Rich Winter, who you’ll remember as the guy with the wacky idea to sell perpetual seat rights to raise money for an Edmonton Oilers arena, was in Edmonton yesterday to present said wacky idea to the city council. Which he did, projecting that it could raise $700 million by selling as many as 2,000 seats for between $278,000 and $417,000, easily paying off the building’s construction cost.
Who could be opposed to that? For one, Oilers owner Daryl Katz, the guy who suddenly wouldn’t be collecting any ticket revenue — ever — for 2,000 of his best seats. Katz Group VP Bob Black issued a statement yesterday that read, in part: “The Katz Group studied the concept of seat mortgages years ago as part of our due diligence. We determined that it would not work for the new downtown arena. … What they put forward is not achievable in our market and we consider the numbers projected to be something of a flight of fancy. Moreover, such a scheme would sacrifice the Oilers long-term financial viability in order to fund arena construction costs.”
Katz’ huffiness at the prospect of an arena-funding scheme that would actually hit his own wallet aside, the Winter plan does seem a bit dubious in other ways. First off, rights holders would get use of the seats, free of charge, for all events at the arena, hockey and otherwise; you try telling Lady Gaga that if she comes to your town, she’ll have to pay for her giant gyroscopes without the proceeds from 2,000 seats because that money has already been spent. Second, $700 million seems awfully ambitious: That’d be an average of $350,000 per seat, which is an awful lot to spend for maybe 100-150 events a year, even in perpetuity. (If I’m doing the math on mortgage rates correctly, it’s the equivalent of spending something like $200 a ticket.)
Following Winter’s presentation, city councillor Karen Leibovici (whose husband works for Katz, but who hasn’t let that stop her from being critical of the arena plans) said: “Maybe people might call me a skeptic, but I’ve always thought you don’t get something for nothing. When a deal sounds like it’s too good, there’s usually a reason for it.” Well put.