Monday, August 31, 2009


Downtown Arena Primer

I'm going to place a link to this post in the left sidebar, and will continue to update it as time goes on. That way, people can come to the site, click on the link to the left, and get their hands on everything we have posted here.

This is, to my mind, the most comprehensive gathering of information and opinion around on the proposed downtown arena. Most of the opinion is mine, and therefore reflects my viewpoint (which is in opposition), but there are invaluable contributions, from both sides of the argument, within the comment sections of each post. There are also a large number of links to newspaper articles, academic articles, and other items within those posts. I encourage all to read through what is provided here, and to share it with others. I also encourage everyone to look for other sources of information on this issue. Like I said, these opinions are mine. I make no qualms about having them, believing them to be clear and rational, but I do encourage everyone to seek out other voices and opinions in making a determination on where they stand on the issue.

Arena Powerpoint

Downloadable Documents
These two documents were created to supplement the powerpoint presentation above, and have been updated to include the most recent announcements. They will continue to be updated as events transpire.

21 Key Arena Posts

Complete List of Arena Posts



Now this is exciting...

Todd Bertuzzi will be playing for the Knights' team in the Euro Can Cup tonight -- meaning that (finally!?!) he and Rob Schremp will be on the same team. Hey, maybe Bert can teach Schremp a thing or two about what it takes to be a useful NHLer. (ÞMalik)

(P.S. Looks like they'll be shooting on Zug goalie Jussi Markkanen.)

Sunday, August 30, 2009


Arena Press Conference

The Edmonton Oilers and the Katz Group will hold a press conference Monday morning at Rexall Place with an update about the proposed downtown arena development.
--Edmonton Journal

This should be interesting.

***Update*** Nope. Not interesting at all. It was a press conference about nothing.



A Tale of Two Offseasons

I don't know what preview magazine it was, but in the 7-Eleven last night I saw a cover that featured two players from Alberta's NHL teams. One of the players was Jay Bouwmeester. The other was Nikolai Khabibulin. Let's just say I didn't leave that 7-Eleven feeling very well, despite the bag of Super Melange I had just purchased.

Thursday, August 27, 2009


Will Anyone Say No?

"We would not use current city taxes to build the arena.”
--Mayor Stephen Mandel

Emphasis mine.

Two new articles on the proposed downtown arena appeared today, one by Graham Hicks of the Edmonton Sun, the other by Gordon Kent of the Edmonton Journal. Both emphasize the fact that the mayor and his arena "feasibility" committee would still like taxpayers to foot the bill, despite consistent and overwhelming evidence that it's not in the best interests of taxpayers to do so, as well as recent polling that shows that 76% of Edmontonians do not wish to have their tax dollars used in this fashion. The fact that the mayor and his committee continue to ignore the evidence and the will of the electorate on this issue isn't terribly surprising. They've been doing so for almost three years now. What is so baffling is the fact that no one else on City Council has stood up and loudly proclaimed their opposition to the idea. The idea makes no sense economically or, as the polling suggests, politically. It's an idea disliked by people on both the left and the right of the political spectrum. So where are the champions of both common sense and the people? Is anyone on council going to have the courage to make this their issue, and say this is a bad idea? As one of those 76%, I certainly hope so.

p.s. For those who have asked, yes I coming back, and yes, I will be writing hockey-related Oilers content again, and soon.

p.p.s. Confirmation that the Katz Group has indeed purchased the land around the Baccarat Casino.

p.p.p.s Another story in today's (Friday's) Journal. Uses a lot of the stuff from the Kent article above.

***Saturday update***
Another story, focusing on the Community Revitalization Levy (CRL).




If Jim Balsillie is so untrustworthy etc. that, based on prior actions and dealings with NHL owners, he was unanimously by the Board of Governors as a suitable owner, why didn't the BoG do something about him after the Nashville situation? Did they think he wouldn't be back for Aggressive Purchase & Relocation Attempt #3? Or was it that after the PIT and NSH tries, they still found him suitable enough, but his actions specific to PHX is what makes him unsuitable to be the PHX owner?

What was it about the NHL's quasi-takeover agreement of the Coyotes during the 08/09 season that allowed Moyes to declare bankruptcy of the club? It seems reasonable to assume that they screwed up the legal agreement in some manner, or the judge would have rejected Moyes' original filing weeks ago, so what was missed? Did it arise from the NHL being afraid of the bad press associated with them officially assuming control of a franchise?

In their Coyotes bid, the NHL is putting up a (very little) bit of cash to purchase the team, and will have to finance operating losses for as long as they own the team. Where is this money coming from? Assuming it's being borrowed, where is the money for the interest payments coming from?

There is what is seen, and what is not seen. What other things could the NHL be investing that cash (or loan) in that might be of equal, or greater, benefit to the league's long term health? And as I've noted many other times before, what does it do to NHL-NHLPA relations when the NHL spends so much time and money on an effort that depresses, rather than enhances, Hockey-Related Revenue, at least in the near-term? (Particularly when it's easy to view their efforts as an attempt to preserve expansion revenue, which the players are forbidden from sharing in?)

The logic behind the NHL's bid is that it's bad business to walk out on Glendale after they invested a ton of money in the league, in large part because it might dissuade future governments from doing the same thing. But their bid only precludes relocating for one season, and the express purpose of that stay-of-execution is to allow more time for squeezing more money out of Glendale. Realistically, does that send a much warmer, fuzzier message to the governments and taxpayers of (say) Long Island?

What has changed since the Coyotes signed their lease at the Glendale Arena? Why was it a good deal at the time it was signed, but unworkable now? (Would they be in better shape if they had built it themselves and taken out a mortgage?) Or did the Coyotes never really intend to meet the original terms, and foresaw a showdown something quite like this, with the assumption that Glendale would cave (which they may)?

My opinion on this whole situation, expressed in parts in previous posts, is that how the NHL has been responding on a brief-by-brief basis is understandable, and they quite possibly have the better side of the legal arguments. But, I think they could have prevented the whole situation from happening, and once they got caught with their pants down, the best course of action would have been to say, "We can probably win this one, but it's not going to be worth it..." and accept their fate. Extort a big relocation fee from Balsillie -- possibly "negotiating" with him to go the Kitchener-Waterloo route instead, preserving the GTA as an expansion market -- and welcome him to the club (and then, who cares, treat him like he has H1N1 at BoG meetings).

Unfortunately, "admitting failure" is not really one of Bettman et al's strong suits, so the earth will continue to be scorched for a while here.

Sunday, August 23, 2009


Good News and Bad News

Good news:

Three quarters (76%) of Edmontonians ‘disagree’ (46% strongly/31% somewhat) that ‘The City should provide taxpayer’s money for a new Hockey Arena. With nearly one half strongly disagreeing with this notion, it is unlikely that further debate on the issue would make them more receptive of the idea.

Very interesting breakdown here.

The bad news? Oilers fans have to watch this lineup starting October 3rd.

***Update*** Professor Brad Humphreys has posted some quick thoughts on the International Journal of Sports Finance blog.


Tuesday, August 11, 2009


Winning isn't everything

So I've just been doing some light reading, taking in the NHL's latest motion to the bankruptcy court (ÞMirtle), and I'm left with the same overriding thought as I was a couple of months ago: are they sure this is really what they want?

In particular, I'm referring to The Bankruptcy Code Cannot Be Invoked to Abrogate The NHL's Transfer Consent Rights (pp.6-16), but broadly, the 22 pages as a whole. I'm trying to think of this from the perspective of a banker who has been asked to lend, for example, $50M to the Columbus Blue Jackets, secured by the value of the franchise. How does the outcome of this motion affect my calculation of the risk?

Surely, if there is judicial precedent saying the NHL can veto the highest bidder (or bidders) for the bankrupt franchise for their own reasons, my risk is greater by some non-zero amount, true? I may charge more interest on the loan; I may decline to make it at all -- not sure.

Now that I know that my ability to recover my money if the BJs go tits-up is partially dependent on a vote of the NHL's Board of Governors, I have to make an assessment of how likely it is that the BOG will protect my best interests if my debtor files for bankruptcy. (That is, now that I know the BOG can shaft the secured creditors, will they?) I have one obvious precedent to look at: the Coyotes. And I know the major secured creditors got shafted there because the BOG wouldn't accept Balsillie as the buyer. And why?

Well, to assess why, I doubt I'll be parsing the motions and transcripts from the court case -- I'll be looking big picture. The NHL takes great pains in this motion (after arguing that they have no obligation to do so) to assert that the Balsillie rejection was in good faith, and that he really is a dingus of the greatest order. But from behind my desk at the First Ohio Bank six months from now, I don't think the legal merits of this section of the motion matter squat.

I'll note the compelling evidence that the NHL had a preferred buyer the whole time. I'll note that, however awful a shark Jim Balsillie is, he's the founder/head/whatever of a company built on millions of satisfied customers, and that maybe the NHL BOG isn't the greatest judge of who's OK to do business with. I'll note that the NHL was insistent on keeping the Coyotes in a market that is unprofitable in the good times, and shockingly unprofitable in the bad times.

I really don't know what issues I would weight most heavily and which I would mostly ignore, but there's a good chance that my general conclusion would be, approximately, These guys have an awful lot of priorities that come ahead of me getting my money -- and unlike many/most other ways for me to lend out this $50M, bankruptcy law isn't protecting me.

Is it a bit weird for a hockey blogger to weigh in on this situation on the basis of the marginal effect it will have on the price and availability of credit? I suppose it is. But on the other hand, when the league is bellowing in federal court about the supremacy of its internal procedures over the rights of their lenders, I don't think it's crazy to suppose that some of those lenders might hear the message and act accordingly. And even the successful NHL franchises aren't operating on a cash-in-the-bank basis, and they have their weaker financial stretches as well -- credit is important.

But most of all, I think it just serves to highlight that this battle that the NHL is fighting against Jim Balsillie has costs, both immediate and long-term. I certainly understand the league's desire to maintain some control over franchise transfers, but it sure doesn't look like they picked their best spot here. This is what winning looks like?
Not sure what else to say -- that just seems like kind of a shit deal. I think they would have been a lot better off if, as soon as the bankruptcy court asserted jurisdiction, they had gone to Balsillie and said, "Let's talk relocation fee." It would have sucked for Coyotes fans, and for the real estate developers around Arena, but that seems like the lesser loss at this point.

That said, having NHL lawyers stand in front of a judge and blast someone else's trustworthiness is good entertainment, assuming you like black humour.

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