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Dolla Dolla Bills
Y'all!
Making it rain, NHL style
Earlier this week the official deadline for
expansion team bids passed, and now we know that there are only two new markets
currently seeking entry into the National Hockey League: Las Vegas and Quebec
City. Both of them seem to be a lock, with the only real question being 'when
do they get in?' If you judge it solely by traction, then the logical step
would be to have them both join in time for the 2016-2017 season, as the
process of building their respective front offices, naming the team, releasing
uniforms, etc. would definitely keep fans interested. If that is the league's
plan, hopefully they announce it soon as putting together a franchise isn't
something that can be done overnight.
While there are many intriguing
angles to be considered when considering expansion, this past round of bids
brings one large question to the forefront of my mind: why wasn't there more
interest? Surely there aren't only 2 centers in the entire continent interested
in joining the NHL; especially after Seattle and Markham (Ontario) were both
linked to rumours about a franchise in the last 2 years. That doesn't even take
into account Kansas City, Houston, and the diehards in Hartford that have been
campaigning for the return of the Whalers from the moment they left in 1997.
So then, why only 2 bids?
The obvious answer lies in the
amount of money that Commissioner Gary Bettman hinted would be needed to join
the league - namely upwards of $500 million. That's a large chunk of change,
and we know for a fact that it was the deciding factor in keeping
Markham/Toronto 2 out of the process as between the cost of the franchise and
building an arena the price tag would become nearly 1 billion dollars.
Let that sink in for a moment.
One billion dollars to join the NHL. A
league that isn't even on ESPN, frequently is low on the Sportscenter highlight
loop, and rarely receives front page print coverage.
It would be easy
to say Bettman and NHL brass are the ones to blame, but let's not forget that
they are only charging what they think they can get. There has to be someone
with a business degree looking at this and deciding that $500 million is a
reasonable price for an expansion team - so it's not a case of ignorance. For
these same reasons I don't think this is a case of hubris either, as you can
accuse Gary Bettman of many things, but being a cocky fool isn't one of them.
So what does that leave us with?
The only thing left is that
this was a deliberate ploy by the league.
By valuing expansion clubs so highly it gives the
impression that established clubs are worth considerably more; even when it is
clear that isn't the case. This adds value to current owners, and makes it
harder for any of them to sell their clubs as the asking price will be
correspondingly higher than what they might actually be worth (see Arizona).
I'm also firmly convinced that the $500 million price was decided upon after
careful conversations with both Quebecor and Bill Foley (Las Vegas) to maximize
the amount of money these groups would be willing to pay. After all, why not
take as much as they are willing to give? The upshot of this is that 1 billion
dollars will be split among the existing teams, which will make the owners
exceedingly happy; and perhaps help prop up some cash strapped clubs (see
Arizona).
The unfortunate part in all of this is that by chasing the
money the NHL might be creating problems for itself in the future. While no one
knows how strong a franchise will be in Quebec City or Las Vegas, what we do
know is that there are other markets that are thirsting for the game. The sad
truth is that for those centers it appears they can't afford to join the club,
as the membership fees might outweigh the potential benefits. However, there is
a back path, and that is by poaching an existing club that is suffering from
financial hardships, with owners who are looking to cash out while they still
can. (See Arizona and Carolina).
By leaving these potential suitors
behind, the NHL has reduced their respective options, meaning that they will be
less likely to play nice as they know they won't ever get in the front door. If
the league thought that Jim Balsille was a headache, I wonder what kind of
trauma 3 or 4 such individuals could inflict? Desperate people do desperate
things, and the lure of professional hockey isn't going to vanish in these
locales anytime soon.
In this way, maybe the NHL should realize it
isn't all about the money.
Contact Ryan at at
ryanhall@letsgosharks.com
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