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Seattle Oilers: In which everyone calls Edmonton owner Daryl Katz on his bluff

Greg Wyshynski
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What a day it could have been for Seattle hockey.

The Edmonton Oilers touring the facilities, showing interest in bringing their cache of No. 1 draft picks to the Emerald City, putting the Seattle Whatevers (c'mmmmon Sasquatch!) one Patrick Roy-esque goaltending acquisition away from multiple Stanley Cup — a.k.a. the Nordiques/Avalanche Theorem.

[Related: Idle threat or are Oilers ready to relocate?]

Instead, the NHL's potential relocation to Seattle's spiffy new arena conceded the sports section to inept scab football officials that botched more calls than a fat-fingered blind guy with a rotary phone.

Oh, and then there's the notion that the Oilers will never, ever, ever and never move to Seattle. That Seattle is, like Kansas City before it, a City of Leverage.

Then again, so was Nashville once upon a time — and the Predators are entering their 14th season in the NHL.

The Oilers' visit to Seattle was timed with the City Council approving a new $490 million arena to house an NBA team, and in theory, an NHL team. Meanwhile, the Key Arena will be upgraded to house a team until the new building is complete.

The Katz Group was in Seattle right as Mayor Stephen Mandel set a deadline for Edmonton and the Katz Group to come to an agreement on their 4-year-long negotiation for a new arena. From Bob Black, Executive Vice President, Edmonton Arena Corporation, Katz Group:

"I can confirm that Daryl Katz, Patrick LaForge, Kevin Lowe and others from the Oilers leadership group are in Seattle for meetings and to attend the Seahawks game.

"We remain committed to working with City Administration to achieve a deal commensurate with what Winnipeg and Pittsburgh have done to sustain the NHL in those small markets. If we can achieve such a deal, the Oilers will remain in Edmonton and we can get on with the important work of developing the new arena and investing in the continued revitalization of Edmonton's downtown core.

"Nonetheless, and as the City of Edmonton is aware, the Katz Group has been listening to proposals from a number of potential NHL markets for some time. After more than four years of trying to secure an arena deal and with less than 24 months remaining on the Oilers' lease at Rexall Place, this is only prudent and should come as no surprise.

"We are extremely grateful to Oilers' fans for their patience and loyalty as we work through this process towards what we sincerely hope will be a long and successful future for the Oilers in Edmonton. We have no further comment on the status of our discussions with other markets at this time."

This led to an extraordinary number of people calling Katz on his bluff. Ryan Batty of The Copper & Blue spelled out the illogical:

The threat to move to Seattle, or any other city looking for an NHL for that matter, is an empty threat. Under the terms of the agreement that was reached between the Katz Group and the City last year Katz pays $0 towards the arena construction costs. That's not a typo, he pays nothing. His investment is a loan taken out by the City which he pays back. Katz also gets revenue from the building 48 weeks out of the year not just on hockey nights as is currently the case at Rexall. And this ignores the fact that he's already making money hand over fist in a small and outdated arena.

(An aside: Tyler Dellow has some good information on Katz, the team's current terrible lease and how Oilers ownership got what they bargained for.)

Back to Batty:

There is no other way to put it: Katz is sitting on a gold mine in Edmonton right now.

By comparison he'd have to pay rent in Seattle and would only get 45 nights worth of revenue in exchange. Also there would likely be a relocation fee he'd have to pay to the NHL which would come out of his pocket. And, although it's a bigger market from a people perspective, I don't think the NHL market in Seattle is as strong in terms of fan support as Edmonton is. Relocating the Oilers there or anywhere else makes zero economic sense if there is going to be a new building in Edmonton.

From Jeffrey Chapman of Oil on Whyte:

Mr. Black, I understand you're likely just the lip service of this press release, but I didn't think I would be required to put on my boots so early in your conversation.  The Katz Group (and the rest of the NHL watching world) are fully aware that they've got themselves a sweetheart deal going for them right now.  You've got a team that's currently making money hand over fist, you've got a season ticket waiting list that's longer than the Great Wall of China, and you consistently sell out every home game even though the product has been substandard since 2006.

Your visit to Seattle is hollow, Mr. Katz.  Everybody and their mother knows that you're a savvy, smart guy.  There's no way you're going to walk away from (a conservative estimate of) $250M+ and a guaranteed sellout every night in favour of a market that's unproven. You've  said that you'll kick in $100M back in 2011, so that's three hundred and fifty million dollars to build this damn arena.

From Damien Cox:

What he's trying to do is wring more concessions out of Edmonton on a new $475 million arena after first agreeing to a deal, then subsequently telling city council he wants millions of dollars in new concessions.

The Oilers are already profitable and have an extremely loyal fan base that has continued to buy tickets despite the dreadful showing of the team in recent years under Katz's ownership. To reflect upon the passing last week of Art Modell, the man who moved the Cleveland Browns to Baltimore and in so doing became the most hated man in Ohio, Katz clearly knows as an Edmonton native he would be risking similar pariah status if he tried to move the Oilers.

He isn't going to. He just wants to try and blackmail the city and is using Seattle to help him in the same way Peter Pocklington once threatened to move to Hamilton and Houston.

Indeed. And in the same way John McMullen used Nashville in 1995 — during a New Jersey Devils' Cup run, no less — to get a better lease deal at the Meadowlands.

The same way Mario Lemieux used Kansas City — "go, have a nice dinner, come back" — in order to get a $290 million hockey arena built for the Pittsburgh Penguins.

[Also: What We Learned: 30 NHL team updates]

What's different about both of those cases is that the arenas they would have escaped to were arenas with incredibly sweet lease agreements — Tim Leiweke, president of Anschutz Entertainment Group and governor for the Los Angeles Kings, offered the Penguins a chance to play rent-free and be equal managing partners in the Sprint Center.

The other difference: Gary Bettman is much less interested with playing the relocation game — at least at the moment — than with working to keep the Oilers in Edmonton.

So Seattle is a ploy, a gambit, a photo posted on Facebook to make your ex jealous enough to take you back. Hell, even the NHL in Seattle blog isn't taking the bait:

Don't believe the hype around Edmonton. Edmonton Oilers owner, Daryl Katz was reported as touring Seattle KeyArena today. This is way way premature but the Oilers aren't going anywhere. Here are the reasons:

1) NBA must come first. I expect this to be 6 months to a year out at best.

2) Edmonton has always had one of the top 10 teams for ticket revenue. To expect the same Arena Revenue here in Seattle would be ridiculous and won't happen.

3) The Oilers have had total home attendance of 690,399 the last 6 years…that's max capacity.

4) Seattle NHL team will have to pay more than current EDM deal on the table

5) The NHL cannot play in Key Arena…1 year maybe but that is a stretch.

6) We are talking about the Oilers!!!!

It's a leverage play for Katz. This is part of the Arena subsidy playbook. (Mario in KC) Don't believe it. The Katz tour has been getting a lot of airtime here as well. It's not fair to the hockey fans here either.

If anything, this visit and the previous arena news does elevate Seattle to next-in-line for an NHL team in the U.S.

Logic dictates that it would be another U.S. team that relocates before a Canadian team. And when the next one decides to, would it head to Emerald pastures or to Make It Eight north of the border?

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