Oilers’ “big announcement” is just selling naming rights to nonexistent arena for undisclosed sum

The Edmonton Oilers‘ “big announcement” on their planned new arena has been announced, and it is:

Rogers Communications has now acquired the naming rights for Edmonton’s future downtown arena.

Calling it a “moment of pleasure and joy for everyone involved,” Edmonton Oilers president Patrick LaForge told a Tuesday news conference the naming rights agreement moves the $480-million arena in downtown Edmonton “closer to reality.”

Hey, I guessed it!

How much the Canadian TV giant will pay to name the as-yet-nonexistent hockey venue “Rogers Place” — not to be confused with Rogers Centre and Rogers Arena — is unknown: Even Edmonton Mayor Don Iverson said he doesn’t know the dollar figure. In fact, it may be unknowable without fancy accounting tricks, as the naming-rights deal is just an expansion of Rogers’ sponsorship deal for the Oilers’ TV broadcasts, website, and mobile app.

Not that any of this matters much, since according to the Oilers’ deal with Edmonton, all naming-rights money goes into the pocket of team owner Daryl Katz, who’s already said he’s spending as much as he’s gonna towards the $676 million arena project. That means the $50-130 million funding hole is still empty. So the arena is only “closer to reality” in the sense that there’s now a corporate name to put on the renderings — which is kind of a shame, as I was looking forward to pictures of the Your Brand Here Centre.

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7 comments on “Oilers’ “big announcement” is just selling naming rights to nonexistent arena for undisclosed sum

  1. There is no “R” in Iveson, though there is an “I”, clearly, so well, whatever that means to his team spirit…

    Anyway, boring minutae aside, John Shannon of Rogers Sportsnet (why yes, Rogers does actually own everything in Canada) said the following a couple of nights ago:

    ‘there is just one hurdle left: If the development tender comes back at more than $609m for the entire development, or more than $480m for the arena itself, Katz group has to go back to council for approval. If it comes in below those numbers, they are good to go”.

    When we consider such numbers, I always like to remind people that the most expensive NHL only arena ever built was Pittsburgh’s CEC @ $321m, built during the staggering construction boom of the late 2000’s (opened 2010). It is generally considered to be staggering example of overkill, with it’s operators boasting that has more than 700 HD screens, many of them installed in spaces no-one ever goes.

    Other “recent” arenas:

    2010 New Jersey….$375m
    2003 Glendale………$185m
    2001 Dallas…………$420m
    2000 Minnesota……$180m
    2000 Columbus……$175m
    1999 Toronto………..$265m
    1999 LA Live ……….$375

    So… if you can build an arena in the most expensive market in Canada for $265m, and for multiple teams (adjusted for inflation, even construction inflation, which is much more volatile than general inflation, $360m), and build an ultra modern example of overkill in Pittsburgh for $320m, why is it that building a single tenant arena in Edmonton should cost fully 50% more than that only a half decade later?

    Furthermore, New Jersey, Dallas and LA were multiuser arenas (or intended to be…) designed more as general entertainment centres than sports arenas. Hence the massive cost difference…

    You can build a perfectly good hockey arena with all the modern bells and whistles (but no casino or grocery store inside), even in the current market, for under $300m (probably more like $250-260m) all in.

    And yet Edmonton, which can’t fix it’s potholes nor finish it’s urban transportation system, can find twice that to give to a billionaire.

  2. I’m not advocating (at all) that Edmonton spend so much on its arena, but it’s worth noting that the American Airlines Center in Dallas cost $554 million in 2013 dollars. Further, I don’t think the extra costs for the AAC were for basketball; it’s just an incredibly nice arena. I’ve been in the suites there, and everything about that facility is top-notch. Even the concourses are gorgeous.

    That being said, I don’t understand why Edmonton needs an arena as nice as the ones in Dallas, LA, or New Jersey when you consider those are the 4th, 2nd, and 1st largest metro areas in the U.S.

    Arenas in 2013 dollars according to the Consumer Price Index, not including cost of renovations (if applicable):

    **Cost in 2013 dollars – Arena (Location); Year Opened**
    $554 million – American Airlines Center (Dallas); 2001
    $525 million – Staples Center (Los Angeles); 199
    $414 million – Prudential Center (New Jersey); 2007
    $378 million – Verizon Center (Washington); 1997
    $351 million – Consol Energy Center (Pittsburgh); 2010
    $340 million (US) / $364 million (C) – Centre Bell (Montreal); 1996
    $320 million (US) / $342 million (C) – Air Canada Centre (Toronto); 1999
    $313 million – Wells Fargo Center (Philadelphia); 1996
    $279 million – Jobing.com Arena (Phoenix); 2003
    $276 million – United Center (Chicago); 1994
    $265 million – BB&T Center (Florida); 1998
    $263 million – SAP Center at San Jose (San Jose); 1993
    $262 million – Pepsi Center (Denver); 1999
    $259 million – TD Garden (Boston); 1995
    $237 million – Nationwide Arena (Columbus); 2000
    $221 million – PNC Arena (Carolina); 1999
    $220 million – Honda Center (Anaheim); 1993
    $219 million – Rogers Arena (Vancouver); 1995
    $214 million (US) / $229 million (C) – Canadian Tire Centre (Ottawa); 1996
    $214 million – Bridgestone Arena (Nashville); 1996
    $213 million – Scottrade Center (St. Louis); 1994
    $207 million – Tampa Bay Times Forum (Tampa Bay); 1996
    $190 million – First Niagara Center (Buffalo); 1996
    $176 million – Xcel Energy Center (Minnesota); 2000

  3. Thanks for the updated list Erik.

    Do you agree it’s necessary to adjust major construction projects by a factor greater than the CPI to account for the inherent volatility in a business that is very much boom or bust, and which has a relatively small number of companies capable of successfully completing the master contract(s)?

    There are a lot fewer contractors capable of completing (or even taking on) a 50 unit housing development than a single family home, for example. The pyramid gets quite thin at the top (IE: major hospitals, schools, arenas, shopping malls etc).

  4. John:

    I would definitely agree, yes. Not only are there a limited number of contractors, but there’s large variance in their availability. Further, costs obviously rise and fall alongside material & labor costs, which fluctuate with supply and demand. Just because steel cost X in 1999, it certainly doesn’t mean that steel costs X + (X*inflation rate) in 2013. Depending on the materials used, one could also argue that shipping costs play a major role as well. A lot of the steel needed for large projects like stadiums and arenas often comes from distances far removed from the construction site, for example (see: Minnesota steel controversy).

    When all is said and done, I think we can both safely say that Edmonton is vastly overspending.

  5. Why do Canadians name their sports facilities as such-and-such “place”? Does it translate to French better than “arena”?

  6. El: Canadians don’t always name facilities “Place”. In this case, Rogers already has:

    Rogers Centre (formerly skydome)

    Rogers Arena (Canucks rink)

    along with a ton(ne) of other facilities they’ve plastered their logo feces (to quote George Carlin) all over. So, the reason they have chosen “Place” this time is no doubt because they are running out of names.

    Of course, the existing Edmonton rink is named “Rexall Place”, so there is some weird sort of continuity there… despite the fact that the new name will never be on the old building.

    Having said all that… Place in French is “Place” (with a hard a, rather than soft), so it does translate very easily…

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