Vegas, Quebec now frontrunners for NHL expansion teams, because nobody else bothered to bid

Official bids to own an NHL expansion franchise (assuming the NHL actually expands) were due yesterday, and of the several motley candidates, only two ended up submitting an actual bid, along with a $2 million non-refundable deposit: The Bill Foley/Maloof brothers group in Las Vegas, and Canadian telecom company Quebecor in Quebec City.

If the neo-Quebec Nordiques and Las Vegas Black Knights (that’s seriously what they’re considering calling the team — one can only hope their team motto will be “Tis but a flesh wound!“) happen, it will be because the NHL thinks it can get $500 million apiece in expansion fees, which would be worth the roughly $20 million a year in TV revenues the other teams would have to give up to each of the new franchises. Neither city would be a guaranteed success — Quebec probably has a better shot, if only because people actually watch hockey there, but they’d both be among the NHL’s smallest markets — but then, if there were an obvious expansion market, it would already have a team by now.

There was one bigger market considering a bid, or actually two bids: Seattle, where both Chris Hansen and Ray Bartoszek were reportedly interested in teams for their prospective arenas in downtown Seattle and suburban Tukwila. Neither ended up bidding, though, which would leave Seattle looking at being the home for a relocated team at some point, assuming either Hansen or Bartoszek is really that interested in the NHL.

And that, ultimately, is what the NHL would be giving up here, even more than a sliver of TV revenues: leverage. Right now, cities undergoing arena battles face a slew of marginally believable bogeymen where their team could be said to be relocating to if they don’t agree to demands. If Vegas and Quebec get new teams, the league would pretty much be down to Seattle as a threat, and while one city will certainly suffice for this (look at what the NFL has done with L.A.), it’s less than ideal.

All of which is to say that Glendale officials should probably feel comfortable taking a hard line with the Arizona Coyotes owners in their lease battle. There’s reportedly been some progress in those talks, but if the worst-case scenario ends up being that the Coyotes might move back to a new arena in Phoenix, leaving that city stuck with how to keep afloat a money-losing franchise with subsidies, that’s the kind of chance that Glendale should feel comfortable taking.

UPDATE: Deadspin thinks that this is going to hurt the NHL’s leverage in getting the highest price for expansion teams, since now they can’t get a bidding war going. I’m less sure — the league can still refuse to assign any new teams at all if it doesn’t get what it wants — but this certainly doesn’t help the NHL’s racket, let’s put it that way.


25 comments on “Vegas, Quebec now frontrunners for NHL expansion teams, because nobody else bothered to bid

  1. I’m coming back round to my thought that Glendale killing the Coyotes’ lease hurt the NHL’s leverage with these other cities…

  2. Because Seattle bidders can sit back now and say “Enh, we’ll take the Coyotes when they become available”?

  3. Oh man a Stanley Cup finals with the LA Kings vs the LV Black Knights.

    The Royal Rumble in the Rink. It writes itself.

  4. Superb black knight reference.

    I just can’t see the NHL leaving Phoenix. It’s too big a market and it will support hockey, especially if a new arena in Phoenix or Scottsdale happens. This isn’t Atlanta.

    The NHL/Seattle thing reminds me of ACC Basketball & Barclays Center in Brooklyn. The ACC made this whole production of requesting bids for their 2016-2021 tournaments when everyone knew that they wanted to be in either MSG or Brooklyn. Both MSG and Brooklyn declined to bid, but the ACC ended up capitulating anyway and sent the tournament to Brooklyn. Much in the same way, I wouldn’t be shocked if some Seattle group ends up getting an expansion team without submitting a bid.

  5. It’s amazing now that the NHL has stepped its foot into the expansion pool that other leagues are exploring the same thing. MLB is considering expanding to Montreal and Charlotte, the NBA expanding to Vegas and Seattle (the Seattle thing is going to happen, it’s an embarrassment for a city with a strong fan and economic base and a top-tier market not to have a team), and of course the farce that is MLS. Screw the quality of play and the content, it’s all about the dollars. Heck, if anything contraction needs to occur, especially in the NHL. Columbus, Florida, and Arizona are certifiable dumpster fires, with Carolina and Tampa not too far behind. Of course contraction will never happen due to lost jobs for the players and lost revenue for the owners.

    In regards to hockey’s vitality in Arizona, the sport would have succeeded imo if the arena was built in Scottsdale in the early 2000s. Greed from the owner and developers and smart politicians in Scottsdale prevented the deal. Now the area is bustling with economic activity due to ASU developing a satellite campus there. Proof-positive that a city doesn’t need an arena to spur economic development.

  6. ^ To be fair, Tampa has had consistently solid support for the Lightning. It’s one of those markets that intuitively (geographically and climatically speaking) makes no sense for hockey, but it works anyway. Think Los Angeles, Anaheim, and San Jose.

    And no metro area that is centered around a single major city, and which has a basketball team AND hockey team, should be building separate arenas for each. They should share a facility, as basic logic dictates.

  7. Won’t someone think of the relatively young, underutilized Sprint Center arena ? Has that relocation threat been too overplayed in the past ?

  8. Maybe when KC didn’t warm to Charles Wang, the NHL decided to ban the city forever…

    In reality, it is unlikely that anyone wants to own a KC NHL team. It is hard to see a relatively small city with a very small suburban drawing area around it making a go of the NHL. KC works for baseball and football because both those leagues more than cover their expenses on TV money alone (or should). Not so with the NHL… it’s a gate driven league, despite the much publicized TV contracts (which combined amount to about $18m per team per year at today’s exchange rates)

  9. I covered K.C. in the Vice article linked above. In short: Small market, and AEG would rather book paying concerts than an NHL team that would want a sweetheart lease.

  10. It is possible that NHL hockey could succeed in Phoenix proper (or Scottsdale/Mesa etc).

    However, it has become fashionable to blame all the Coyotes problems on their decision to accept a ‘free’ arena from Glendale in 2001 (deal signing).

    The guy who moved the Jets to Phoenix in the first place (Richard Burke, as I recall) indicated he’d have lost less money keeping them in Winnipeg from 1996-2000. That may or may not actually have been true (sports owners are typically not averse to hyperbole), but the Jets were thought to have lost nearly $20m in their final year in Winnipeg (skewed a bit by the fact that their former owner, Shenkarow, had signed back end loaded player contracts because of a sweetheart deal he signed with the city in which they covered his losses if he continued to keep the team in Winnipeg…).

    Now, it is fair to note that the Coyotes first played in America West and that this building did not work well for hockey. That said, they were still losing money hand over fist with decent attendance at AWA… hence Burke’s decision to unload them (to Ellman, who began the dalliance with unfashionable Glendale, pop 260,000).

    I am unconvinced that they would succeed in downtown Phoenix or Scottsdale. They would undoubtedly do better than they are doing, assuming they could find a city willing to build them a free arena and maybe pay them to play in the free arena too. But their success would not be assured in the richer market IMO.

    People who point to Scottsdale/Mesa and Phoenix having “much more money” in play are correct. However, one of the main problems the Coyotes have is that virtually no-one watches them on television in ANY part of the Phoenix area. Not sure what this year’s numbers were like, but tv households tuning in to games a couple of years ago ranged from 7-15,000 on average. As one sportstalk wag put it, “more or less the same numbers that the test patten draws”.

    If you are selling a product no-one much seems to want, it doesn’t matter how big your potential marketplace is.

  11. Sorry Neil, went off to read the Vice piece you linked to.

    I’m not sure about a cooking reality show, but if the expansion process were done in full The Running Man style (that’s like Hunger Games for the youngsters or The 10th Victim for old people) I’d start watching. Heck, maybe even if it were a non-violent competition like Wipeout..

  12. I think the reality show angle has merit… but given the financial prospects of some of the lesser franchises, it might have the opposite effect to that desired.

    I could see an NHL ownership reality show quickly becoming “I’m a prospective NHL franchise owner, get me outta here”.

    In recent years one owner tried to declare bankruptcy, another tried to pay his partner $50m (I think) just to take his half of the team off his hands, and still others have left with nothing.

    Owning the Rangers, Red Wings or Flyers is great. Owning the Panthers, Predators, Blue Jackets, Coyotes, Hurricanes… even more mid pack markets like the Devils, Blues and Stars, not so much. As ever, the NHL is a regional success in the US and pretty much always will be.

  13. The rumour is apparently that the Seattle groups thought the US$500million price tag was a bluff and that they’d go lower. Which, given Bettman didn’t acknowledge a team was moving until about 1 month before the season, really makes me question their knowledge of the NHL.

  14. John Bladen, you’re probably right that the Coyotes would do a bit better in Phx or Scottsdale, with a(nother) free arena and some more subsidies. And we even have idiot politicians talking about doing just that. So, it looks like Glendale is not a cautionary tale at all – it’s more of a how-to manual.

  15. Maybe a little more water on the ‘relocation’ fire?

    www.theglobeandmail.com/sports/hockey/arizona-coyotes-city-of-glendale-reach-new-arena-deal/article25644317/

    Of course, if there is one thing we know about new from the NHL, it’s never believe anything until you see the fine print (if you ever see the fine print…)

  16. Quebecor can’t responsibly spend 500 million on a team. However, I’m sure the government will float them an interest-free loan or something even sweeter to make it work. I also am raising funds for a team. If someone contributes $1 for every dumb rumor or comment that is published here in Quebec about the Nordiques returning, I’ll soon have enough to purchase two expansion franchises.

    Btw, the new arena is pure white. It’s just missing an elephant logo.

  17. I think the NHL has done an outstanding job of squeezing out the maximum amount of dollars out of their opportunities. Here’s why:
    * The NHL set the expansion fee at $500 million and the application fee at $10 million (with $2 million nonrefundable) and they found two takers: deep-pocketed strong owners with new arenas about to open their doors and strong fan bases (Quebec for real, Las Vegas on paper). That’s $1 billion in fees from two parties — or $33 million in fees per team. Any sports writer who thinks the NHL is going to hand back that $500 million check from Quebecor because it would lead to a geographic imbalance in the divisions has simply been not paying attention to the NHL in the past 30 years.
    * The NHL got generated real interest and organization among a number of potential markets that could bid for a relocated team, should any of the existing teams hit a financial crisis (like the Arizona Coyotes now, perhaps the Florida Panthers later). It isn’t just Seattle that is the threat. It’s suburban Toronto and Kansas City as well, if not Milwaukee once their new arena is built. And don’t forget Paul Allen sits in Portland with his billions of dollars. To buy an expansion team the NHL said you needed to have a new arena. But to potentially be the new home city of a relocated team, you just need an ownership group, a fan base, and a deal with the city to build an arena. If Markham, Ontario knew it was going to get a team, they would fund the arena — Cobb County’s board members just sold their grandmothers to get the Braves.
    I detest NHL Commissioner Gary Bettman and think his sunbelt expansion strategy was recently proved to be stupid when Rogers offered a much more expensive national TV deal for 7 Canadian teams than what NBC Sports paid for a TV deal for 23 American teams. But I do think Bettman has figured out a very clever way to maximize the amount of money for the NHL from expanding by just two teams.

  18. “Al S” is also way off base. Quebecor is a multi-billion dollar media company, the premier french language media corporation in North America, and holder of the NHL’s french language rights. They have $500 million to spend. They join a list of other media companies that want to own sports teams (i.e. own the content that they transmit over their cable lines). Whether the spending is responsible is a matter for their shareholders. If “Al S” followed the news in Quebec (in which he alleges he lives) he would know the arena was built almost entirely with public money, split between the National (Quebec) Assembly and the City, with Stephen Harper kicking in $30 million from the federal government because, duh, Winter Olympics in Quebec someday. So the team was already heavily publicly subsidized via the arena — the pols gave at the office already. Given that I watched 9,000 people file into the old Colisee this past February to watch a hockey game played by 12 year olds, I think the Nordiques will do fine. I am going to re-up my subscription to NHL Game Center Live just to be able to watch the team when they hit the ice for the 2017-2018 season.

  19. I can hear it now in LV, “the puck is dropped, he shoots, he scores, and casinos go wild as to who was going to score the first goal”. Well, I guess that’s what pro sports has turned into for the most part these days.

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