Oilers owner: You’re not subsidizing me, I’m subsidizing you!

Four days after the Edmonton city council told him that $491 million in subsidies was all it was going to give him, really, Oilers owner Daryl Katz has fired back in a big way in an interview with the Edmonton Journal:

  • Katz revealed that he’d asked for a $6 million annual operating subsidy on top of the up-front cash, but that really, the council shouldn’t have been surprised at this: a “mechanism to offset capital and operating costs of the new arena” was always part of the negotiations, he said: “I feel badly if members of council were caught off guard, but I guess that is politics and that’s not actually our responsibility.”
  • If he doesn’t get all the money he wants, “all bets are off and we’ll have to figure out what comes next. And I don’t know what that will be.” But it’ll be something bad, because “there’s a lot at stake and people in Edmonton need to understand the full picture.” Which he doesn’t know what it’s a picture of yet, but everyone needs to understand it, okay?
  • He’s not actually asking for the city for an operating subsidy; really, the Oilers would be subsidizing the city just by existing. Because without the Oilers — yes, we’re back in counterfactual land again — Edmonton “would have to pay all the capital and operating costs, just like Quebec City will, just like Kansas City, just like Phoenix, just like Seattle, just like Hamilton, and just like other cities that would all like an NHL or an NBA team to subsidize their arenas. So, you see, in our view it is the team that acts as a subsidy for a city’s arena, which is effectively infrastructure, not the other way around.”

Let’s stop and admire this for a moment, shall we? Here we have a sports team owner who has demanded that city taxpayers build a new arena just for him at a cost of almost half a billion dollars — and then says that the city should be glad he’s going to pay anything towards operating the place, because if they built an arena and his team didn’t play in it, then where would they be, huh? HUH?

Really, I’m speechless with awe. I don’t know what’s Canadian for chutzpah, but Katz deserves some kind of medal for it.

2 comments on “Oilers owner: You’re not subsidizing me, I’m subsidizing you!

  1. I’d say it’s unbelievable, Neil, but in fact it is nothing of the sort.
    Katz is nothing but a charlatan, in my view. He runs a billion dollar drug store empire, but facts about what it’s net worth actually is (*cough* Leverage, *cough*) are hard to come by.

    This process began with Katz secretly assembling land which was not zoned for anything but light commercial activity. He then presented this “plan” to the city based on the parcel of land he claimed to own, and suggested he would not consider any other location.

    Turns out he didn’t actually own the land. He had negotiated options to purchase with short timelines. Most of his $75M up front investment in land does not actually exist, unless you count revocable agreements to purchase as equity, which apparently katz does.

    Anyway, when he whined like a 3 yr old about the options he negotiated being about to expire, the city bought the land (for those of you scoring at home, yes, he did count the cost of the land as part of his $100m toward the arena at first). The city then sold some of the surrounding land that it didn’t need to build an arena for him back to Katz.

    He had originally promised a second $100m in commercial investment around the arena on the land he had bought back. No guarantees were made on when or whether this would actually happen.

    So… our hero, who bought a team valued at $155m for $200m about five years ago, has now gone from investing $200m in an arena district “for Edmonton” to demanding that the city build him a $475m (cdn) palace and then paying him to ice his team in it.

    Because he bought land adjacent to an existing casino, but was not smart enough to buy the casino license as well, he then needed someone to ram through a casino license for him, thus rendering the existing (tax revenue generating) casino next door obsolete. Ummmm…

    My only question is why only a $6m subsidy? the fools in Glendale have been paying the NHL $25m to ice the Coyotes there… Why stop at $6m? Why not $50m annually? Or $200m??