Rambling Thoughts on Future NHL Expansion

by | Dec 10, 2017 | Soapbox | 20 comments

The National Hockey League’s decision to allow a prospective ownership group in Seattle to submit a bid for an expansion franchise could have considerable repercussions.

It’s no secret the league has had interest in putting a franchise in the American Pacific Northwest for some time. Seattle has a long hockey history and is the current home of the WHL’s Thunderbirds. A competitive NHL franchise in that city would be a natural rival with the Vancouver Canucks.

Expansion to Seattle would balance out the league’s two conferences, with 16 teams in each. It’ll also be another nice cash grab for the exisiting team owners, as the proposed expansion fee of $650 million would go directly into their pockets. That’s because it isn’t counted as hockey-related revenue under the current collective bargaining agreement, an apparent lack of foresight by the NHL Players Association during the last round of CBA talks that they’re probably still kicking themselves over on a daily basis.

While the PA will miss out on in those sweet expansion fees, its membership will reap the benefits of the 23 new jobs created for the players and the additional hockey-related revenue another new franchise will generate, including higher salary-cap hikes and potentially lower escrow clawbacks from their salaries. Maybe, just maybe, that might pave the way toward smoother future CBA talks, avoiding another unnecessary work stoppage that only serves to test the patience of the league’s fans.

Expansion into Seattle, however, dims the possibility of the NHL returning to Quebec City. Despite the presence of a sparkling new 18,000-seat venue in the capital of la belle province, it’s still not enough to woo a new NHL team.

Location, of course, is the problem. The NHL doesn’t want to widen the existing imbalance between the conferences by placing another team in the East. Quebec City’s market size also pales in comparison to Seattle. Yes, it may be more hockey-mad and would be fueled as well by the rekindling of the rivalry with the Montreal Canadiens, but its media reach would be limited in scale. Factor in the lower value of the Canadian dollar in recent years, and Quebec City’s chances of landing an expansion franchise appears remote.

Or is it?

The city of Houston could be another potential location for an NHL expansion club. Tilman Fertitta, the owner of the National Basketball Association’s Houston Rockets, last month met with NHL commissioner Gary Bettman to discuss the potential of a pro hockey franchise in that Texas city.

Like Seattle, Houston has a long hockey history. It was home to the WHA Aeros of the 1970s and the IHL Aeros from 1994 to 2001. The city came close to landing an NHL team in 1997, when a group of local businessmen nearly succeeded in buying the Edmonton Oilers with the intent of relocating that franchise.

Should the Vegas Golden Knights build upon its current inaugural-season success and a franchise in Seattle follow suit, the NHL board of governors could be enticed to consider further expansion with new clubs in Houston and Quebec City. If potential owners in those cities are willing to pay the skyrocketing expansion fees and can prove those markets could sustain NHL clubs, it might not be a far-fetched idea.

Then again, maybe the league brain trust is keeping an eye on Houston and Quebec City as potential relocation cities for currently struggling franchises.

The impending sale of the Carolina Hurricanes to Dallas businessman Tom Dundon prompted some NHL followers to consider that club a relocation candidate. However, Bettman insists the Hurricanes aren’t moving. Besides, the earliest Dundon could move the team (if that’s what he wants) is 2024, when their arena lease expires. Trying to buy his way out of it would prove too costly.

Meanwhile, the future of the Arizona Coyotes has been in doubt for years. Bettman has stubbornly supported the franchise, currently in the midst of seeking a deal to build a new arena closer to downtown Phoenix. Should those efforts fall through, however, Houston could a tempting destination.

Should the New York Islanders’ bid to construct a new arena in Belmont Park fall through, their future in the New York area could be in question. With the Isles’ relationship with the owners of Barclays Center souring and Bettman insisting the club won’t be returning to Nassau Coliseum, Quebec City or Houston could become quick fallback plans, just as Winnipeg was in 2011 for the Atlanta Thrashers.

Houston could also be the future home of the Calgary Flames. Negotiations between the Flames ownership and the city of Calgary over a new arena are downright frosty right now, to the point where team co-owner Murray Edwards recently voiced his pessimism to his fellow league governors over the prospects of getting a deal done.

Edwards also said the Flames aren’t for sale. However, that doesn’t mean the current ownership won’t threaten to relocate if they can’t get the city of Calgary to bend to their demands over the distribution of the construction costs.

To the surprise of no one, the Flames want the city to pick up more of the tab than Mayor Naheed Nenshi is willing to spend. With Nenshi recently reelected to a four-year term, don’t be surprised if Murray and Bettman start ratcheting up the relocation threats.

Many NHL pundits doubt the Flames are going anywhere, suggesting it would be difficult for Edwards and Bettman to justify leaving a strong hockey market with a rich history. Don’t kid yourself. If the Calgary city council is unwilling to bend, the Flames will be in Houston before you can finish singing, “All My Ex’s Live in Texas.”

And they’ll justify it by painting Calgary’s municipal politicians as the bad guys for robbing the good folks of the Stampede City of their beloved hockey team, leaving the league no choice but to move to a friendlier city with a better arena.

Of course, this is merely all speculation. Seattle’s expansion bid could fall through. The league could decide that 32 franchises are quite enough. Maybe Quebec City will suffer the same fate as Hamilton, which built a big shiny arena over 30 years ago in the vain hope of attracting an NHL team. The Hurricanes could stay put in Raleigh, the Islanders could get their new home in Belmont Park, the Coyotes could get new digs in Phoenix and the Flames and the city of Calgary could eventually hammer out an arena deal.

Still, given the promise of the Vegas Golden Knights, the prospect of a successful franchise in the Pacific Northwest and the ongoing uncertainty facing several existing clubs in their current markets, the effects of a successful expansion bid in Seattle could be felt throughout the NHL over the next decade.

 








20 Comments

  1. This is going to sound strange coming from a Ranger fan… I think it would be terrible if The Islanders end up outside of NY.

    This team needs to stay and rebrand the franchise. Westchester , The Bronx, Brooklyn and obviously Manhattan should be non starters. This is all Ranger land.

    Queens or Staten Island make the most sense. And Staten Island or back to L.I make sense if they choose to not rebrand and keep the “Islander ” name

    • As someone who grew up in Edmonton (24 years) I would stop watching hockey altogether if they moved the flames and that was the justification. And I’m a pens fan (grew up loving Lemieux

      • you’d be in the minority… canadians love for their national past time makes them prime relocation candidates as canadians will still pay to watch teams on tv while the game grows in america. this is from the business standpoint. no city should ever lose their team… it sucks.

      • If I had a dollar for every time some sports fan said “I’ll never watch another game again if …” I’d be a millionaire. And another dollar for every one that soon began watching again, I’d be a multi-millionaire.

      • While sure many people can’t keep their word, what I say is true. While only one person I won’t help support such a greedy enterprise. Maybe if most weren’t such fanatics.

    • Traffic by Belmont currently is a DISASTER. I cannot imagine how much worse it would be IF the Islanders have an arena there. The Nassau Vets Coliseum traffic was a mess and that has more roadway.

      Curious why they are not thinking mass transit access currently. There has to be a better option than all the way west in Belmont.

  2. expansion to Seattle would be great but stop after that relocate the obviously failing teams and over time you have a competitive league full stands full owner pockets entertaining hockey more often for the fans not rocket science …..bettman

  3. This whole expansion plan has played out just like I assumed it would for the most part & I started discussing & raising years ago when not even on anyone’s radar nor anyone willing to discuss here. Round 2 is also playing out on the obvious schedule, although I would have given Quebec city an expansion team.

    Calgary, Arizona & NYI aren’t moving unless all options in those markets are exhausted. Calgary & the Flames will eventually find an accommodation we will just have to listen to all this BS until its a done deal. NYI & Arz will get their new buildings, expansion revenue has bought these have not teams years & the last 2 CBA’s have seriously stemmed loses & the next 1 will improve them even further.

    Nor apparently is Carolina moving following the 2023-24 season as I assumed they would. Ken Campbell just reported this purchase agreement carries a clause that the team can’t be moved or even an application made to move them for 7 years!

    The reason the NHL is adamant about retaining specific markets is all business, demographics & creating a foot print to allow for a proper US national TV contract which is up in 4 years.

    If Florida & Carolina can’t improve significantly at the gate & with corporate involvement both will eventually be relocated. Houston, Kansas City & Quebec all being possible destinations.

    MLB has 30 teams, the NFL 32 & the NBA 30. Only the NBA has a Canadian dynamic with 1 team. Will the NHL expand any time soon past 32 teams? Maybe but scheduling a proper interlocking schedule for so many teams becomes problematic. That said with only 25 US markets covered off as 7 Canadian teams exist, perhaps 34 will be the # eventually. Timeline? Not until after the next lock out by which point it will be counted in HRR & solutions to all other markets are resolved. I’d say at least a decade out but when negotiations commence on a new US National TV deal that may significantly factor into what ever the timeline may be.

  4. Lyle, explain to me why the NHLPA should have a say in, or any claim on the revenue that league expansion generates.
    I don’t understand your comments above…

    • Hockey-related revenue is split 50-50 between the league and the players.

      • Technically, expansion fees aren’t revenue; they’re sale of a capital asset. If a company issues new stock and sells it to the public, the price of the stock is not counted towards the company’s sales.

        You can be sure the NHLPA knows this and wants no part of that game. After all, if the players got a cut of expansion money, just think what will happen if the league ever contracts. The owner who loses a franchise will have to be compensated by the league, and I can’t imagine the players reaching into their pockets to pay 50 percent of that!

      • You can be sure the NHLPA is kicking itself that it didn’t push for expansion fees to be considered part of HRR. They’d love to have those counted toward their share. Rest assured they have no concern about the league contracting.

  5. Everything is hockey related. When the players sign a deal to sell a brand, do they have to split that with the owners? The owners are diluting the value of their franchises with the addition of another, it is just compensation for the perceived loss of value…

    • As per the current CBA, expansion fees are not considered hockey-related revenue. The players don’t get a penny of it. The fees go directly to the owners who pocket it for themselves.

      • Oh, and the value of NHL franchises isn’t diluted by expansion. According to recent reports, the value of the average NHL franchise rose 15 percent to $594 million following the addition of the Vegas Golden Knights.

      • Wonder if there is a push by the league to expand under the current CBA knowing that the expansion fees will be debated at the next CBA talks. Can’t help but think that if the expansion fee sharing is altered under the next CBA then there will be a lot less expansion talk and more relocation talk.

  6. The NHL pretends that they put Quebec City in “suspension” because of the Canadian dollar and the problem of balancing conferences but the real reason is the ownership factor. The NHL will never accept Pierre Karl Peladeau, the owner of Quebecor because he supports the separatist political party, Parti Quebecois, made inappropriate public racist comments about Geoff Molson, the owner of the Montreal Canadiens, remarks that offended not only Molson, but probably many other NHL Board members and Commissioner Gary Bettman too, and because he is generally untrustworthy. At the recent Centennial meetings in Montreal, Molson was seen publicly with Bettman many times, but Peladeau as usual was nowhere in sight. If Peladeau were completely out of the picture and a suitable owner found, Quebec would have its team back tomorrow.

  7. I never thought Wuebec city was a prime expansion site die to the cost of expansion. A 600 million dollar expansion fee. 650 now, wil be 700 -800 milli9n canadian. 3 quarters of a billion dollats for what will be consideted a small matket team is not going to happen.

    I f7lly suspect a team will relocate to quebec wirh a much smaller relocation fee.

  8. Hey Lyle. Bot sure yoi check back on articles but do you think Melnyk could move the Sens he claims they are not for sale….he to like calgary is looking for a new arena

    • Anything’s possible but I think Melnyk’s posturing. The Sens are angling for a new arena in downtown Ottawa (likely Lebreton Flats). I also think he’s trying to scare up more support for his club. You know, “buy more tickets or we might have to move.” That sort of thing.