Ex-Edmonton mayor: If I hadn’t given Katz $300m, Oilers might have moved … somewhere

With the Edmonton Oilers‘ new $676 million arena set to open next month, there’s lots of attention being paid to the roughly $311 million that taxpayers are kicking in towards the cost, and whether the public is getting a good enough deal for its money. But former Edmonton mayor Stephen Mandel, who approved the arena plan, tells CBC News that he was negotiating with a gun to his head:

“Anytime I thought that it wouldn’t happen, I was always worried that we’d end up losing a hockey team. … I think it was a big, big card that the Katz Group were able to play. In most negotiations, the city always has the upper hand, because we control the world around us. In this instance, we did not control the world around us. … To take any chance of losing that team would have been a big mistake.”

I’m not sure what Mandel is talking about with “most negotiations” — in pretty much every negotiation with a private business, there’s at least the implied threat that it will leave town, which is how we got into this whole mess — but let’s take a walk down memory lane to see how much of a threat it was that Oilers owner Daryl Katz was going to take his team and walk if he didn’t get $300 million in city cash. Katz flew to Seattle to tour their arena that is too small for hockey, and he mumbled something about needing to secure the team’s “longterm sustainability in Edmonton,” and … that’s about it. Katz’s “big, big card,” if he had one, was certainly never revealed to the public, and if he secretly revealed to Mandel a plan to move the Oilers to Albuquerque if he didn’t get his way, nobody’s telling.

Idle move threats, of course, are incredibly common in sports, for the simple reason that they provide benefits to both sides: The team owner gets a stick to use in negotiations, and the elected officials he’s negotiating with get cover when later accused of giving away the store. (“But we had to approve all that money, or else he was going to leeeeeeeave.”) There’s simply zero evidence, though, that Katz was really going to move the Oilers if his arena subsidy wasn’t approved — he might have thought about it, sure, but finding a better market than Edmonton willing to throw money at his team would have been a tough challenge: Seattle didn’t have an arena to play in (or interest in putting up lots of public funds for one), Quebec is a good bit smaller than Edmonton, Kansas City’s arena manager has no interest in a sweetheart hockey lease, Las Vegas is Las Vegas, etc.

So whatever else you want to say about Mandel’s arena negotiations, he had way more control of the world around him than he makes out — if only because “fine, go play in the street if you like” would have been a perfectly reasonable retort, if only to see what Katz then came back with. (I mean, he came back with flying to Seattle for the weekend to frighten Mandel, but that shouldn’t count.) It’s something that at least a few mayors in other cities have learned to do — come to think of it, CBC News really should have pressed Mandel about this issue, but I suppose self-imposed gullibility is everywhere.

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8 comments on “Ex-Edmonton mayor: If I hadn’t given Katz $300m, Oilers might have moved … somewhere

  1. We just had a guy in Vegas pay $500 mil for a hockey team (and another guy in Quebec offer $500 mil and get turned down) and you’re saying that Katz was making idle threats? No chance.

    1. Why do you think that 1) Katz would have wanted to sell the team or 2) if a team in Vegas or Quebec is worth $500m, a team in Edmonton, even with an oldish arena, isn’t worth considerably more?

  2. Katz may or may not have wanted to sell. If he didn’t want to sell, he certainly could’ve kept the team and taken advantage of the arena deal being offered in Las Vegas, or maybe even Quebec.

    When it comes to team value in different cities, it’s a sliding scale. Yes, Edmonton has been a hot hockey market for the last 12 years or so, but in an out of date arena the team definitely could be worth less (and definitely would be less profitable) than in a modern arena in Vegas or Quebec. I’m doubtful of the notion that Edmonton is such an attractive hockey market that nobody would ever leave.

    1. As noted in the item, Edmonton is friggin’ ginormous compared to Quebec or Vegas. Yes, a new arena makes your team more valuable, but it would have taken an extraordinary sweetheart deal for the Oilers to be worth more in those cities — certainly a more generous one than Quebecor or the Black Knights folks were going to offer.

  3. There is no way even the most generous arena deal possible in Quebec city or Las Vegas would be a better deal for the owner than just staying in the old arena in Edmonton would have been.

    Even with a declining C$, Edmonton and Calgary are both vastly more lucrative markets (both top ten NHL) than a free arena in Glendale (which might be available any day now…), Las Vegas, Seattle, Kansas City or Quebec City would be.

    If MSG, the United Center, or whatever the new Boston Gardens is called these days became available, there might be merit to “move” argument. But there’s no way Katz was ever going to leave Edmonton for a middling US market (actual or potential). None.

  4. It’s true the Mayor was negotiating with a gun to his head. He just didn’t realize it was pointed back at the owner. “Either you give us 300 million, or I’ll shoot myself by moving to a weaker hockey market.”

  5. A little vaportecture here, a little empty threat there… voila, 300 mil!

    Well played, Edmonton Oilers, well played. Piggy salutes you.

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