Seattle arena finally finalized, NHL team could be next, and nobody had to get screwed to make it happen

The Seattle city council finally cast its final vote to approve the privately funded reconstruction of KeyArena yesterday — notwithstanding that it had already voted to approve the plan last December — which means we can all rejoice in an arena deal that doesn’t suck too badly, thanks to a combination of citizen activism and relatively forward-thinking elected officials. (Those are the city officials; county officials are still wackadoodle, as the recent Mariners lease extension made clear.)

And it also means that now we can freely speculate about an NHL expansion team in Seattle, since part of the deal is that renovations won’t start until a franchise is in place:

Local investors will present to the NHL’s executive committee on October 2. Then, the full NHL Board of Governors will vote in December on whether to approve an expansion franchise for Seattle for the 2020-2021 season. A Seattle NHL team would be owned by billionaire David Bonderman, movie producer Jerry Bruckheimer and a handful of local owners.

Sports leagues are in a weird place right now with regard to expansion, with some looking to cash as many expansion fee checks as possible (MLS), while others are sitting on their hands and figuring that a one-time windfall isn’t worth the tradeoff of having to share the revenue pie with more owners (the NBA and NFL, pretty much). Baseball has been kicking the tires on expansion without making much of a commitment — my gut sense is that they’ll only do so if bowled over by expansion fees of around $1 billion per team, which may not be feasible for the size of the cities involved, something that I told Matthew Kory of the Athletic for this article (paywalled), though Twitter somehow turned it into me hating Montreal.

The NHL has been somewhere in between MLS and MLB, eager to expand if someone wants to throw money at them, but not so eager as to approve more than one team at a time. Seattle seems like as sure a bet for the league as possible — moderately big media market, more of an existing hockey fan base than some of the cities from Gary Bettman’s famed Sunbelt Strategy that didn’t work out so well — so if Bruckheimer and friends are willing to pay $650 million for a team in league where only 10 out of 31 existing teams are worth that much, hell yeah, grab the cash.

The calculus of expansion really comes down to whether you think the future revenues you’re giving up (by slicing the pie into smaller pieces) are worth more or less than the expansion fee check, and that’s going to vary based on everything from what you expect the future holds in terms of league revenues (is the cable bubble bursting yet?) to how your league’s revenue-sharing determines the size of your existing slice. None of which has much to do with whether a city “deserves” a team, whether in terms of Nielsen demographics or of how rabid their fan base is, so it’s nice when they all line up and a city like Seattle lands a team that should fit in well with existing NHL cities. And not having to put in public arena subsidies is the cherry on the top. Wow, I really have nothing overly cynical or pessimistic to say about this news item — mark this day down, because you shan’t see its like again.

Yeah, it looks like Seattle is getting an NHL expansion team ASAP

Looks like Seattle is being fast-tracked to get an NHL expansion team now that it’s getting a renovated arena:

A Seattle ownership group has been authorized to file an application for an NHL expansion team that would begin play in the 2020-21 season, NHL Commissioner Gary Bettman said Thursday.

The cost of the team would be $650 million, and Commissioner Bettman said the NHL is looking at only Seattle for possible expansion…

“That doesn’t mean we have granted an expansion team,” Commissioner Bettman said following the Board of Governors meeting. “We have agreed as a league to take and consider an expansion application and to let them run in the next few months a season ticket drive.”

So basically, “show up with a $650 million check and some season-ticket pledges, and you’re in.” If anyone thinks that the Seattle ownership group — which includes both former Philip Anschutz lieutenant Tim Leiweke and Hollywood mogul Jerry Bruckheimer — can’t muster that, please raise your hand.

The only surprise here is that the NHL didn’t wait to use Seattle as leverage to get arenas for all the teams seeking them — hell, Calgary was already getting ready to freak out that this might cost them the Flames if they didn’t build a new arena, but now that’s off the table. Presumably the lure of $650 million in quick cash — up from the $500 million that the Las Vegas Golden Knights owners paid just last year, NHL deputy commissioner Bill Daly explained, because of market size differences (sure, okay) and “inflation” (um, in one year, seriously?) — outweighed the benefits of having a great move threat, especially when there’s always Houston for that.

Is an NHL franchise in Seattle really worth $650 million? The average team value, according to Forbes, is $594 million, though the magazine has a tendency to underestimate sale prices (though that could also just be a sign that team owners have a tendency to overpay for teams). That means Bruckheimer & Co. could presumably pick up a low-value franchise for a lot less than that and move it to Seattle, but by signaling that it’s expansion or nothing, the league cuts off that option and means the Seattle group has to meet its asking price if it wants an anchor sports tenant for its new arena.

Really, the only surprise here is that the NHL didn’t ask for $1 billion, because why not? Unless you think that sports league operators have any shame, which, nah, can’t be that.