Quote:
Originally Posted by Tinordi
If an NHL team in Edmonton is dependent on a subsidized arena to be a valid business then it is not a valid business and should move.
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The fact is that keeping a team in Edmonton isn't dependant on a subsidized arena (katz could pay for the whole thing himself and earn it back over probably 10-15 years), but other regions ponying up funding drastically changes the model. (edit: I should add that I realize there is massive risk built into this for Katz given profitiability of the Oilers depends probably 20% on things the Oilers can control and 80% on external factors. Obviously this should factor in, but it factors in equally to every region.)
Worst prisoners dilemma for municipalities ever.
Either spend public money and give in to the threat of relocation, or don't and watch as some other region offers a sweetheart arena deal and makes the economics of the team in your region less favourable.
If every public body just stopped funding sports complexes, owners would have to only account for potential profitablility of the region.
The other problem though is that even if you don't have spinoff economic benefits, the attraction of concerts and other entertainment that is only possible with an arena gives the owners this public good argument that society seems to have a difficult time refuting. (And quite frankly, the public policy argument that while arenas may be a net negative in terms of revensue for the city, they add cultural value, is a pretty solid one.)