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NHL Expansion Update

NHL Expansion Update
Two teams will be added... but when?

Over the past year there has been significant buzz that the National Hockey League will add two teams to its 30 member roster. There are several reasons why this is happening now. Hockey has become a red hot commodity in the United States, with a new network contract and teams in many markets playing to near capacity. Up in Canada, the news gets even better, with a huge TV contract via Rogers and TSN fueling higher revenues for each team, and of course, higher salary floors and caps.

The last time the NHL added teams was back in 2000, when the Columbus Blue Jackets and the Minnesota Wild entered the league.

Right from the get go, the two front runners to land expansion franchises are Quebec City and Las Vegas, the two cities that have made formal applications to join the league.

Quebec City has twice been an NHL city. The Quebec Bulldogs played in the league’s early days, from 1878 to 1920. The Quebec Nordiques came over from the now defunct World Hockey Association in 1979, and lasted until 1995, when they were moved to Colorado. The Nordiques built a huge rivalry with the Sabres in the 1980s, remembered best for back to back best of 5 playoff series played between the two teams in 1983 and 1984.

Despite the small size of the market, Quebec City’s hopes ride on the shoulders of their corporate owner, Quebecor, which is making the formal application bid. This past fall, their glitzy new arena, named the Videotron Centre, made its debut right across the parking lot from the hallowed Le Colisee. In September, the Montreal Canadiens and Pittsburgh Penguins played an exhibition game before a packed house, and the venue is now the home of the junior league Quebec Remparts. At a cost of over $400-million, the 18,200 seat arena would immediately rocket to the top of the NHL rankings in terms of modern amenities and cutting edge technology.

The bid from Las Vegas is far more intriguing. Prospective owner Bill Foley has already secured deposits for over 13,000 tickets, with the new team set to play in a new arena under construction near the famed Las Vegas strip. NHL Commissioner Gary Bettman makes no illusions about his interest in sin city. Bettman has consistently shown his drive to place hockey in non traditional markets, with mixed results. A successful franchise in Las Vegas would represent the first franchise in the four major sports within the state of Nevada.

There are other cities in the fray. Seattle, a former NHL city from the early days, is often mentioned as a potential expansion or relocation city. The latest attempt to build a suitable arena comes from a prospective ownership group seeking zoning interpretations in the suburb of Tukwila for a new hockey venue.

Kansas City and its downtown Sprint Center would make a perfect home for an NHL team, a facility which has no permanent sports tenant. Potential owners there have derided the prohibitively high expansion fee, and have not submitted any formal bid. Same with Houston, which has a tightly worded lease with the owner of the NBA Houston Rockets, that allows only he to field an NHL team in that facility. Despite the league’s interest in the Houston market, no ownership group has come forward.

Back in Canada, repeated interest in an NHL team has come from markets not far from Buffalo, where businessman Jim Balsillie has made three attempts to bring a franchise to Hamilton or to the Kitchener/Waterloo area. Either market would require indemnification to the Buffalo Sabres and the Toronto Maple Leafs, teams that rely on season ticket sales and support from these cities.

Same from Markham, Ontario, a suburb northeast of Toronto, which unveiled plans three years ago for a 20,000 seat NHL-ready arena. No dirt has been turned and those arena plans appear to be in limbo. There was no formal application made from any interests in southern Ontario. Nonetheless, speculation remains ever present.

Add to the mix that several franchises are candidates for relocation. The Arizona Coyotes continue to be a basket case, and even talked about returning to their former home in downtown Phoenix, before signing a new agreement to play in Glendale for the next two seasons. In Carolina, there are rumblings that owner Peter Karmanos might sell the team to interests which would relocate the team, possibly back to Hartford, or to Quebec City. The Florida Panthers seem safe for now, where they signed a new lease to continue playing in Sunrise, Florida in front of oceans of empty seats. And the New York Islanders are now at the Barclays Center in Brooklyn, a dreadful venue for hockey with terrible sightlines. They too are getting little traction in terms of robust fan support.

One thing is for sure—by 2017-2018 the league could look much different, with two 16 team conferences, expansion in the AHL and ECHL to accommodate minor league prospects playing for their major league clubs, a fresh $1-billion in revenue from the expansion fees coming in from the new entrants. And as for an expansion draft? General Managers will be salivating on the very notion of dumping costly contracts on their expansion draft lists. Stay tuned.

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