After years of speculation and a fierce grassroots push by Bill Foley and the Maloof brothers, Las Vegas is closer than ever to being awarded a National Hockey League expansion franchise. Better yet, because of a woeful lack of competition in the bidding process, the team franchise – if granted – will surely come on more favorable terms than might otherwise be expected.
In its push to add two more teams to its current 30, the NHL received requests for expansion applications from 16 different potential suitors in early July. The NFL’s hope was that it would receive formal bids from enough western cities to even out its unbalanced conferences – the Eastern Conference has two more teams than the West – while expanding its presence into major markets where it has been absent or underrepresented.
The crown jewels were widely held to be Seattle, which fits both criteria and also lost its NBA franchise several years ago, and Toronto – which already has the Maple Leafs but is a large enough city to warrant a second franchise, as with New York and Los Angeles.
Instead, the NHL received expansion proposals from just Las Vegas and Quebec – neither of which fit the golden goose criteria the league was hoping for. If admitted into the league, the two cities will be among its smallest media markets. Further, Quebec would be the league’s easternmost team aside from Boston, so the conference imbalance issue would remain unsolved.
It appears that the required $10 million deposit and a short timeframe – the teams are to begin playing in 2017-18 – dampened interest among most potential suitors. Unlike the other cities rumored to be favored, which included Portland, Milwaukee, Houston, and Kansas City, both Las Vegas and Quebec have brand new arenas either fully built or under construction, and would therefore be logistically able to field a team in two years’ time.
While the expansion process is not going the way the NHL would have hoped, the end result is great for Las Vegas – as long as one is comfortable dismissing criticism from Nate Silver and others that the city would flounder as a pro hockey market.
Securing multiple bids would have allowed the NHL to substantially drive up the asking price for each franchise, a price that a smaller market city like Vegas would have a harder time matching. But because only two cities submitted proposals for just two potential new teams, the tactic frequently employed by the NHL (and every other sports league) of extracting concessions from host cities by threatening to leave or (in this case) denying them a team altogether is largely moot.
So the NHL expansion process has been a failure on three fronts – it won’t even out the lopsided conference alignment, it won’t expand the league’s presence in major media markets, and it won’t provide the league the leverage needed to squeeze every nickel out of the cities hoping to acquire the new franchises.
Of course, just because Quebec and Vegas were the only cities to submit proposals does not mean they are a shoe-in to be awarded teams. There are major red flags associated with both that will prompt league officials to do their do a lot of thinking.
The NHL’s massive relocation of teams away from the hockey-friendly northeastern states and Canada to the Sun Belt two decades ago can hardly be described as a success. Combined, the Florida Panthers, Carolina Hurricanes, Arizona Coyotes, Tampa Bay Lighting, and Nashville Predators franchises have a valuation ($1.1 billion) that is roughly equaled, or exceeded, by many of the legacy franchises in more hockey-friendly jurisdictions. The Montreal Canadiens are worth $1 billion, the New York Rangers $1.1 billion, and the Toronto Maple Leafs $1.3 billion (all figures from Forbes). Another data point: the Atlanta Thrashers moved to Winnipeg in 2011 after failing miserably in Atlanta, where they opened in the mid-1990s.
Las Vegas is a much smaller market than any of the five aforementioned Sun Belt cities, whose teams lost a combined $44.4 million last year, so the question of why Vegas would fare any better is one that needs to be better addressed. It can be argued that because the city currently has no major sports league team, largely out of fear of being associated with gambling, the first team to enter the market could be a windfall success.
As of Quebec, it had a run-of-the-mill NHL team from 1979-1995, which relocated to become the Colorado Avalanche. It’s also a small city of just 500,000 people, and the question again has to be asked: what will be different this time around? The point is that there’s a very real possibility that the NHL may hold off expansion this time, to try again in a couple of years, when it might reel in some of the bigger fish.
But in Las Vegas, Bill Foley, the Maloofs, and the 13,000 fans who have signed up for the season ticket drive could not have asked for a better outcome.
