Edmonton Oilers owner Daryl Katz asking for city to build him a rink
The Edmonton Oilers are in need of financial help, according to owner Daryl Katz. In a meeting with city councilors on Wednesday, Katz was asking for taxpayer dollars to help save the franchise by building an 18,000-seat rink in downtown Edmonton.
"Some might say the Oilers are just a hockey team, but I think we all know they're much more than that," Katz told councilors. "But this team is also a business, and like any business it needs a sound financial base in order to be sustainable, which today it is not."
Katz's chief financial officer, Paul Marcaccio also told councilors that the Oilers are at serious disadvantage by being one of the smallest markets in the National Hockey League. Compared to other teams in the NHL, this limits the revenue they can generate from ads and broadcast rights. Marcaccio also added that the Oilers are the only team in the NHL to not generate any revenue with non-hockey events in their own rink, Rexall Place.
"Daryl Katz has had to subsidize the team by several million dollars in each of the past two years in order for the team to break even," said Marcaccio. "Under the Oilers' current operating model at Rexall Place ... that trend will likely continue."
Pending council approval, Katz is asking the city for roughly $450 million for the new facility. Katz original purchased the team for $200 million and would be willing to sign an agreement to keep the Oilers in Edmonton. He also offered to spend another $200 million toward the new rink and business development around the area.
"Taken together, I expect I will invest no less than $400 million," he said.
"I'm prepared to do my part."
Katz, a pharmacy billionaire, would like the city to own the rink with the Oilers paying a small amount of rent. He would also want to keep all revenue generated from NHL games and all other events that would take place in the new facility.
The Oilers current lease at Rexall Place expires in 2014. If city council agrees to the proposal, Katz would like construction to start next year in order to be finished by that time. He would also like the new facility to be built on a 6.4 hectare piece of land he currently owns in downtown Edmonton.
The proposal is still in its embryonic stages, as many questions are already being asked - such as who would be responsible for future losses, who gets the naming rights or even who runs the rink.
Katz has been criticized in the past for some of his business tactics and has admitted to previous mistakes, but believes his plan is right for the city and the Oilers.
"I know we haven't always made it easy, and I'll be the first to apologize for that, but I assure you our hearts are in the right place," said Katz.
However, city officials have said the deal may be feasible if the Oilers would add a five dollar tax to all game tickets. The city would then inject some money from increased property taxes from new buildings in the area.
Originally built in 1974, Rexall Place is the second oldest rink in the NHL. The New York Islanders have the distinction of playing in the oldest rink, the Nassau Veterans' Memorial Coliseum.. With a wave of several new rinks being built since the mid 1990s, it is also much smaller than most rinks in the NHL.
Despite the current financial situation of Rexall Place, the rink has certainly had its share of great times. Throughout the 1980s, when the rink was called Northlands Coliseum the Oilers were one of the most successful franchises. Led by Wayne Gretzky, the Oilers won four Stanley Cups in the span of five years in the 80s. After Gretzky was traded in the summer of 1988, they added one more in 1990, led by Mark Messier.
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