For us hockey is a love and we are willing to do anything to quince that passion. However, we also have to remember that hockey is a business as well and that owners will not do things that will over extend themselves. Building a standalone arena will over extend Mr. Wang and cause him to lose an additional 200 million dollars on top of the 200 million he lost already. This article can explain the economic of financing an arena better than I can. http://www.lettherebelighthouse.com/2009/10/back-to-basics-why-is-there-lighthouse.html
There is a simple calculation in the finance world called Net Present Value (NPV) that can help us understand this. Money does not have universal value; thanks to inflation, a dollar today is worth more than a dollar 10 years from now. NPV looks at the initial money spent and the money expected to come in to judge whether something is a good investment.I have to agree with Nick's closing that Wang and no other possible owner would take that deal even to save a team they love
Forbes Business of Hockey 2008 was my guide for this calculation, which I did using this online calculator. According to Forbes, the average profitability for an NHL team in 2007-2008 was $4.7 million. According to their team page, the Vancouver Canucks had an operating income of $12.8 million in 2006-2007 playing in a privately-financed arena. I decided to use this number, guessing that a new arena and a better lease would help make the Islanders one of the more profitable teams in the NHL.
4% is the average rate of inflation, so I decided to use that as the discount rate.
Finally, as mentioned earlier, $320 million is the cost of the renovation.
With that little background, here we go:
Discount Rate: 4%
Life of Project: 30 years
Initial Investment: -$320 (in millions, of course)
Income, Years 1-10: $12.80 (using the Vancouver figure)
In other words, asking Charles Wang to privately finance his hockey arena would result in a net loss of over $200 million. I realize nobody is going to feel sorry for a man as rich as Mr. Wang, but none of us would take that deal.