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(Reuters)
(Reuters)

Duhatschek: Katz lets Edmonton arena deal slip through his fingers Add to ...

Maybe it’s just bad timing on the part of Edmonton Oilers owner Darryl Katz that his arena deal with the city would blow up in the same week that NHL labour talks came grinding to a halt.

Maybe it’s just a terrible misread of how public sentiment has shifted these past few years - squarely away from taxpayer subsidies so that billionaire owners can finance new homes for their professional sport play-things.

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How Katz let a deal to build a new arena in Edmonton slip through his fingers after having an agreement in place for a year boggles the mind. It may be a case study for business schools to ponder in the years ahead - how, at a time when sentiment was already running high against billionaire owners because of the NHL lockout, he would try to tweak an existing deal further in his favour.

The justification seems to be that owners in Pittsburgh and Winnipeg received more generous support from their respective governments, so why shouldn’t Katz belly up to the trough for more, too?

Edmonton city council is in no way bound by precedents established by governing bodies in other jurisdictions. It has only one responsibility in the here-and-now, and that is to the taxpayers who elected them to office.

To think otherwise is the height of irresponsibility. And until such time as Katz explains why exactly he needs an extra $6-million per year in operating subsidies, then you have to side with Mayor Stephen Mandel on this issue.

Mandel says he is squarely behind the arena plan, because it will ultimately help the city grow and prosper. Fine. But council is also well within its rights to ask Katz why the original deal that NHL commissioner Gary Bettman helped broker back in October, 2011, suddenly isn’t good enough any more.

The fact is, times do change and there is no better illustration of that than the NHL’s experience in Phoenix over the past decade or so.

Years ago, the Coyotes were searching for a new home after determining that being a tenant in America West Arena - home of the basketball Suns and its many obstructed-view seats - wasn’t the answer anymore. Luckily, they found a willing partner in the growing city of Glendale, which put together an attractive package that convinced former Coyotes owner Steve Ellman to relocate there.

For years, the money-losing Coyotes were propped up by subsidies from the city, until suddenly - against the backdrop of a major world-wide recession - Glendale was broke. Taxpayer handouts were never that popular to begin with (remember the Goldwater Institute’s strident opposition to every new handout?) and eventually council turned off the tap.

It’s the reason Glendale’s latest deal with the Coyotes’ new prospective owner Greg Jamison is still hung up.

The political winds shifted in response to changing economic times.

Nothing happens in a vacuum.

And in the case of Edmonton’s arena plans, Katz should have been far more aware of how the ground beneath his feet was shifting. He should have realized that a further $6-million subsidy from an already agreed-upon package might just be one concession too many. In hindsight, he should have taken the money on the table and said thank you very much. He didn’t - and it makes you wonder whose advice Katz is following these days.

Maybe the solution is to get Frank Luntz’s telephone number from Bettman and start the process of damage control by doing his own focus group. Surely, they would tell him that trip down to Seattle to inspect the ancient Key Arena, in a thinly veiled threat to move the team to Washington State, was a terrible miscalculation. Thus far, Katz has explored Hamilton, Quebec and Seattle as possible alternative destinations for his team, which is not how you endear yourself to your loyal ticket-buying public.

Considering how hard Bettman has fought to secure the long-term future of the money-losing Coyotes in Phoenix, it is hard to imagine that the NHL commissioner would easily endorse a quick-and-dirty departure from Edmonton, a city where hockey matters, and where the fan base stands by a team that has gone six years in a row without making for the playoffs. Those are markets you cling to. You don’t discard them because an owner wants more, but won’t tell you why.

Now, just because this arena deal fell apart doesn’t mean there isn’t another arena deal to be made.

But it isn’t going to happen as long as the city of Edmonton feels it is being held hostage by an owner, whose commitment to the long-term future of the Oilers in Alberta appears soft and wavering.

 

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