Arena deals profitable for billionaires
Every time the billionaire owners of sports franchises want a new facility constructed, they claim they need public backing and usually receive it. So, I thought it was interesting that the Katz Group, after purchasing the Oilers and then being credited for building the Ice District and Rogers Place, is now planning to build another arena in Frankfurt, Germany.
Katz Group CEO Jürgen Schreiber said the company wants to have a footprint in the space of building and managing arenas worldwide.
No doubt, especially if they can secure the same sweet deal like they received in Edmonton.
Katz Group is paying $137.8 million towards Rogers Place, but $112.8 million of that is for renting the building for 35 years (at which point they will be requiring a new building no doubt). That’s only $3.2 million per year rent for a company (Edmonton Oilers) earning $145 million in revenue and worth a reported $540 million.
As well, Katz Group takes responsibility for all expenses in operating the facility but receives all operating revenue including naming rights purchased by Rogers for 10 years. Although I can’t seem to come up with a yearly naming rights price, would it be crazy to believe the naming rights amount from Rogers covered Katz Group’s yearly rent all by itself . . . contd.
