Lamphier: In Edmonton’s downtown arena debate, Katz Group transparency would trump apology
EDMONTON - The endlessly debated downtown arena project hasn’t been a conventional business story for a long time.
Which is why I haven’t written about it for a year or more. This is all about gritty backroom politics, fan loyalties, cultural identity and civic pride, not business.
Most successful business deals only happen after both sides have had a hard look at one another’s books and come to a mutual agreement on terms that make sense for both parties.
That’s not the case here. The Oilers’ books have remained closed from the start, even though team owner Daryl Katz has been playing hardball with the city, and Oilers fans, in order to swing the best deal he can get.
After years of closed-door discussions between the city and Katz Group, even the most basic facts are still in dispute, leaving taxpayers — who will be on the hook for a big chunk of the project’s costs, no matter how you slice it — in the dark.
Since Katz has never opened the team’s books to scrutiny and cherry picks the journalists he’s willing to talk to, how can city council possibly know whether the Oilers actually lose money, as Katz insists, or generate a profit, as Forbes magazine suggests?
And if it’s unclear what the Oilers’ true financial position is, what precisely is the objective here? Is it to ensure that the Oilers remain financially viable as a small-market NHL club, as Katz argues, or is it to enhance the team’s existing profit margins?
Without access to the basic facts, how can the public, city politicians or journalists come to any reasonable conclusions about what kind of deal makes sense?
As I’ve said repeatedly, I’d love to see a new downtown arena. If designed properly and integrated into the city core, it could bring more life and activity to a downtown that is already moving in the right direction, with or without the Oilers.
But if Katz is sincere in his desire to make this project happen, he has an obligation to explain why the Oilers are simply not financially sustainable in Edmonton under the current terms.
After effectively threatening to move the team to Seattle, Katz’s recent public apology to Oilers fans was welcome and a sign that he recognizes his hardball approach has alienated many potential supporters.
Now it’s time for him to take the next step and provide the kind of financial disclosure to city council that should have been made available long ago. If Katz has a case to make, it’s time for him to make it.
Loyal Oilers fans have suffered through years of misery as the team plumbed the depths. They deserve the chance to see the team’s promising young stars hoist the Cup in the years to come.
Monday’s upbeat report on U.S. manufacturing lit a fire under stock prices, although the rally faded in late-day trading.
By the close, the Dow Jones Industrial Average was up 78 points to 13,515.11 and the S&P 500 Index gained nearly four points to 1,444.49.
Toronto’s lead index also had a positive day, tacking on 53 points to close at 12,370.19, with energy and mining stocks leading the way.
Monday’s gains came on top of a stellar September — historically the worst month of the year for stocks. All the major U.S. indexes advanced last month, with the Dow up 2.6 per cent, the S&P 500 gaining 2.4 per cent and the Nasdaq Composite Index rising 1.6 per cent.
Toronto’s S&P/TSX Composite Index topped even those juicy numbers, gaining 3.1 per cent last month.
Although October has seen the biggest stock market crashes in history — notably on Oct. 19, 1987, when the Dow plunged 22.6 per cent — investors appear surprisingly confident that the market’s recent gains will continue.
According to a weekend survey by U.S.-based Bespoke Investment Group, 51 per cent of investors expect the S&P 500 to march higher in October, up from 48 per cent the previous week.
Is that a sign of growing investor complacency, or a blind belief that the stock market will continue to levitate until the U.S. presidential election on Nov. 6th?
Only time will tell, but I suspect a painful correction is coming, if not in October, then in November.
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