The business structure of the NHL has one unique characteristic that sets it aside from any other entity on the planet: it has the dubious distinction of being the world's longest-running and most successful ponzi scheme. To keep the ponzi balloon up in the air, NHL executives have become supremely skilled at rooting out and ensnaring very rich people who are convinced they need to shovel money into a professional sports franchise to massage their egos. However, every so often the grifters at Avenue of the Americas have to change things up a bit. So about every fifteen years or so, news starts to seep out of the great 15th floor Manhattan office that an expansion is in the works.
Oh, the denials are thick and heavy as the news breaks, but the NHL - like all ponzi schemes - requires one essential ingredient to keep the whole thing afloat: new money. In the interim years between expansions the league executives cycle through owners of troubled franchises, convince municipalities to build Springfield Monorails, and even relocate to keep the money flowing through the system, but eventually it all starts to wear a little thin. TV executives begin to ask uncomfortable questions about the financial health of some clubs and one move too many could start to devalue franchises across the board. This all makes selling the dream to potential billionaire owners somewhat difficult. So when the tipping point is reached and people start to wonder about the long-term viability of the NHL, a great round of expansion is proclaimed, new money rushes into the system and the distraction silences the uncomfortable questions.
At the end of the day, billionaire suckers line up and beg the NHL to take their money. It's an investment where nobody expects to get a return on their money and it's quite simply the best long con anyone has ever devised.
Last week an article by the Vancouver Province's esteemed Canucks beat hack Tony Gallagher signaled the next round of a new money infusion. Expansion to Las Vegas was a done deal! And Seattle wasn't far behind! Oh and to bolster the legitimacy of the whole thing actual hockey markets Quebec City and Toronto may get a shot as well. So almost 14 years after the end of the last great expansion, the NHL has come back to the well.
Since the cat's now out of the bag despite the weak protests to the contrary from the commissioners office, lets take a look at the new candidates for expansion
Seattle is the next Phoenix, and I don't mean that in a kind way as Phoenix loses and will continue to lose a minimum of 35 million dollars a year until its primary benefactor, the city of Glendale goes bankrupt. On paper Seattle has a lot going for it with a metro population of about 3.5 million people and a healthy community of corporate head offices. However, Seattle is also an over-served sports market with representation from almost every major sports league in North America. MLB, NFL, MLS, NCAA div 1 football, and if rumours are correct, soon the NBA. All will be competing for sports dollars in Seattle, so where does the NHL fit in to that puzzle? Most likely on the fringe hoping for spillover from Vancouver.
It should also be noted that unlike the situation in Glendale (Phoenix), the local city fathers in Seattle seem to have little to no interest in building an arena exclusively for the NHL and are lukewarm at best to the idea of building a facility that could house both the NHL and NBA.
Seattle also lacks a hockey community. The WHL has tried for years to attract attention to junior hockey in Seattle with tepid results. Even with natural rivalries from Portland and Vancouver, hockey in the emerald city has never taken hold even on the fringes. Go into a sports bar in Seattle and ask who Sidney Crosby is and I guarantee you'll get a lot of blank stares.
With stiff competition, little to no interest in hockey, and a municipal government indifferent at best to the idea of hockey, Seattle seems like it would be just another weak club that serves no purpose other than to reap expansion fees and appease TV partners. So of course it's high on the expansion list.
Somewhere in the desert there's a road that leads to bush league status and at the end of that road lies Las Vegas. There's a reason why major sports leagues have all avoided Vegas like the plague and that's optics. Of course when you're running a ponzi scheme optics are huge and in the past the NHL has also shunned sin city as it didn't want to be seen as courting "Low Money" , but in the words of Nicky Santoro sometimes you gotta do what you gotta do.
The NHL wants an infusion of cash into the ponzi coffers and Vegas has cash. A lot of cash. Las Vegas is nothing if not the biggest side show on earth and the casinos are no doubt lined up to throw suitcases full of money into yet another sideshow: ice hockey on the strip. However, if you want to legitimately call yourself major league, you might not want the notoriety that comes with being the "Cirque de Soleil" of pro sports.
I would continue to avoid Las Vegas. As fun as the idea may sound, franchise valuations and the league credibility would eventually suffer, which would most likely hurt any future TV deal within the US. I should also mention that the ECHL has continually tried to make Las Vegas work with mixed results, leading to the assumption that the hockey community within Las Vegas is again fringe at best.
Las Vegas has the advantage of having no real competition for sports dollars, but with weak interest in hockey, and the undeniable freak show stigma that would come with a club in Las Vegas, the NHL again appears to be chasing the quick money at the expense of sustainability.
This is obviously a no-brainer. You could probably even put three franchises in the GTA and make money. These fans have suffered with the Leafs for decades and continue to rabidly support hockey. There is a ton of pent up demand and If done right a second franchise in the GTA could quickly become the second or third most valuable club in the NHL.
The problem with Toronto isn't necessarily economics as much as it is politics. The Toronto Maple Leafs are the most valuable franchise in the NHL and as a result they wield an enormous amount of influence within the the league. In the past MLSE has viciously defended it's fiefdom, even going as far as trying to block expansion into Buffalo a couple of money grabs ago. This time around though, a critical mass seems to have built up around the idea of putting another team into the GTA and it looks as though even the great MLSE won't be able to stop it.
It's a winning lottery ticket to whomever gets the opportunity, and that just may be the story. With expansion into the GTA, who's going to step up to the plate and put forward the ridiculous expansion fee the NHL will most likely ask for? Who's going to build the state of the art facility to house the glimmering new franchise at the center of the universe? There will undoubtedly be no limit of suitors, the only question is who will win, and where will they put the new club.
The NHL is cashing in a very blue chip, which should satisfy a lot of needs both financially and politically going forward. Lets just hope they pick the right captain for their new flagship
When it comes to Quebec City I have what the propeller heads at AIH would call a bias. They were, as Winnipeg was, a WHA team that made good in the NHL only to be ripped away from loyal fans and sent to the US. The criminal Marcel Abut basically midnight moved the Quebec Nordiques, took a big, fat, no-show consulting gig with the new club and proceeded to watch them win a Stanley cup with stars that should've been Quebec-bound.
Fast forward nineteen years and the huge Quebec media conglomerate Quebecor stands ready with a blank cheque made out to the NHL for a pro hockey team. The government of Quebec has even graciously funded the construction of a new state of the art facility ready to open in 2015. Quebecor is already a media partner with the NHL through TVA and would organically be able to promote the Nordiques in La Belle Provence.
This should be another no-brainer; there's a new building, deep-pocketed ownership with integrated media outlets and most importantly in my mind an enthusiastic fan base ready to fill seats and pick up where the old Nordiques left off. There's no way that the NHL will be able to resist extorting Quebecor for a juicy expansion fee, and for the second time in recent history a wrong will be righted.
Now I know what you're thinking, Gallagher didn't mention anything about Portland. Well, of course you're right, but just to show that I'm not completely jingoistic, I thought I'd present what I would consider a viable alternative for expansion into the US. Metro Portland has a population of approximately 2.5 million people, admittedly less than Seattle but about on par with Vancouver.
There are, however, a few factors that make Portland attractive in my mind. First it's an under-served sports town. Only the NBA and MLS contend for the local sports dollar. Second Paul Allen, wealthy (Microsoft founder and) owner of the Trailblazers has repeatedly expressed interest in bringing an NHL team to Portland and integrating it with the Trailblazers organization. Third, Portland actually has a thriving hockey community (shocking!), supporting a WHL club with numbers that rival Canadian cities.
Portland has the owner, the building ,and the hockey community to make an NHL franchise work, along with natural rivalries up and down the west coast. But of course poor Portland isn't quite sexy enough to capture the imagination of the average sports hack, and the league seems uninterested in Paul Allen's money for whatever reason (maybe Gary's a Mac person?). Sorry, Portland, maybe you'll be a landing pad for the Panthers when they fold.
A Crazy Idea
Now, my philosophy is pretty simple when it comes to the legitimacy of a location for expansion: I would prefer to see the NHL put franchises where people actually want to watch hockey. I get the fact that an expansion city should be a certain size and that you need healthy corporate support, etc, but in my old-fashioned way I think it should still start with the fans. If we want to grow the game let's do that from the ground up, and not the top down. Let's get kids in North America playing hockey. Let's convince the minor league teams to break ground for the big clubs. Let's make investments in minor hockey and ice facilities in non traditional markets. Let's make people actually want to watch hockey and reward the markets that do.
Let's sell the spectacle of a full 20,000 seat arena going absolutely full tilt crazy rather than trying to hide half empty buildings and fudging attendance figures. In other words, let's create a sustainable model that doesn't rely on constant expansion, relocation and general skulduggery to keep its place at the big boy sports league table.
Why can't we just go legit?
Unfortunately, the long con is still what propels the business of pro hockey forward, which means we'll be watching hockey on the strip, a half empty building in Seattle, a blue money blizzard in southern Ontario, and the fleur de lis streaking down the ice in Quebec.
It seems in this round of expansion, not unlike the others, the NHL is only getting it half right. However, in terms of building a strong sustainable business model, it's probably getting it all wrong.