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Oilers owner Daryl Katz: ‘Edmonton is one of the smallest of small markets’

Greg Wyshynski
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Edmonton Oilers owner Daryl Katz gave an interview to the Edmonton Journal regarding his quest for a publicly funded new arena, and the transcript is as convoluted as hearing my buddy and I argue whether an X-Wing could defeat a Battlestar Galactica Viper in a dogfight. (The answer, of course, is the X-Wing; even if the targeting computer fails, Obi-Wan can guide your weapons system.)

But there were a few interesting moments among the political blather and imprudent threats — like the concept of Edmonton being "one of the smallest of small markets," as Katz put it.

From an outside Alberta perspective, that seems possible. The team's financial problems in the past left a stench of uncertainty.  We hear the small market harangue every summer during the free agent frenzy, as the Oilers overpay to attract talent.

But is Edmonton really a small market team in today's NHL?

Here's David Staples quizzing Katz:

DS: … what would you say first to the size of the Edmonton market right now, the size of the Edmonton market going forward, and this notion you should be doing more to build this privately as we saw Toronto, Ottawa, Vancouver.

DK: Well, No. 1, I can tell you the way we look at the markets. Markets are determined by the size of their media market. The size of the media market determines TV revenue, advertising and sponsorship revenue. Edmonton and Winnipeg are tied for the smallest markets in the league. That significantly affects revenue and the ability to grow. So I don't know where you're getting your numbers, but we in the league don't look at it that way.

Later, on tickets:

DS: Does not Edmonton, though, have a larger base of people who are willing to pay top dollar for NHL tickets and does that not also something (that's used for) a formulation of how big the market is?

DK: No, it doesn't. Edmonton could be viewed as a very loyal hockey market but you have to also understand we have the lowest corporate season-ticket base in the National Hockey League. We have more of an individual season-ticket base when you look at every other team in the league. That's something that's a challenge for the Oilers. To be frank, that's something that the Calgary Flames, for instance, don't have. They have a very big corporate base.

Forbes rates the Oilers at No. 15 in its latest team valuations, worth $212 million (US). Gate receipts were listed at $53 million from the previous season, with player costs at $55 million. Overall revenue has grown for the last three years, including a jump from $87 million to $96 million in the last two seasons.

For perspective, that $96 million in revenue puts them in the range with the San Jose Sharks ($96M) and the Minnesota Wild ($97M) and ahead of the Washington Capitals ($94M) — none of whom are usually listed about the League's small market teams (at least not in the last few seasons).

Jonathan Willis of Oilers Nation has long argued that the Oilers are not, in fact, playing in a small market now, and that the definition is for political purposes:

The Oilers are a big-market team. The Edmonton Oilers are the seventh-most expensive team to watch in the entire NHL (warning: PDF). Despite this, and despite being a terrible hockey team, they sell out every night. How many markets in the league would support that? It doesn't matter how many people live in the city, or what the size of the potential television market is, or any of the rest of it: all that matters is the number of people willing to pay to watch hockey. It's higher in Edmonton than it is in the majority of NHL markets; ergo, the club is a big-market team.

It is in the Oilers' interest to appear to be a small-market club. The Edmonton Oilers are negotiating with the city for support in building a new arena. Naturally, the city wants to hang on to NHL hockey; it's easier for the Oilers to extract money if the perception is that there's some danger in relocating. Obviously, there's an incentive for the team's ownership to play up that risk. Of course, as we've just pointed out, a team that sells out the building despite prices well above average and a club well below average is pretty much a dream scenario for an NHL owner.

Agreed -- Edmonton's small market be definition, but not in actual revenue generated.

The full Katz transcript is here. Give it a read and try to figure out how an owner who claims the team doesn't have an ounce of the corporate support that teams like the Flames have will suddenly fill pretty new suites in his arena.

Oh, but what an arena

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