Category: NHL expansion

NHL reportedly rejects Quebec expansion bid because Canadian oil is too cheap

access_time personNeil deMause

When the NHL indicated last summer that it could be interested in expanding by two teams in exchange for half-billion-dollar expansion fees, and then only two cities, Quebec and Las Vegas, bothered to submit bids, everybody figured that Quebec and Las Vegas would be getting NHL expansion teams soon. As it turns out, everybody figured wrong:

Former player Georges Laraque told a Montreal radio station yesterday that the NHLPA has been informed that Quebec City is no longer under consideration for a new team, at least not in this round of expansion.

The problem is apparently the weak loonie — no, not that one, but rather the crashing Canadian dollar, which currently sits at 75 cents thanks to low oil prices (Canada produces a lot of oil by digging up all of Alberta and running it through a sieve). So despite a relatively strong fan base, an ownership group led by the former prime minister, and a new arena with around $300 million in public subsidies, the NHL has apparently decided that Quebec will need to wait on the sidelines until it can confirm that it will generate more than Monopoly money for league coffers. (“Apparently” because the NHL has denied it, but only with a “no final decisions have been reached” no-comment denial.)

So what does that mean for Las Vegas, which initially sounded like the even-crazier expansion idea? Will the NHL really go ahead with adding just one team, in a market that would be the league’s smallest and most desert-surrounded? The NHL has refused to issue any timetables for expansion, so who knows? It’s entirely possible that the league could just go back to the drawing board and issue a new call for expansion bids — after all, if you’re going to get a bidding war going, you really want more than two cities going after two slots. You can smell the excitement in Seattle already!

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NHL to take expansion bids from Vegas, Quebec, Seattle, etc. because MONEYYYYYY

access_time personNeil deMause

The NHL is taking bids on expansion franchises starting July 6, which doesn’t necessarily mean it’s going to expand, but does mean it’s testing the waters. And given the price tag, it’s easy to see why:

https://twitter.com/TravisSBN/status/613809224594763776

That’s kind of aggressive, considering that Forbes estimates the average NHL team to be worth $490 million, and given the markets we’d be talking about here (more on that in a minute), these teams would be below average. But then, the magazine’s team value figures always seem to lag a bit behind actual sale prices — as Forbes notes, there’s a bit of a bubble thanks to the fact that “Wall Street guys like Joshua Harris (New Jersey Devils) and Andrew Barroway (trying to buy a controlling interest in the Arizona Coyotes) are willing to pay a lot of money for hockey teams that lose money.” (It also doesn’t hurt that they can get huge tax breaks on their purchase price.)

The next question, obviously, is where, and everybody from Deadspin to the New York Times is assuming that one of the cities will be Las Vegas. This seems pretty daft from here — Las Vegas would be the second-smallest NHL TV market (ahead of only Buffalo), it’s in the middle of the Sun Belt where hockey franchises go to die, and it has a relatively poor permanent population. (A proposed Vegas team has managed to get $150 deposits on 11,500 season tickets, though those are refundable if there’s no team starting in 2016.) But it does have a new arena going up, and those things are guaranteed gold mines, right?

If Vegas were one team, the other would likely be either Quebec (where telecom giant Quebecor is almost certain to throw its hat in the ring) or Seattle (which has interest but still no solid NHL arena plan). Quebec would actually be the smallest media market in the NHL (smaller than Flint, Michigan!), but it’s in Canada, so maybe that compensates? Also, new arena!

If nothing else, all this means that Glendale should probably feel relatively secure in playing hardball with the Coyotes owners over their lease, since the NHL is unlikely to encourage the team to move to a new city if that would jeopardize a half-billion dollars in expansion fees. And with that, let’s go look as some photos of the under-construction Las Vegas arena:

Yeah, that, um, looks like an arena. With two levels of luxury suites, which I guess is standard these days, but makes for just awful views from the top deck. But hey, not like anyone’s likely to be sitting up there anyway, amirite?

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