If the NHL wants to test the expansion waters again, the league needs to do it the right way from a business perspective.
No short-term money grabs for long-term failure. No dilution of the talent pool that could lead the league back into the dead puck era. If the NHL decides to go forth with two new teams – the league decided to formalize the process with an agreement with its Board of Governors on Wednesday – it must learn from its mistakes of quick over-expansion in the 90s.
Las Vegas, Seattle and Quebec City were the three cities mentioned by the league as possible destinations.
“We have to weigh it a little bit for the governors just in the sense of what the additional markets do for the league and the league’s business as a whole, but it’s more of an owner decision based on what does it mean to me,” NHL deputy commissioner Bill Daly said. “You perform those models for them, the financial models and they make their best judgments and probably each ownership is a little bit different on how they view that.”
All the right words were spoken Wednesday by commissioner Gary Bettman and Daly after the BOG approved the process to look further into expansion.
“I think at this stage the game, and the business of the game, our franchises and the ownership of our franchises have never been stronger,” Bettman said. “And I suppose that all of the interest we’ve been getting expressed is a reflection of that.”
Said Daly, “I don’t think there’s any concern at all among our managers or our ownership group that there’s a lack of talent. I think the level of talent in the league has never been stronger.”
But if/when the league expands, will this all continue to be true?
In the 90s expansion the Atlanta Thrashers moved to Winnipeg eventually. The Nashville Predators were almost sold to Jim Balsillie and moved to Hamilton, Ontario. The Florida Panthers attendance numbers continue to be brutal.
Scoring was so pitiful in the late 90s and early 2000s – which has been blamed on clutching and grabbing by lesser skilled players on the league’s stars – that the NHL had to change its rulebook and remove the red line after the 2005 lockout. A lot of those players who clutched and grabbed were given jobs based on expansion.
And of course, there was the '05 lockout, which came partially by a broken system of haves and have nots – the latter being mostly the non-traditional expansion teams who needed the salary cap to control the bigger market free-spending teams. Revenue sharing was a big part of the 2012 lockout.
Judging by the NHL’s comments the league has learned from all this.
“Expansion is a very serious and important business decision,” Bettman said. “You don’t do it frivolously and I assure you that nobody is going to be persuaded by marching bands, and I doubt we would consider seriously jottings on a napkin.”
But how much do you weigh the initial potential $1 billion windfall of two teams – the league intimated the expansion fee will cost in the realm of $500 million for each team – against any possible long-term issues that can damage the league.
As Bettman noted, “When you’re a member of the league, you share in league revenues equally. If you admit an expansion team instead of dividing national league revenues by 1/30th you then divide them by 1/31th, so there is a negative economic consequence to expanding that has to be balanced against the expansion fee.”
Nice of Bettman to say that. The league has shown caution than cavalier this time around. Las Vegas’ possible owner Bill Foley has been doing all in his power to secure a franchise quickly. But the NHL has continued to put tests in front of him. First there was the ticket drive, which the league said had reached over 13,000. Now there’s this next step.
While the Vegas ticket drive deposits were for the 2016-17 season, Daly said he wouldn’t expect expansion to occur until 2017-18. That’s a smart move, which would enable both the NHL and Vegas to get ready for the historic season and give both sides time to market the game in this most non-traditional market.
Daly said arena location in Seattle is an issue. NHL buildings seem to do better in downtown metro areas and there have currently been no concrete plans for a spot downtown in the Emerald City.
“That is definitely an important element of any expansion application,” he said.
Vegas' arena is on the strip, so that won't be an issue.
The addition of Quebec City into the expansion gives the NHL more options if Seattle or Vegas fail. The latter two are considered the expansion favorites.
“The process as a whole, we haven’t set a timeline,” Bettman said.
But there is something that feels a little weird and unnatural about this. Major League Baseball has 30 teams. The NBA has 30 teams. The NFL, the major money making behemoth of North American pro sports, is the only entity that has 32. Why does the NHL, which has the least amount of overall revenue, feel the need to up its totals?
And how will we know that Las Vegas or Seattle won’t become Atlanta?
“Atlanta was … every situation is always unique,” Daly said. “I certainly wouldn’t generalize from our most recent expansion that there was any flaw in the process that was undertaken at that time. So no, I don’t anticipate the process to be any different.”
For the health of the league and the game play, he better be right.
- - - - - - -
MORE FROM YAHOO HOCKEY