Kukla's Korner

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Expansion fervor outpaces economic realities, especially in Las Vegas

I (hi, it's George) was going to leave this one for the morning and the boss to deal with, but I'm captain cold bucket of water during non-charitable-challenge time, so here goes:

As Paul noted, the Vancouver Province's Tony Gallagher insists that the NHL expanding to Las Vegas is a "done deal," even if there is no NHL-serviceable rink there as of yet (the Fourth Period's David Pagnotta will fill you in on the inevitability of expansion sooner than later and AEG and MGM Casinos' soon-to-be-built sports facility on the Vegas Strp), even though the Las Vegas Wranglers have folded for the time being and even though three intrepid scribes from the Las Vegas Sun have pointed out that Las Vegas' population (approximate "metro area" of 1.9 million people), TV ratings (or the lack thereof), population working nontraditional hours and the whole Vegas-is-still-recovering-from-the-recession thing all stand as very real roadblocks to any professional sports franchise thriving, for the present moment or any time soon in Vegas.

Then Sports Illustrated's wire posts this:

Apparently Las Vegas isn't the only city adding a National Hockey League expansion team: Seattle, Toronto and Quebec City will add NHL franchises as well with by a target date of 2017, according to a tweet from SportsBusinessNews' Howard Bloom.

Bloom said the four-fold expansion, which would increase the number of NHL teams to 34 and the number of Canadian team to nine, could raise $1.4 billion in expansion fees.

To which I respond, in my most serious pretend hockey writer voice:

Look, folks, we all know that the NHL would like to expand soon, and we all know that the soon-to-be built rink in Quebec City (metropolitan area population of around 700,000) is a reality, that this Vegas rink-and-or-sports-facility is being built, we know that there's a pro sports team-worthy facility operated by AEG (AEG = Anschutz Entertainment Group = who own the Kings) in Kansas City, and we know that there are all sorts of rumors of Wayne Gretzky possibly being involved in a group of investors who possibly want to build a multi-sport facility in Seattle.

We also know that there's going to be an arena in Markham, ON that should be able to host an NHL team should the NHL's only billion-dollar franchise choose to relinquish its chokehold on the Greater Toronto Area (which is less likely than you'd think).

But all of these facilities being there hasn't convinced the NHL to come running any more than the presence of billionaires and an NHL-capable facility existing already in Atlanta have convinced the NHL that Atlanta somehow needs, deserves or otherwise merits an NHL team because the population, TV ratings and existence of a facility would suggest that it's possible for a team to turn a profit in Hotlanta, should a remotely, marginally competent and only semi-dysfunctional ownership group be recruited.

This kind of chatter is swell on August 26th and 27th and all, but it's not based upon verifiable facts nor a tangible expansion plan.

Those who say, "Well it has to happen, the conferences aren't balanced" haven't watched the league not give a rat's butt about that issue for the past two years.

Those who say, "But Vegas!" ignore the fact that Las Vegas' unemployment rate (as several TMR/KK readers have pointed out) is still at a pre-recession level, or that Las Vegas is just staggering back to its feet economically. Even Jerry Bruckheimer knows this.

Those who say, "But, sources!" need to remember that we go through this song and dance every summer, and by November, we find out that whichever "shaky economics" NHL team (see: rink debt issues + ticket issues = Islanders, Devils, Panthers, Coyotes, sometimes Nashville or Anaheim, depending on the year) is in trouble is in fact in trouble again, and we find out that Gary Bettman, Bill Daly and the NHL's Board of Governors does not in fact want to expand to another market which will be receiving instead of writing revenue-sharing checks on a yearly basis...

And all of this either becomes tangible, or, 9 times out of 10, it becomes summer fluffernutter.

Would the NHL like to expand--sooner than later? Hell yes.

Would the NHL like to eventually balance its conferences? Presumably.

Would the NHL's owners LOVE to gobble up those expansion fees, which they don't have to (as of yet) share with the NHLPA? You'd better believe it.

Are there extant roadblocks between dreams of an NHL expanding to anywhere between 32 and 36 teams and doing so making actual business sense?

The NHL needs tangible and stable ownership groups committed to filling their rinks and selling their product to season ticket-buying fans and TV networks on a game-by-game basis to build fan-bases--even if they are transient ones in the, "Let's all root for whatever road team is there via a fun road trip to Vegas!" ones--and economically-vibrant franchises.

Desire to expand and empty buildings doesn't equal a master plan, especially in Gary Bettman's NHL (to his credit, for once).

Until someone can come up with some tangible evidence instead of "sources say," I will remain unconvinced, and I believe I speak for the larger KK family here when saying, "I call. Are you bluffing?"

And you're welcome for the visual aids.

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Comments

Primis's avatar

The absolute money machine that is the NFL has only 32 teams, and still has no team in LA because *it doesn’t make financial sense there*.

MLB has only 30 teams.

The notion that somehow the NHL could go support going from 30 to 34 on a whim is just preposterous beyond description.  Especially with PHX (yes I am still calling them PHX), FLA, OTT, NJ, and WIN, for example, all having uncertain futures.

Posted by Primis on 08/27/14 at 08:45 AM ET

J.J. from Kansas's avatar

To be fair, what makes financial sense to the NFL isn’t the same as what makes financial sense to the NHL.

The NFL and MLB models are both built on sports which are widely played in every single small town in America.  The pain in the ass of having a football team in LA where the millions and millions of people there can easily choose to ignore them if they’re not good is actually a bigger risk for the NFL because it’s embarrassing to a sport whose saturation in America means that there are serious lobbying groups asking to make the day after that sport’s championship game a national holiday because of the affect that collective hangover has over productivity.

You can’t really use MLB or the NFL in choosing what the absolute max should be in regards to teams. Leagues with less exposure have a better reason to exceed that theoretical maximum in trying to build the culture of the sport.

Of course, Vegas isn’t a good place to do that, but I digress.

Posted by J.J. from Kansas on 08/27/14 at 10:30 AM ET

SnLO's avatar

It would be real interesting if the NHL expanded to forty teams. Then institute a promotion / relegation system of two tiers of twenty teams. The regular season bottom two of the top tier would be relegated to the 2nd tier for the next season. In the 2nd tier the top point earning team and the winner of a 16 team playoff would be promoted to the top tier for the next season. In the top tier the 16 teams earning the most points would compete in a playoff for the cup. That would keep things interested all throughout the league table…well, maybe except for the teams placed 36-40 which would garner the same ire as the bottom team in the current league setup.

Posted by SnLO from beyond the M-1 on 08/27/14 at 12:19 PM ET

SnLO's avatar

Posted by SnLO from the sub great-white north on 08/27/14 at 01:19 PM ET

Continuing the thought: the teams in each tier would play against the other 19 teams in their tier 4 times each to make for a 76 game regular season (which should end all hockey late make / early June). But if there really must still be divisions, the could have two divisions of ten within the tier. So as to give “rivalry” to the divisions the game schedule could adapt to 3 games against the other division (30) and 6 games in division (54) to comprise an 84 game schedule to keep in comparable to the modern league scheduling.

In the second tier, in the event the promotion playoff winner is also the top 2nd tier point earner, the runner-up in the playoff would gain promotion. Only problem with that it would end up being a pointless final because either team have nothing further to gain. There would need to be a worthwhile additional incentive.

The league could then capitalize on hosting two separate playoffs comprising the involvement of 32 of its teams. This system would also drastically reduce the number of meaningless games throughout the season. What to do with incentive to not finish in places 37-40 though…

Posted by SnLO from beyond the M-1 on 08/27/14 at 12:45 PM ET

Avatar

Please spare me the pain of bringing Atlanta into the conversation. Atlanta would have supported a team if they actually had ownership and management that had the slightest clue what they were doing. On top of that, the timing was dreadful (recession) and the commitment from the NHL to help find new ownership was pathetic. Just look at how far they went for Phoenix. Not 1/10th the effort was put towards Atlanta.

The NHL should NEVER commit to a new franchise in non-traditional hockey market without committing to it for 20 years. That’s how long it takes to build a real fan base and you better hope some on ice success occurs in that 20 years because there are VERY few markets that will not go bone dry if there to show for a fans investment after a dozen years. I pick 20 years because that’s a generation. You want the adults who were brought to the rinks as kids, taking their kids. A substantial fan base is NOT created overnight.

Unfortunately, the league and other owners really don’t care if the teams succeed as long as it doesn’t affect their bottom line. Franchise fees and relocation fees are a boom to the owners. It’s why we WILL eventually see another Toronto area team. That particular franchise fee will be enormous.

Posted by evileye on 08/28/14 at 11:48 AM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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