It sounds like the proposal is already a nonstarter, but that’s not stopping the idea of seat mortgages from being pitched to the Edmonton City Council by Lou Weisbach and a local player agent as a way to totally fund a new Edmonton Oilers (NHL) arena.
The idea certainly is not a new one: Weisbach has been pushing the idea of seat mortgages for years without a whole lot of success. The idea: the best seats in a sports facility should be sold to investors, who would pay for the privilege of having a guaranteed seat to all events in the facility. It wouldn’t matter how much ticket prices go up in the future: so long as the investor was current on their payments, they’d control the seat. Think of it as a personal seat license on steroids.
Lou pops up when financing for a facility looks to be problematic; most recently he appeared in a discussion of funding for a new Sacramento Kings (NBA) arena.
There are, of course, lots of problems with seat mortgages. First, to raise the kind of money to build a facility, you need to sell thousands of seat mortgages with the team giving up continuing ticket revenue from the seats. (Perhaps this is why the only entity that has implemented seat mortgages is the University of California, which has no need to pay players.) Second, there have been tax issues involved with seat mortgages in the United States.
Still, expect some Edmonton councillors to look at the idea; it sounds like a really painless way to raise hundreds of millions of dollars. But there are reasons why so few seat-mortgage deals have been struck.
RELATED STORIES: City: New Edmonton arena would revitalize downtown; Oilers: No, we’re not moving to Quebec City; Oilers refine arena plan after public meetings; Katz ups arena offer to $200M; city willing to talk; Edmonton: New downtown arena financially feasible Katz: I will spend $100 million on new downtown arena; Edmonton: Cheaper to renovate than to build new downtown arena; Oilers arena zoning hearing delayed; Katz group submits arena application to Edmonton
Sign up for the free weekly Arena Digest newsletter and keep up with the latest happenings! You can sign up here.
