I Told You So…

The Edmonton Oilers have been seeking a new publicly funded arena to replace aging Rexall Place for years.  As an expert on stadium funding, and Edmontonian, I have given a lot of talks and interviews over the past few years on the topic.  Among the themes I have focused on consistently is that (1) a new publicly funded arena would be built in Edmonton; and (2) the Oilers would likely threaten to leave before all was said and done.  I said as much as recently as Tuesday afternoon in my sports economics class.

A number of news outlets are reporting today that the Oilers have been meeting with some nice folks in Quebec City who have a new arena deal under way.  And by the way, that new arena in Quebec City does not have a hockey team to play in it – yet.  Now what in the world could they be talking about?  The Mayor of Edmonton thinks they are exchanging addresses for their Christmas card lists…

“Edmonton Mayor Stephen Mandel is not at all worried that Oilers officials are in Quebec City Wednesday holding meetings. Mandel says he doesn’t take this as any kind of a threat that the team may leave the city.  He also doesn’t see the meeting as a tactic to pressure the city on a new downtown arena.”

The Toronto Sun has a different take on the situation

“Top Edmonton Oilers executives, including President of Hockey Operations Kevin Lowe, are to meet Quebec City Mayor Regis Labeaume Wednesday to discuss possible relocation.”

Of course the Oilers are denying any talk of moving.  Let me be clear.  The Oilers don’t have to overtly threaten to move, they just need to suggest that they are thinking about it. That’s how the game is played. 

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One Response to I Told You So…

  1. Dan says:

    Excerpt from a study I conducted on cities building stadia prior to having a major tenant in town.

    *********

    When the city is trying to lure a team to town, those costs go even higher because the team has the leverage of having multiple cities compete against each other. Moreover, if the team is not part of the construction design process, then once the owner does decide to move into the arena, there are millions of dollars of upgrades and changes that are made which are paid for by the public. For example, in 1990 the Suncoast Dome was opened in St. Petersburg at a cost of $138 million with the hopes of luring a MLB team. Finally, in 1998 the Tampa Bay Devil Rays began play in the facility and required upgrades of $70 million, 50% of the original cost.

    Not only were there significant public costs above and beyond the original construction costs, but also the public was paying for a facility that did not have a major tenant for many years. There are other similar recent examples in New Orleans and San Antonio where the NBA owner required publicly financed upgrades of approximately 20% of the original cost.

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