Monday, June 24, 2024

David Staples: Katz’s Oilers now worth $1.85 billion

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Eleven years after Daryl Katz signed a deal with the City of Edmonton to build a new Downtown arena, there’s no question the deal has worked out brilliantly for Katz.

The Oilers have gone from the lowest revenue team 20 years ago to the top money maker in the National Hockey League, reports Forbes magazine, generating US$281 million in 2022-23 (tied with Toronto). In those same 20 years, the value of the Oilers has increased to an estimated US$1.85 billion US, Cdn$2.5 billion, from US$91 million.

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“The numbers that were reported really blow my socks off,” said former Oilers president and CEO Patrick LaForge, now a sports consultant specializing in arena development and gaming.

Oilers franchise revenue and value

That same arena deal has also performed in remarkable fashion for the city, said Edmonton business insider Puneeta McBryan, executive director of the Edmonton Downtown Business Association, calling the new arena and related developments the “saviours” of Downtown.

“The key to any downtown’s success anywhere in the world is people being there, so I would not to like to imagine what our Downtown would look like without Rogers Place and the Ice District,” McBryan said.

“I think it would be a dark hole,” said LaForge.

The arena and district have created pride for Edmonton, LaForge said, and have delivered on Katz’s promise of becoming the backbone of Downtown. “It’s created a reason for Downtown, more than we’ve had in a long, long time.”

Edmonton’s Downtown has been hit by a two blights, a brutal decline in pedestrian traffic ignited by businesses locking their doors due to COVID public health restrictions and an increase in public disorder due to higher crime and open drug use. Things are picking up now but informal surveys indicate traffic is 60 per cent of pre-COVID levels, McBryan said.

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Despite those challenges, the Ice District has thrived, making the most of the Edmonton hockey market for the first time.

The Oilers always knew Oil Country was an affluent market, with high levels of discretionary spending on entertainment and world travel, said LaForge. The goal was to capture 10 per cent of those world travel revenues with the Oilers and arena district.

Prominent critics of the arena plan feared the new arena would create a dead zone, but the opposite has occurred. McBryan, who lived in that area until recently, saw it transform from empty parking lots and aging structures to a district full of new businesses and residential and office skyscrapers, including Stantec Tower, the tallest building west of Toronto and most leased office building in the core.

McBryan constantly talks to colleagues across North America, all of them facing the COVID-related crash in downtown activity, and hears what it’s like for downtowns without major entertainment facilities. “It is so painful and difficult to only have office towers as the primary function of your downtown. The combination of Rogers Place and Ice District, all the residential development that that brought, and then on top of that adding in things like NorQuest College and MacEwan University, those things have been such saviours of our Downtown over the past three years. Ice District and Rogers Place have brought in tens of thousands of people every week, especially in the last year.”

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Tim Shipton, the Oilers Entertainment Group’s vice-president of communications and gaming, said Edmonton used to be seen as a small market in the NHL. But that’s changed. “It’s a big, powerful market. Groups like Forbes and others are starting to clue in that Edmonton is not a small market anymore.”

Ice District has spurred $4 billion in private sector investment Downtown, Shipton said. “Even the harshest critic at the time would say we’ve delivered on our promise of bringing the arena Downtown to be that catalyst for development and vibrancy.”

But it hasn’t been easy, Shipton said. Hundreds of millions were lost during the COVID shutdown, and now there are local issues of safety and security due to the drug addiction crisis. For example, the Oilers Entertainment Group brought in a beach volleyball tournament to Ice District but faced picking up hypodermic needles from drug users out of the sand.

The next chapter of development, including residential development north of the arena, will be built around business partnerships, not the Katz Group going it alone, Shipton said.

When folks like me pushed for the arena deal, it was to secure a viable Oilers franchise here and to revitalize Downtown. I never guessed how dark things would get for Downtown, but I also never guessed what an economic powerhouse the Oilers and Ice District would become. They give our Downtown a fighting chance, a momentous win for the city.

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