New Edmonton Arena Construction will begin in March 2014

[-TC-]

Originally Posted by valo403

With all due respect that claim is a pretty big one to be making if you're going to follow it up with "I can't be bothered".

again, it's not a claim. it is a matter of public record.

[Locke]

Originally Posted by -TC-

Personally, I think all the posturing is stupid and both sides have handled this situation really badly.

This deal should have closed two years ago with an appropriate distribution of profits and liabilites for all....

Absolutely man, but look at the deal! Katz gets all gate receipts, concessions and all hockey and non-hockey revenue in exchange for $100M and a ticket tax to help pay for the building.

What does the City get for the honour of ponying up $125M and the land as well as covering Katz's cost overruns now? "Revitalization of the downtown core!"

Thats swell and all, but its tough to put a value on that. If you want a fair deal both sides have to negotiate fairly, right now the billionaire is being cheap and trying to squeeze a deal out of the public.

[valo403]

Originally Posted by -TC-

again, it's not a claim. it is a matter of public record.

I'm just saying, if you're going to come into the discussion with a claim (which is what it is until you substantiate it) you should probably be prepared to at least make a half-assed attempt at supporting it.

I don't know where you're pulling your information from, and to be honest it's something I'd be interested to see.

[Vulcan]

Originally Posted by valo403

I'm just saying, if you're going to come into the discussion with a claim (which is what it is until you substantiate it) you should probably be prepared to at least make a half-assed attempt at supporting it.

I don't know where you're pulling your information from, and to be honest it's something I'd be interested to see.

-

The way I remember it, Molson couldn't find an owner to buy them out until Gillette surfaced. The Canadiens were in financial trouble. Probably a combination of arena debt and the Canadian dollar.

[Flash Walken]

Running a privately owned and funded arena and team was so profitable, the Molsons bought back into the racket, having regretted their mistake and the financial losses they suffered without the profits and the goodwill that owning the Canadien's provides.

TC irrefutable facts in action.

[Daradon]

Wow, Katz has gone from hero to zero just like that. (In Edm fans eyes, I never saw him as a hero obviously)

What a sleazeball.

EDIT: Let me add, I know there is no way they move, it's just such a greasy stunt. Pun intended.

You got this, you got what is going on in the NFL... I really wonder why fans see the owners so much more highly than the players. They don't smell to great to me either.

[Tinordi]

Originally Posted by valo403

Quite the leap there. If the company that financed the arena was unable to operate it for a profit and had to sell at a loss then no, it's not solvent. I have no idea if that's the case, but mere existence does not equal solvency, particularly if you just ignore intervening events.

What's a leap is saying that privately financing your building is a bad idea because Molson sold the building and the team and then re-bought it again ten years later.

[getbak]

Originally Posted by Vulcan

-

The way I remember it, Molson couldn't find an owner to buy them out until Gillette surfaced. The Canadiens were in financial trouble. Probably a combination of arena debt and the Canadian dollar.

Also, their brewing business was having trouble remaining competitive prior to the merger with Coors, and the brewery sold off the Habs and the arena as part of a move to focus resources on the brewing side of things.

The Habs used to be owned by the Molson company, now they're owned by the Molson family.

[Resolute 14]

Originally Posted by Tinordi

What's a leap is saying that privately financing your building is a bad idea because Molson sold the building and the team and then re-bought it again ten years later.

That is simplistic to the point of being worthless.

The Molson Centre was built for $270 million in 1996. Five years later, the Molsons sold the arena AND team for $275 million. Obviously the arena depreciated in value significantly over that time and could definitely be argued as a bad investment.

On the flip side, Molson re-purchased the team, arena and Gillett's entertainment company for $500 million. I'd say the arena obviously appreciated in value in those eight years, but has never approached its original cost.

Which, of course, is why most team owners try to get public funding.

[Vulcan]

Originally Posted by Resolute 14

That is simplistic to the point of being worthless.

The Molson Centre was built for $270 million in 1996. Five years later, the Molsons sold the arena AND team for $275 million. Obviously the arena depreciated in value significantly over that time and could definitely be argued as a bad investment.

On the flip side, Molson re-purchased the team, arena and Gillett's entertainment company for $500 million. I'd say the arena obviously appreciated in value in those eight years, but has never approached its original cost.

Which, of course, is why most team owners try to get public funding.

Which shows that 3 out of the 4 privately financed arenas in Canada ran into financial problems. It sucks that billionaires and their millionaire employees can't finance their own facilities but if cities want their toys, they need to help with the finances.

[SebC]

Originally Posted by Resolute 14

The Molson Centre was built for $270 million in 1996. Five years later, the Molsons sold the arena AND team for $275 million. Obviously the arena depreciated in value significantly over that time and could definitely be argued as a bad investment.

On the flip side, Molson re-purchased the team, arena and Gillett's entertainment company for $500 million. I'd say the arena obviously appreciated in value in those eight years, but has never approached its original cost.

You don't invest in the arena for the building to appreciate - most of them end up demolished. You invest in the arena to boost your revenues.

[Rerun]

Originally Posted by SebC

You don't invest in the arena for the building to appreciate - most of them end up demolished. You get the taxpayer to invest in your arena to boost your revenues.

fyp

[moon]

Originally Posted by Sidney Crosby's Hat

How does Edmonton have the 5th highest operating income if they have the 16th highest revenue? How do they make $17 million and Calgary makes $1.1 million even though the Flames make $10 million more per year in revenue?

I don't know the answers to these questions. Just curious.

My guess is fancy corporate accounting.

As Paul Beeston says he can make the numbers say whatever he needs to.

I don't think there is much question that the Flames make more money than the Oilers do but likely not that big if a difference.

[Erick Estrada]

Originally Posted by moon

I don't think there is much question that the Flames make more money than the Oilers do but likely not that big if a difference.

Just curious how you believe there is not much question that the Flames make more money than the Oilers?

[valo403]

Originally Posted by moon

My guess is fancy corporate accounting.

As Paul Beeston says he can make the numbers say whatever he needs to.

I don't think there is much question that the Flames make more money than the Oilers do but likely not that big if a difference.

Yep, could be as simple as just parting out revenues to different entities. Oilers Hockey LLC may encompass a lot more things than Flames Hockey LLC, who may have a Flames Concessions LLC, Flames Media LLC etc.

[Enoch Root]

Originally Posted by Sidney Crosby's Hat
How does Edmonton have the 5th highest operating income if they have the 16th highest revenue? How do they make $17 million and Calgary makes $1.1 million even though the Flames make $10 million more per year in revenue?
_______

What year is being referenced?

I assumed 10-11 because I doubt all of the data is out for 11-12 yet.

Salaries are the single largest expense, and according to capgeek the salary cost for the two teams that year was:

Edmonton: $45,359,812
Calgary: $62,791,271

a $17M difference - pretty straight-forward.

(if we are talking about 11-12, the difference is only $4m however)

[speeds]

Originally Posted by Resolute 14

That is simplistic to the point of being worthless.

The Molson Centre was built for $270 million in 1996. Five years later, the Molsons sold the arena AND team for $275 million. Obviously the arena depreciated in value significantly over that time and could definitely be argued as a bad investment.

On the flip side, Molson re-purchased the team, arena and Gillett's entertainment company for $500 million. I'd say the arena obviously appreciated in value in those eight years, but has never approached its original cost.

Which, of course, is why most team owners try to get public funding.

It's most likely the case, given the pricing, that the arena dropped in value, how quickly did that sale go, did Molson need the money right away? It's not impossible that the team+arena were always "worth" more than they were sold for, but sometimes if you want to move something quickly the price needs to drop.

I don't know the history, did Molson need money pretty quickly, and this was the only way to get it? It can be worth it, big picture, to lose money on the sale of one asset if you can use the proceeds to make even more money on another.

eg. your house is worth 400K, you have no way to raise 325K other than selling your house, but you have a way to turn 325K into 2 mil over some amount of time. That investment works out, and you buy your house back for 700K in the future.

[old-fart]

Can someone tell me where the $$ was supposed to come from for this arena? I'm not trying to be a smartass, I just haven't seen it itemized.

If the arena was originally supposed to cost $425M, and Katz is putting up $100M and the city is putting up another $125M, where is the other $200M coming from? Or do I have my numbers wrong?

I don't think Katz was asking for the other $200M to come from the city too, was he? Or are they both planning on provincial/federal funding as well?

[getbak]

Originally Posted by old-fart

Can someone tell me where the $$ was supposed to come from for this arena? I'm not trying to be a smartass, I just haven't seen it itemized.

If the arena was originally supposed to cost $425M, and Katz is putting up $100M and the city is putting up another $125M, where is the other $200M coming from? Or do I have my numbers wrong?

I don't think Katz was asking for the other $200M to come from the city too, was he? Or are they both planning on provincial/federal funding as well?

The original price tag was going to be $450M.

Katz would pay $100M, the city $125M, $125M from a facility fee/ticket tax, and the final $100M was never accounted for.

The assumption was that they'd be able to get the provincial and/or federal government to provide that money, but both levels of government have consistently said no.


Since then, the estimated cost has gone up another $40M, and no one has agreed to pay that money either.

[Phanuthier]

Maybe a dumb question, but why don't they get a loan/mortgage/similar?