September 16, 2008
Wayne Gretzky recently gave an audience of Toronto businessmen a solemn reality check on the possibility of the NHL approving another franchise in Canada: That the opposition from the Toronto Maple Leafs and Buffalo Sabres to a team moving to Ontario will prevent that from happening in the "foreseeable future"; and that he believes Winnipeg doesn't "have the corporate base to support a team" either.
Winnipeg was expected to come up in a conversation at today's scheduled Board of Governors meeting in the NHL about potential expansion. So was Las Vegas, which made news this week on the arena front. Harrah's casino group will no longer partner with AEG -- owner of the Los Angeles Kings and more arenas than we can count -- on a proposed 20,000-seat arena near the Las Vegas strip.
Writer Ron Kantowski of the Las Vegas Sun points out that there was legitimate concern that other businesses in Vegas might be apathetic to purchasing suites and luxury boxes at the arena if one of their competitors was involved in its financing. Clearing out Harrah's clears out a hurdle, as a group of investors seeking an NHL team in Vegas by 2010 -- including Hollywood producer Jerry Bruckheimer, MGM Studios CEO Harry Sloan and Wall Street financier David Bonderman -- will now partner on the arena.
The only way I can see this all falling apart now is if the board of governors somehow votes against expansion into Vegas - and that's going to be a tough call to make given there'll likely be an absurd amount of cash, perhaps up to $300-million, on the table.
With that in mind, here's the real question: Can the NHL expand to Las Vegas and (one assumes) Kansas City in 2010 without catching absolute hell from Canadians, their media and their political leaders?
The idea of hockey in Vegas is romantic for fans (that don't live there): Catch a game, hit the hotel room, toss on your Swingers gear and play the tables for the rest of the night.
That romance ends at the Canadian border. Rick Westhead of the Toronto Star last year captured the cynicism that would meet a Vegas expansion bid:
Put simply, the city is not the burgeoning market some say it is. Las Vegas is merely the 51st largest media market in the U.S., smaller than some cities such as Albuquerque, N.M., Harrisburg, Pa., and Greensboro, N.C. And as a Wells Fargo analyst put it in a March report, "The Las Vegas economy continues to cool (and) the unemployment rate continues to trend higher."
Fact is, many Las Vegans are low-income employees, card dealers, waiters and hostesses who would probably find it impossible to attend many NHL games even if they were so inclined. As one sports banking source put it, Vegas is an "upside down" market. While much of North America works 9 to 5, the standard shift in Las Vegas is 5 p.m. to midnight.
He mentioned the name James Balsillie in the piece -- you know, the guy who marketed the BlackBerry after John McCain invented it. He's one reason the NHL's decision to ignore Canada and expand to "untraditional" U.S. markets becomes even more difficult: How can you soothe the anger of Canadian fans if a billionaire with a passion for hockey is passed over for a team in Hamilton or Kitchener, while two U.S. cities (including one that's already failed once) receive expansion teams?
The NHL will never admit this, but here's the best case scenario for the next two years: The League expands by two teams, and one Southern U.S. market decides to relocate. Las Vegas, Kansas City and a Canadian city all receive new franchises, one way or another.
We're not entirely sold on the need for expansion, or the mechanics of a 32-team league. (Do you expand the postseason? Do you go 15-17 or 16-16 with the conferences? Add two to the West, move one to the East? Maybe Nashville to the Southeast, assuming the Predators aren't the ones on the move.) But expansion is inevitable at this point.
And, frankly, the expansion Las Vegas Lounge Lizards (or whatever you'd call them) is as close to guaranteed as you're going to get. Which is stunning when you consider how quickly the questions about the NHL going to Vegas after Gretzky's wife and assistant coach were caught up in a gambling scandal have faded into memory.