to land Bieksa, would they consider taking a flier on oft-injured, big-salaried Sheldon Souray if they can get Edmonton to take streaky, big-salaried Jason Blake?

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#74 Crash
July 22 2010, 09:57AM
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Cru Jones wrote:

The Oilers aren't moving. They are a team spending to the cap that didn't make the playoffs and they basically broke even last year in a league where most teams hemorrhage money like the Flames hemorrhage draft picks. The arena is more than full almost every night, and it's located in the country that the NHL seems to have finally realized is crucial to the continued success of the league as a whole. The Oilers aren't moving.

That wasn't meant to be directed at anyone, other than silly people.

I would suspect you are correct mostly because I do think that this arena downtown will end up being built...but if for some reason the city and it's citizens end up playing real hardball and force Katz to play out of Rexall then I think you just could see a movement happen...

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@VMR

I'd be curious to know what that non-profit company cost us a year. While I agree to some degree with keeping it local, Katz has obviously went a different route.

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#76 Archaeologuy
July 22 2010, 10:00AM
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Ender wrote:

Completely off-topic:

Eric Stephens of the ORANGE COUNTY REGISTER is reporting that the Ducks would like to bring in Vancouver's Kevin Bieksa for their blueline. While you might not care about that, you might be interested in knowing that their Plan B should that fail might be trading forward Jason Blake to the Oilers for Sheldon Souray. What thinks you of them apples?

So you don't have to look it up, Blake is 36 years old, a $4M cap hit, and signed through the end of 11-12. Last season he went 16-25-41 with the Ducks and played all 82 games. The big thing; his last name isn't Souray, so . . .

2 years left @ 4 million Cap hit (only 3 million actual salary)

He has only topped 20 goals once in the last 3 years, but he might be a decent fit to play on the 3rd line with Horc.

I would have prefered (like everyone else) a younger player but he would be easy to bury in the minors in his final year if he didnt retire.

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#77 Tyler
July 22 2010, 10:00AM
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But in the Cup run in 2006 some bar owners told me that they made their six months of sales in those two months. It does have a pretty big impact on certain sectors.

Sure but that money has to come from somewhere. If people are spending more in bars watching the Oilers, they're spending less anywhere else. The evidence is pretty overwhelming that it moves money from one pocket to another.

People were in a better mood. You weren't here to take part in that so it might be hard to grasp exactly what it meant to people in Edmonton. Whether we like it or not, the Oilers are the one thing that can rally the entire city for a few months. Of course it might only happen once every 20 years, but when it does it gets people through the next few crappy ones...I.E 2007 to now.

I don't know about it getting people through crappy years - what do you think that the last few years would have been like without the memories of 2006 to draw on? Something like Escape from New York? I'll accept the first part though - even the ex-pat communities were having a good time with it in places like Toronto.

Did the reports state how much potential business a city would lose in the future by having companies re-locate or never want to come to Edmonton. Just curious on that aspect.

I seriously doubt that this matters much one or the other. Like I say, tons of economic impact studies have been done by serious people and found nothing to suppport this sort of spending.

I can't get the books on the Oilers so I only report what they say they lost. No one is completely sure how much they lost or what caused it.

Fair enough. We know though, that they financed with a lot of debt, spent about as much money as possible on players and then missed the playoffs. It's not rocket surgery.

Those cities/owners lost money on their sale, but now Van, Mon and Ott seem to be doing fine. So there has to be a model that works and hopefully the negotiations between the city and Katz Group uncover that.

The "model" is that someone takes a huge loss, whether it's the owner or the city. John McCaw lost a lot of money on the Canucks. Rod Bryden and the creditors lost a lot of money in Ottawa and then Melnyk got a great deal. I'm not sure that Black has his facts right on Montreal, to be honest.

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#78 wangtaco
July 22 2010, 10:03AM
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@ubermiguel

It really surprises me that this Northlands angle hasn't been blown open a bit more - I mean, the Edmonton Journal gnashes it's teeth when the arena project is mentioned, and that's fine (and we won't bother mentioning the other paper....which, frankly, is a joke), but the clear conflict of interest with Northlands is something to be addressed.

If I understand it correctly, the councillors that sit on the Northlands board represent the city, and should theoretically have no interest or ties to the success of Northlands (correct me if I'm not correct in that interpretation). However, let's not kid ourselves, ol' Caterina, the mobster that he looks like, is probably going out for dinners and golf trips with his fellow board members. So when we talk abotu a conflict of interest, I know that in my profession, even if the conflict is merely perceived, it should be avoided. That means whether a true conflict exists or not, if a third party could interpret the relationship (correctly or not) as a conflict, I would excuse myself. Why are these councillors not being grilled on why they are still sitting on these hearings? As far as I know, the Rexall Group doesn't have a former employee on city council...

This post is already almost too long; I won't even get into the job creation and public funding debate.

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#79 BBOil
July 22 2010, 10:03AM
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@ubermiguel

RE: Regardless, I agree that downtown needs something to be proud of. An arena district would be great, but not paid for by the people for the benefit of Katz.

At the same time it shouldn't just be Katz and friends build an arena district, and the city benefits. It will benefit both sides and should be a partnership.

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#80 Crash
July 22 2010, 10:08AM
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Tyler wrote:
But in the Cup run in 2006 some bar owners told me that they made their six months of sales in those two months. It does have a pretty big impact on certain sectors.

Sure but that money has to come from somewhere. If people are spending more in bars watching the Oilers, they're spending less anywhere else. The evidence is pretty overwhelming that it moves money from one pocket to another.

People were in a better mood. You weren't here to take part in that so it might be hard to grasp exactly what it meant to people in Edmonton. Whether we like it or not, the Oilers are the one thing that can rally the entire city for a few months. Of course it might only happen once every 20 years, but when it does it gets people through the next few crappy ones...I.E 2007 to now.

I don't know about it getting people through crappy years - what do you think that the last few years would have been like without the memories of 2006 to draw on? Something like Escape from New York? I'll accept the first part though - even the ex-pat communities were having a good time with it in places like Toronto.

Did the reports state how much potential business a city would lose in the future by having companies re-locate or never want to come to Edmonton. Just curious on that aspect.

I seriously doubt that this matters much one or the other. Like I say, tons of economic impact studies have been done by serious people and found nothing to suppport this sort of spending.

I can't get the books on the Oilers so I only report what they say they lost. No one is completely sure how much they lost or what caused it.

Fair enough. We know though, that they financed with a lot of debt, spent about as much money as possible on players and then missed the playoffs. It's not rocket surgery.

Those cities/owners lost money on their sale, but now Van, Mon and Ott seem to be doing fine. So there has to be a model that works and hopefully the negotiations between the city and Katz Group uncover that.

The "model" is that someone takes a huge loss, whether it's the owner or the city. John McCaw lost a lot of money on the Canucks. Rod Bryden and the creditors lost a lot of money in Ottawa and then Melnyk got a great deal. I'm not sure that Black has his facts right on Montreal, to be honest.

"Sure but that money has to come from somewhere. If people are spending more in bars watching the Oilers, they're spending less anywhere else. The evidence is pretty overwhelming that it moves money from one pocket to another"

Yes but the pocket that the money moves to could very well be in another city and not in Edmonton.

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#81 Cru Jones
July 22 2010, 10:12AM
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Crash wrote:

I would suspect you are correct mostly because I do think that this arena downtown will end up being built...but if for some reason the city and it's citizens end up playing real hardball and force Katz to play out of Rexall then I think you just could see a movement happen...

I just can't see it. People forget that the Jets and Nords were having problems with attendance, and that the Canadian dollar would only get a you a small ball of belly-button lint in the US at the time. With the dollar having been at close to par for sometime now, and with the Canadian economy still making its American Cousin look like the poorly run lemonade stand that it is, I don't think - barring some rather cataclysmic events - that we'll ever see the day when the Oilers move.

The City of Edmonton will eventually come to their senses and realize it's far more profitable to have a state-of-the-art arena and all the accoutrement that follow on a site bringing in tax dollars than a empty parking lot and get on board.

As for Northlands, I seriously don't understand how they have any say in this matter at all. The only part of that regime that should remain affiliated with the Oilers is the Coliseum name. I always preferred that to arena or place or some other less-than-grandiose nonsense. We treat these guys like gladiators, let's have them play in a arena with a fitting name, and not the 1-800-ASK-GARY Amphitheatre.

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#82 Tyler
July 22 2010, 10:12AM
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Yes but the pocket that the money moves to could very well be in another city and not in Edmonton.

Good luck finding an economist to agree with you.

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#83 Crash
July 22 2010, 10:16AM
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Tyler wrote:

Yes but the pocket that the money moves to could very well be in another city and not in Edmonton.

Good luck finding an economist to agree with you.

I don't need an economist to tell me that the money I spent in that bar in Edmonton or that Tim Hortons or that Starbucks or that Ramada or that West Edmonton Mall or that anything will now be spent in another city...and I suspect there are many just like me...

If you don't think the Oilers attract many people to the city to spend their money and that money wouldn't be spent elsewhere outside the city without them then I think you're missing something...

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#84 Zamboni Driver
July 22 2010, 10:19AM
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Here is the deal, and this is from someone "pro" new arena, and who kinda likes the funding formula mostly recently described.

Blind faithers need to get a hold of themselves. The EXACT same rhetoric being used 'against' city hall can be directed towards Katz et al. Gregor's show yesterday was the prime example. He (and others) railed on endlessly about "why would they give their best bid first??!! It's a NEEGOOTIATIONNNN."

True.

Why would the City do the very same?

These are people spending OUR money. Katz is investing some of his, yep...but what he does with his millions, I couldn't care less (other than paying our "faceoff specialist" $6.5 mil this year..so whining about loss of $$ is not going to fly with me, sorry.) The City of Edmonton, while the some of the councillors are dullards, they are responsible for BEING responsible with tax money.

It's as if asking questions of Batman is somehow blasphemy! They are all Reimer lovers (per Stauffer), pinko commies, and isn't Calgary so much more enlightened?!

There needs to be negotiations...and it needs to be private.

No more gong shows like yesterday "Wow, Katz graced them with his presence for 10 whole minutes!" "Caterina railed on like a lunatic."

Only then will there be progress.

Now can we go back to talking Corsi numbers or something?

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#85 Tyler
July 22 2010, 10:20AM
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Crash - The amount you spend is insignificant in the grand scheme. Studies have been done to determine how significant the effect is. Overwhelmingly, the science is against you.

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@Tyler

What's funny is the Oilers used their "out of town" fans as talk about the whole new arena when the issue of the downtown arena was brought up. They obviously think their money has value to the organization.

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#87 Crash
July 22 2010, 10:37AM
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Tyler wrote:

Crash - The amount you spend is insignificant in the grand scheme. Studies have been done to determine how significant the effect is. Overwhelmingly, the science is against you.

Says you... Yes in the grand scheme of things the money I spend alone is insignificant but like I said there are many just like me...MANY

Have you noticed alone how many Calgary fans come up to Edmonton alone for just one hockey game? Do you believe for a second that if the Oilers weren't there that they would be in the city spending their money?

I don't see how any study as you put it could say otherwise... There are tons of people who come to Edmonton to spend their money because of the Oilers...that's a fact. It stands to reason and would be common sense to suggest that those tons of people spend their money in Edmonton only because the Oilers are there. There's no other reason.

And I can pretty much guarantee you that many of those people that spend their money there will not have a need to spend it there if the Oilers aren't there. It sounds to me like quite a bit of lost revenue. How can any study deny it?

You were the one who pointed out how if the people who spent all that money in the bar for the Stanley cup run didn't have the cup run to spend it on that they would spend it elsewhere, meaning elsewhere in the city...I just pointed out to you that this isn't the case....that is a fact to which you respond with ecomomists say otherwise...

Well who are these economists that actually believe by losing many people who spend hundreds of dollars in the city to another city that it doesn't hurt the local economy?...

I think they better redo their study.

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#88 BBOil
July 22 2010, 10:40AM
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@Tyler

If you are going to go using science, can you please provide references.

I can say I've read studies saying the opposite of what you've provide.

(I haven't, but when you start using science in an argument, gotta back it up)

Reminds me of that Gatoraide commercial with Crosby on the bike, and at the end it says "Its science, look it up". Well if its science, it must be an absolute truth that Gatoraide is awesome.

Who did the study, when did they do it, where did they do it and what variables were taken into account, not to mention who gave them the grants to do that study, all have a determination of an outcome.

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#89 David S
July 22 2010, 10:44AM
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wangtaco wrote:

It really surprises me that this Northlands angle hasn't been blown open a bit more - I mean, the Edmonton Journal gnashes it's teeth when the arena project is mentioned, and that's fine (and we won't bother mentioning the other paper....which, frankly, is a joke), but the clear conflict of interest with Northlands is something to be addressed.

If I understand it correctly, the councillors that sit on the Northlands board represent the city, and should theoretically have no interest or ties to the success of Northlands (correct me if I'm not correct in that interpretation). However, let's not kid ourselves, ol' Caterina, the mobster that he looks like, is probably going out for dinners and golf trips with his fellow board members. So when we talk abotu a conflict of interest, I know that in my profession, even if the conflict is merely perceived, it should be avoided. That means whether a true conflict exists or not, if a third party could interpret the relationship (correctly or not) as a conflict, I would excuse myself. Why are these councillors not being grilled on why they are still sitting on these hearings? As far as I know, the Rexall Group doesn't have a former employee on city council...

This post is already almost too long; I won't even get into the job creation and public funding debate.

THIS is the real story it seems nobody wants to touch. David Staples (not me BTW) wrote a great Northlands primer a while ago that starts to explain things. Its worth looking up on his blog.

I know Gregor and Brownlee are sports guys (the best in the city IMO), but I'd suggest a series about what the deal is with Northlands would be tantamount to the Daily Planet revealing the identity of Superman. Maybe Barnes would be into it.

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#90 Ball Buster
July 22 2010, 10:45AM
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The most interesting aspect of economic studies is finding out who has funded them. Just let the economist know what you want the data to say and they can make it happen.

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@BBOil

Even if there is a study I don't think I'd believe it. I know roughly 30 out of town season ticket holders. Many don't just come for the game, they end up going shopping, going out for supper, staying the night in a hotel, going out to the bars after the game etc...

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@David S

I'd expect Gregor or Brownlee to go missing if they started getting into the whole Northlands story.

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#93 Tyler
July 22 2010, 10:52AM
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Guys -

I'm not going to go out and find a ton of links for you. This isn't a particularly interesting topic for me because I've already read a lot of the research. Google guys like Andrew Zimbalist and Mark Rosentraub. There's another guy at U of A, Brad Humphreys, who is a serious guy in this - here's a quote from an interview he did at BoA:

I have gone back and looked at the economic performance of cities, in terms of income per capita, employment and wages, since 1969 looking for evidence that professional sports generate tangible economic benefits. Over this long period of time, there has been a lot of facility construction and renovation, expansion, and franchise movement. These changes provide variation in the quantity and quality of professional sports in cities over time, and I have looked for statistical evidence that changes in the “sports environment” in cities explains any of the observed variation in economic indicators over time. The short answer is: they have not. Attracting teams and building bigger or newer facilities was not associated with economic growth, or changes in the levels of any of these economic indicators. Professional sports are not, and have never been, engines of economic growth in North American cities. They are effective at moving consumer’s entertainment from one part of the city to another, and raising employment and wages in one specific sector of the local economy, the Recreation and Amusements sector, which contains professional sports teams. People interested in providing government subsidies to sports teams – team owners, real estate developers, elected officials, and others who will benefit directly from these subsidies – loudly and consistently claim that large, important economic benefits flow from professional sports. Their evidence takes the form of (1) unsupported assertions (“of course these benefits exist!”) coupled with ad hominem attacks on opponents (“only an idiot, or an economist, would believe that sports aren’t great for the local economy”) or (2) Economic Impact Studies that are really promotional forecasts based on badly flawed methodology. My research does not mean that subsidies for new hockey arenas are bad. Sports clearly produce important intangible benefits in cities, which may justify government subsidies. My research just means that we – taxpayers, elected officials, team owners, and other stakeholders – should decide on subsidies based on these intangible benefits, not on overblown claims of economic benefits (“More jobs! Higher income!”) made by a few people who will benefit immensely from the subsidies.

It's you against academia Crash.

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#94 Archaeologuy
July 22 2010, 10:55AM
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@BBOil

I would also like to point out that Economics is a member of the Faculty of Arts, not Science. As in Economics might deal with a lot of Math but it is still a Liberal Art. Way too much left up for interpretation to be considered a Science.

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#95 BBOil
July 22 2010, 10:58AM
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@Ogden Brother Jr. - Team Strudwick for coach

Agreed. I used to be one of those out of towners (minus the season tickets). My money wasn't leaving my small town for Edmonton in my pocket unless it had a reason to. That reason was usually the Oilers or Eskimos, and there were a number of season ticket holders for each in said small town.

I was just making the point that if you are going to start saying studies say this or that, you have to provide some sort of reference. I'm sure there are some legit points to what they are saying, but there are probably flaws within each study due to the depth of the discussion, as well as studies that probably say the opposite.

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Sports clearly produce important intangible benefits in cities

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#97 BBOil
July 22 2010, 11:01AM
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@Archaeologuy

Don't have to tell me. Went to school there and took the classes. Not my scene, and if all Economic studies were factual we wouldn't have recessions because everyone would know what is good for an economy and what is bad.

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#98 Crash
July 22 2010, 11:02AM
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Tyler wrote:

Guys -

I'm not going to go out and find a ton of links for you. This isn't a particularly interesting topic for me because I've already read a lot of the research. Google guys like Andrew Zimbalist and Mark Rosentraub. There's another guy at U of A, Brad Humphreys, who is a serious guy in this - here's a quote from an interview he did at BoA:

I have gone back and looked at the economic performance of cities, in terms of income per capita, employment and wages, since 1969 looking for evidence that professional sports generate tangible economic benefits. Over this long period of time, there has been a lot of facility construction and renovation, expansion, and franchise movement. These changes provide variation in the quantity and quality of professional sports in cities over time, and I have looked for statistical evidence that changes in the “sports environment” in cities explains any of the observed variation in economic indicators over time. The short answer is: they have not. Attracting teams and building bigger or newer facilities was not associated with economic growth, or changes in the levels of any of these economic indicators. Professional sports are not, and have never been, engines of economic growth in North American cities. They are effective at moving consumer’s entertainment from one part of the city to another, and raising employment and wages in one specific sector of the local economy, the Recreation and Amusements sector, which contains professional sports teams. People interested in providing government subsidies to sports teams – team owners, real estate developers, elected officials, and others who will benefit directly from these subsidies – loudly and consistently claim that large, important economic benefits flow from professional sports. Their evidence takes the form of (1) unsupported assertions (“of course these benefits exist!”) coupled with ad hominem attacks on opponents (“only an idiot, or an economist, would believe that sports aren’t great for the local economy”) or (2) Economic Impact Studies that are really promotional forecasts based on badly flawed methodology. My research does not mean that subsidies for new hockey arenas are bad. Sports clearly produce important intangible benefits in cities, which may justify government subsidies. My research just means that we – taxpayers, elected officials, team owners, and other stakeholders – should decide on subsidies based on these intangible benefits, not on overblown claims of economic benefits (“More jobs! Higher income!”) made by a few people who will benefit immensely from the subsidies.

It's you against academia Crash.

"They are effective at moving consumer’s entertainment from one part of the city to another"

I don't know how to make this any clearer to you that this statement made by this economist is not entirely true...maybe in a place that stands alone and there aren't any other options close by but I'm here to tell you that if the Oilers don't exist in Edmonton that my money will NOT just simply move from one part of the city to another....and I'm also telling you that I wouldn't be alone.

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#99 Adam
July 22 2010, 11:06AM
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@Tyler

Now I can't edit my post. But now that you have expanded your original point of contention, that NHL teams are largely worthless, to include NHL teams do have an economic ripple effect for the surrounding areas and industries you are indeed correct.

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#100 Tyler
July 22 2010, 11:14AM
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Are you an ex-OilFans guy Adam?

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