Deep Oil: do you happen to know what rate he borrow that money that has him ~so terribly over-leveraged~?

I know you fancy yourself junior executive vice-president of the billionaire police, but do you honestly believe that someone who puts a mortgage on their house (probably at a 2% APR, if not lower) is really over-leveraging himself when he puts that same 28 million into his own ventures that return a much higher percentage?

Rich people borrow from banks, because banks lend at rates that are lower than the rates of return expected (and generally obtained by) rich people. But you can't borrow 28 million unless you have something worth more than 28 million because banks aren't stupid.

Speaking as someone who doesn't pay taxes to the City of Edmonton, I am all for arena funding from the city.

Pro-Arena

Anti-people who dont want public money to go towards recreational/luxury projects

Anti-waiting another 10 years when the cost will double

Pro-downtown being somewhere I wouldnt mind walking without a rape-whistle

You are citing the linked website as a credible, objective, play-it-down-the-middle source of information?

Taking Watt's off-handed remark about a $120-million dollar business and running with it without knowing exactly what he was referring to is a bit dubious, don't you think?

Do you belive asking for a clarification -- an explanation common sense suggests the team is unlikely to provide publicly at this point -- makes it OK to go with the item anyway when the context and $120-million figure stated are wide-open to guesswork?

Does anybody believe Katz and the Oilers are going to somehow steamroll city council and push this project through without, at some point, providing numbers that support their contention?

Who cares how they do it, just build the damn arena already!

Yea... I said it.

The Oilers earning potential is limited at RX1 that's the bottom line.

A new arena/district is about improving the product & quality of life, funding should come in part from the city.

Denver used a 1% sales tax in 6 districts + private funds to build Invesco & Coors Field.

Look at Sacramento & their situation with the Kings.

Edmonton can be vibrant or irrelevant.

Quick reminder: this article is neither pro nor anti arena, simply pro-information.

Also, the indications are that that Katz wants the City to build and own the arena, not to lend him money.

More to the point, between Katz' cash injection of $100M, the CRL, proposed ticket tax and/or PSL, the net cost to the city (and/or other levels of government) would be roughly $200M. Which is about what a reno at RX1 is going to cost cost. And yes, the city will definitely pay for it because Northlands is a "non-profit" group.

Spend $200M downtown and get a whole entertainment district plus additional surrounding development (there's developers waiting in the wings) plus revenue streams from all that or put lipstick on a pig in the north end. That would seem to be a no-brainer.

The problem is Northlands. They have alot of influence on council because alot of cash is involved. Make that A LOT.

I'd wager that if Northlands wasn't involved, shovels would already be in the ground downtown.

Thanks for this Robin.

Andy's site is FAR from objective.

Two words: Tony Caterina

He simply would just turn around and give this information to Northlands in a milli second.

Non dislosure agreements don't work for a large group like this. You could never enforce it because you would never know who breached it.

Whether you like it or not, Mr. Willis, Katz is going to get his arena and he will receive a significant amount of public funds (read: tax dollars) to cover the costs. He became a billionaire for a reason, there is a method to his madness.

You can whine all you want about off-handed statements from the Oilers and a lack of clarity in the disclosure process, but welcome to the world of business. You will only know what they want you to know, that's a fact.

I don't think Willis is qualified in this area - stick to what you know: hockey stats. Oh, and stick to the facts, you flounder when you speculate in areas don't normally follow.

A) private companies do not divulge financials even to the Wall Street Journal, get used to it

B) the difference between revenue and profit is a mile wide

C) how a company organizes itself significantly impacts how its financials are reported

The bottom line is, any business that walks into Edmonton with a $400M business investment and a plan to revitalize an under developed district with up to $1.5 billion in investment, and sign a relocation agreement is going to get City concessions. If you knew anything about development, you would know that instead of trying to manufacture drama about it.

As soon as I read JW's post I immediately thought of the Marlin's situation.

My favourite quotation from Jeff Passan's article (and undeniably relevant to this topic):

"...the famous quote from Paul Beeston, the former president of MLB who now runs the Toronto Blue Jays: 'Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss, and I can get every national accounting firm to agree with me.'”

So, does it really matter if they release any financial information? It could all just be a bunch of BS anyways.

Let me preface by saying that I would love to see a new arena for the Oilers in Edmonton, regardless of location. That being said, I don't pay municipal taxes in Edmonton, but on pure principal alone, I believe if Katz wants all the operating revenue then he should pony up for all the construction costs.

Personally, I'd like to see the people of Edmonton call his bluff. If Katz chooses to move the team (which I don't think he would ever do), he better be prepared to sell his house as well. Something tells me there wouldn't be too many takers for an eight-figure mansion in Edmonton though.

P.S. I HATE Jeffery Loria.

With all due respect Robin, I do believe that Katz and the Oilers were trying to steamroll council to agree to their terms. I was sitting in the council chambers when the Rexall Sports and Entertainment Chief Financial Officer stated (to I believe Linda Sloan) that as a private company they did not have to and WOULD NOT share their finanical information with the council or the administration. This was in a response to a question for RS&E to back up their claim that they were losing money. Their arrogance was obvious and the royal treatment they got from a number of council members didn't help.

How we can believe any of their "numbers"? Which bottom line are they using? Obviously the Oil Kings and Capitals lose money, so does their red ink get thrown in? Should it? Why should a minor league baseball team's finances drive the City paying for a new arena? They have already given Katz the ballpark for free. What about the AHL and ECHL teams? How do they split the revenues from suites, naming rights, parking, concessions between the local teams?

Would those supporting Katz's "ask" do the same if Walmart wanted the City to build a bunch of stores in Edmonton with the justification that their overall business was losing money and that was the only way they could survive? Before I get jumped on, I am not arguing either way, rather proposing that because it is the Oilers, the hockey fanatics seem to want to use different reasoning. Shouldn't Katz have to lump RS&E into the drug store empire's balance sheet using his own logic?

How much money is RS&E they paying their management both at the Oilers and the other groups? Is Quinn getting $1 million to sit on his arse? That would be 25% of their claimed deficit. What about the $1 million+ they pay to support the Coyotes? Do they need all of the people they have been hiring lately? How much is Bob Black, Kevin Lowe and the whole overhead of the sports and entertainment empire eating up?

And finally, for those curb stomping Tony C, remember that Mr. Katz's chief supporter and personal friend, Mr. Mandell also sits on the Northlands board. If you are going to claim that Caterina is leaking confidential information to Northlands, then you must assume that Mandell is doing the same for the Katz group.

I would love a new downtown arena. LOVE IT! Come to think of it, I live on the westend..... a new state of the art privately funded Spruce Grove arena works equally well for me too but.....

When private corporations ask for someone else to subsidize their business to the tune of $300 million dollars, they actually do have to open & share their books or run the risk that they will not get the funding.

If the projections as to the surrounding development work, the City will do just fine in servicing the debt they will take on in building the new arena. If the projected development does not raise the neccessary funds, CRL or otherwise, the City will have to come up with an $15- 20 million annually just to carry the debt. Not to pay it off...to carry it.

Course if that happens JohnQPublic,Rick and other pro city funded arena will suffer complete amnesia about their pro City subsidy arguments and will,I am sure, ask why the City did not do more due diligence...get Rexall financials, etc.

If the City is funding this project their dilligence should consist, at a minimum, of 2 things: firstly, review the statements that the Oilers are losing money -- which means scrutinizing Rexall Sports books and secondly see if their is a need for the ancilliary development proposed for the area: hotels, office building etc. No need for those projects, no revenue from developments that do not proceed.

Fine, Team Hall. No problem.

Hey, guess what? If you don't want to "open your books" to anybody, then don't expect said "anybody" to give you hundreds of millions in free money just because you want them to!

@Ryan2 - here you go, a link to their last three. Northlands is audited every year for their annual report, which is made public. They have also been audited by the City's auditors.

http://www.northlands.com/annual-report

As for Octane, I wish them luck. Remember that the race here used 500 volunteers and Octane doesn't for their races. They get money from the Quebec government to hire people for a short time as a make work project - courtesy of Alberta's transfer payments. As the Alberta government won't pay for this, it will be interesting to see what happens and how their costs work out. And remember that Octane is a private company and don't have to tell anyone if they are making money or not.

This TSN story sounds familiar. Don't let your hate for Northlands and a lack of true knowledge of the costs of the IRL race lead you to a wrong conclusion. It is cheaper in Montreal because the temporary stands here cost $40 per seat to rent, set up and tear down. They also had to move all the concrete, run power and water, rent the airport, set up fences, etc.

http://www.tsn.ca/story/?id=331724

They told you they would not release the revenue to the City?

Should have expanded on my thought. Just because they told you they would not release their books to the public and obviously to Oilersnation does not mean they will not provide financial documents to City Council.

Well put, made me curious. But ya, if our city council is not getting that information it looks worse on the council than the Oilers.

I didn't read it that way.

They were talking about their finances in relation to regular businesses, media etc.

I am sure that they will have to release some financial information to the City in the course of their negotiations for a new arena.

Perhaps they have already (as it was one of the many questions that were given to the Katz group at the meeting of city council) it was my understanding that the city was given a mandate to work with the Katz group on the arena project.

That article is from July 27th and was presenting what was said at the meeting.

Or we privy to the negotiations that are going on now?

I can't imagine that Katz and the city have stopped talking since a mandate was given to City Council to work with Katz.

People have to remember in negotiations both sides will start at the "best possible price for them" and then negotiations happen.

What was presented at that meeting will changes as negotiations continue and progress.

I wouldn't take whydowtown.ca as a credible source as to whether the Oilers will open the books.

They will, at least partially, be opened.

And damn Wanye or bingofuel or whoever is responsible for me never being able to actually sign up due to interweb problems so I can't edit posts.

Damn you crazy kids!

What makes you so confident? They've dragged their feet at every turn so far. Moreover, Andy's been following this saga for something like four years now, and he's gone to a lot of the public meetings: I think he's got a better handle on the players than any of us.

I'm all for the arena but council would be insane to just take their word for it.

At some point, through negotiation, there must be some proof.

If I am wrong then the citizens have likely taken a bath.

See what kind of luck you have getting a $200,000.00 mortgage from your bank when you tell them your finances are private and are not a hared with anyone.

Your banker will laugh you right out of his office

And that is for $200K, Katz want $300 million+ from the City of Edmonton

It is presently unlawful for a district tax to be set in place via geographical area, the city of Edmonton only has limited options, user fees / voluntary retail surcharge (same as user fee),taxes........

Premier Ed is keeping his nose out of this one, noting that Edmonton is doing all the heavy lifting, then Calgary will just follow the similar model.

What is hurting the oilers here is limited revenue based on a 1974 building (northlands version of lipstick on a pig), increased salaries from $35mm to $55mm, and no revenue during the playoffs when labor is free.....

Disclosing figures of Rexall Sports might have a spillover effect, showing how badly this owner is leveraged, ala Tom Hicks, George Gillette.... with $100 million loan on the team with cit group, and a $20 - $28 million dollar loan on his residence as per the Edmonton Journal.

______________________________________________

DARYL KATZ MAY BE A CAPED CRUSADER BUT HE IS NO BRUCE WAYNE - Cult ... 6 Feb 2008 ... WE KNOW WHO YOU REALLY ARE DARYL KATZ!!! YOU'RE BATMAN!!!" .... One neighbour moved a month ago (not because of Katz's home, he insists, http://communities.canada.com/edmontonjournal/blogs/hockey/archive/2008/02/06/daryl-katz-may-be-a-caped-crusader-but-he-is-no-bruce-wayne.aspx

______________________________________________

PDF] CIT Agrees to Lend Katz $100 Million to Buy Oilers File Format: PDF/Adobe Acrobat - Quick View 8 Jul 2008 ... CIT Group Inc. said Monday it had completed a $100 million loan agreement with Daryl Katz for the purchase of the Edmonton Oilers. Mr. ... www.cit.com/wcmprod/groups/content/.../@cit/.../citagreestolendkatz.pdf

Argument against downtown arena: Taxpayer money should not be directed to a facility used primarily by overpaid athletes and few Edmontonians.

Argument against the downtown airport: Taxpayer money should not be directed to a facility used primarily by overpaid business execs and out of town politicians and very, very few Edmontonians.

So why in the world is there such negativity against the arena when the same arguments apply to the airport? Answer: Envision Edmonton has a better PR machine, despite it's slimy tactics (bribing community leagues, bringing in Calgarians to shame Edmontonians for even thinking about closing it).

Katz should get better PR people and get the damn thing built all ready.

This is a great article of how the Florida Marlins basically screwed over the local city council to get their way.

http://sports.yahoo.com/mlb/news;_ylt=AmIaugEfR8KIjy9jjW9A8m8RvLYF?slug=jp-marlinsfinancials082410

I would love a new arena but, doesn't make sense the city and taxpayers funding the majority of it.

LOL! That comment and your picture reminds me of the South Park episode about Indiana Jones 4. If you see Spielberg and Lucus approaching, blow that whistle as hard as you can.

To the point of JW's article, I've always said Katz will need to learn to be more transparent to deal with government and the public. He's always been very private, that simply doesn't work in the gov't/public sphere. He's a smart guy but doesn't seem to have figured this out yet.

Get Katz to show Council their financial statements. Build the Arena, but not %100 tax payers money. F**K Northlands, business is business, they gotta keep up with the big boys. They are definately a profit organization. They can just focus on the rodeo, let the Oilers make money, its bush league.

I will say this about Indiana Jones 4 and you will never here me speak on the subject again.

The movie made a valiant attempt at recreating the spirit of Von Daniken's Chariot of the Gods. Unfortunately the screenwriters failed to recognize that while Von Daniken gained success with the unwashed masses, he was mocked openly by every archaeologist/historian on the planet who didnt get his degree from the University of Phoenix.

Like Von Daniken, Indiana Jones 4 makes a mockery of its own subject and will only be remembered as a colossal failure.

George Lucas has ruined my childhood hero.

OK... so, via Tencer:

Tonight on my show, Kevin Karius of Global Sports told the tale (that) Last season Hartnell of the Flyers agreed to waive his NTC to come to Edmonton. Tambellini pulled out of a deal that would have sent Souray.

If true... WOWWWWW!

Just because they do not release the info to the public, or to media, does not mean they will not disclose to city managers/lawyer during due diligence.

JW wrote: "I was told that Watt’s figures represented the entire revenue stream for Rexall Sports Corp."

Of course! The Edmonton Ice and Trappers errr, uhm, I mean, Edmonton Oil Kings and Capitals must really pad that 120 MILLION revenue! Everyone knows that minor league teams ALWAYS outperform major league teams in revenue! Thats why they never change towns! Right?

There are two different questions about th City's role that are being discussed.

1. To what level should the City of Edmonton invest in a downtown arena regardless of the future of the Oilers in Edmonton (and inherently, the profitability of the team)?

Lets assume that the Oilers are swimming in profits. Daryl Katz could build himself a functional arena somwhere out by Spruce Grove (ala the Ottawa approach in Nepean) for probably $200 million or so. He would own it, own parking, etc. OR he can build an arena in Downtown Edmonton for about $400-450 million. Is it worth it for the City to subsidize the difference (for revitalization purposes, etc) or even to pay more and end up owning the complex? Answering this question DOES NOT require that Katz open his books.

2. To what level should the City of Edmonton invest in a downtown arena for the purpose of 'keeping the team in Edmonton'?

This is a very different question and requires that the City see the books of the Oilers and see the other opportunities available to the team elsewhere.

So, in my mind, if the request is for #1 and the Oilers make a long term commitment to remain in the City, then there is no need to see the books. If the Katz group is asking the City to consider the situation based upon question #2, then they should have to show the City it's profits/losses.

maybe there was more to this deal that would have made it not good for the Oilers...maybe...

Katz wants the city to build and own the arena (no property taxes) AND let Katz take all the revenue...Sounds like a good deal to me.

I agree 100% Johnathan. It's a very weak argument when you don't provide any evidence. I'm all for a new arena but I really dislike this shady way of doing things.

JW: Is it possible the $120 million Alan Watt mentioned could be related to what Forbes estimated the value of the Oilers?