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September 06, 2011
Quebec mayor, Quebecor reach NHL arena agreement
Seven months after announcing plans for a $400 million hockey arena to be paid for entirely with public money — but with plans for the public to get some of its money back via arena revenues — Quebec City Mayor Regis Labeaume and Pierre Karl Peladeau, president of the communications giant Quebecor, announced yesterday that they'd reached a deal for Quebecor to operate the facility. According to reports over the weekend, the contract would look something like this:
- Quebecor would get full control of the arena through 2040, with an option to extend its rights until 2045.
- Quebecor would get to sell naming rights to the building, and presumably keep other arena revenues as well.
- The company would pay the province $63.5 million up front, plus $4.5 million a year in rent, if it lands an NHL team to play in the arena. Without a team, it would pay $33 million up front, and $2.5 million a year in rent.
Without seeing more details — the agreement is apparently close to 200 pages long, and I haven't been able to find it online — on the face of it this sounds a lot like AEG's lease to manage Kansas City's Sprint Center: The city hands over all arena revenues to a professional manager in exchange for fixed rent payments. And while it looks like Quebecor will be paying a fair bit more than AEG for that privilege, the amount of money headed Quebec City's way is still a pittance compared to its costs: Even if you ignore the $200 million that the province is putting in for construction costs, $63.5 million in a lump sum plus $4.5 million in rent is still going to leave the city losing several million dollars a year on its own $200 million construction debt.
And that's if Quebecor even bothers to bring in an NHL team — making their rent higher if one is present certainly isn't a good way of incentivizing their new arena managers to bid high to lure, say, the New York Islanders.
The Quebec city council is scheduled to vote today on the arena deal, and is expected to approve it. Hopefully at least the council meeting will shed a little more light on what exactly they're agreeing to.
why "say, NY Islanders"? The franchise has a valuable cable contract that runs to 2030 that could keep them local over other struggling NHL franchises.
where do you see Phoenix Coyotes, Dallas Stars, St Louis Blues, Florida Panthers heading by 2015?
Posted by roger on September 6, 2011 03:27 PM
I only cited the Islanders because they were the most recent franchise to be rumored headed to Quebec. I agree with you that the Coyotes, for one, would make a lot more sense.
Posted by Neil deMause on September 6, 2011 03:58 PM
haven't heard those rumors myself but wouldn't be surprised if these were Quebec or Toronto-based media rumors?
Nor have I read anywhere in the Times, Post, News or Newsday where this 'rumor' was given any credence. Nor has the current Islanders owner ever indicated the team is off to Quebec if X-Y-Z doesn't happen.
The rumor sounds baseless to me.
The Islanders have a long way to go for them to become the leading candidate of a NHL franchise relocation - especially to Canada. If the Penguins (2 cups prior to relocation threats) and Nashville (0 cups) plus the Coyotes' 2nd year of league ownership were any indication of the league and its commissioner desire to keep existing franchise in current markets then the Islanders should certainly receive greater attention from the NHL as its lease expiration nears - in another FOUR years time. The game of brinksmanship hasn't even begun for them. I would hold off on the Islanders-to-Quebec scenario until something substantial happens.
Posted by Roger on September 6, 2011 04:47 PM
The hockey press was all abuzz about the Islanders going to Quebec back when their arena referendum failed. Just one example:
www.cbssports.com/mcc/blogs/entry/27694626/31050119
For the record, I don't think Stanley Cups or leases will keep the Islanders on the Island, but cable revenue and Quebecor's likely unwillingness to offer a sweetheart lease will:
blogs.villagevoice.com/runninscared/2011/08/are_the_islande.php
Posted by Neil deMause on September 6, 2011 05:05 PM
This is a horrible time to try to build an arena look at what is going on with the Vikings and A's. We aren't the only professional team having a difficult time with this process. I mean the Vikings lease ends after this season and the owner is pushing hard for L.A. and they can't get a deal done. This is why I believe that will end up in Brooklyn until the economy recovers. All of the sports economist that I read have said that the Islanders would be a profitable organiztion in brooklyn and will be better off than they are now. With the bleeding of money stopped Wang (or another owner# can retry the issue again, or Brooklyn #Barclays Owners) might want to update the arena since they are a huge success there.
Could you see this happening even with the 14,500 seats for hockey?
No, I don't see it happening:
www.fieldofschemes.com/news/archives/2011/08/4632_sorry_islanders.html
Posted by Neil deMause on September 7, 2011 08:11 AM
Then do you see the Islanders getting public money for Suffolk, Nassau, or NYC (for an arena in Queens, because I don't see the team staying in their current arena pass the end of the lease. Plus you said the cable revenue was going to keep them on Long Island, so wouldn't a newer area in Brooklyn with a fovorable lease be a better option than an out of date one?
Posted by Christian on September 7, 2011 04:23 PM
Then do you see the Islanders getting public money for Suffolk, Nassau, or NYC (for an arena in Queens, because I don't see the team staying in their current arena pass the end of the lease. Plus you said the cable revenue was going to keep them on Long Island, so wouldn't a newer area in Brooklyn with a fovorable lease be a better option than an out of date one?
Posted by Christian on September 7, 2011 04:23 PM