Dreger: NHL expansion fee could be $2 billion

[hammer42]

But you just mentioned QC as a team.

Also, just looking at growth, you mentioned Hamilton hitting a million people. At the current rate of growth, Hamiliton will hit a million people sometime around 2060.

You just don't understand Hamilton had population of 306.000 just 25 years ago & do to Hamilton absorbing some of the smaller cities in early 2000's Hamilton's population doubling in to over 600.000 & reason Hamilton's current population boom is a mass migration of people moving from Toronto because it is cheaper to live in Hamilton & combine that with immigration how fast the city has grown it should hit a million by 2030 .

 

[hammer42]

I doubt Houston is ever going to bid for NHL. expansion unless they can get it for under a billion dollars because I doubt you you can find a Texas Billionaire willing to pony up over billion dollars that is why I think Houston is getting a relocated coyotes franchise on the cheap so as for next expansion teams are going to be Kansas City & 2nd southern Ontario based in Hamilton because you can get a billion dollars expansion fee out of those markets .

 

[StreetHawk]

It's a very limited asset that is "guaranteed" to appreciate in value. Plus if they announce it as $2bil and the new teams get in for $1bil the new owner will feel like they got a "deal".

I'm of the opinion that all these franchise values are a massive bubble and at some point the values will collapse.

We’ve seen insane increases in valuation. Between the time Ballmer paid $2 bill for the clippers to earlier on the last nba season the suns sell for double that at $4 bill are we getting to the point where the major increases are done and that valuation increases will level off a bit?

 

[CharasLazyWrister]

I don't know what you want from me.

I believe "Talent pool" is a stupid reason to be anti-expansion. The more popular a sport is, the more people play it, which adds to the talent pool.

You're correct to point out the most significant flaw in the supporting data. Great job!

Are you worried about the amount of talent available if the NHL decides to expand? Wanna talk about that, or should we just pull down our pants and measure?

The “watered down talent” argument is the same simple minded garbage I hear whenever people talk about firing a coach/GM and a bunch of fans chime in saying it’s a bad idea because “no one is available right now”.

There isn’t a small finite supply of hockey talent. The game is constantly being injected with the latest, greatest talent and we see this every single season.

There are certainly discussions to be had about the effects of expansion but the “watered down” talent is such a terrible angle.

 

[AtlantaWhaler]

You just don't understand Hamilton had population of 306.000 just 25 years ago & do to Hamilton absorbing some of the smaller cities in early 2000's Hamilton's population doubling in to over 600.000 & reason Hamilton's current population boom is a mass migration of people moving from Toronto because it is cheaper to live in Hamilton & combine that with immigration how fast the city has grown it should hit a million by 2030 .

I went by the Canadian Census numbers which show the MSA growing at about 0.5% annually. Assuming that growth continues, with the current population of 780,000, that puts the population reaching a million around 2050-ish.

I do think growth is the second biggest selling point to a city wanting a team. Both population and corporate growth. That's why we've seen the expansion/relocation to the Sunbelt. Everyone has been moving there for the last 30 years and continues to. Atlanta has averaged about 2% annual growth the last 20 years and has grown by over a million people just in the last 10 years.

However, I think the #1 selling point is a willing owner with deep pockets and an arena. That is where I'm skeptical of Atlanta's chances. Until I see who this potential owner is, I'm not getting overly excited.

 

[No Fun Shogun]

The simple fact is that Toronto and Buffalo both have powerful ownership groups, and neither seem to want to have a team team start up in Hamilton. And the bigger barrier is that I don't think there's anyone remotely interested in paying in the high nine figures+ for an expansion team there.

Sorry, Hamilton's just not happening. Their best shot was helmed by a guy that the NHL didn't like and that's long since passed.

 

[Headshot77]

The simple fact is that Toronto and Buffalo both have powerful ownership groups, and neither seem to want to have a team team start up in Hamilton. And the bigger barrier is that I don't think there's anyone remotely interested in paying in the high nine figures+ for an expansion team there.

Sorry, Hamilton's just not happening. Their best shot was helmed by a guy that the NHL didn't like and that's long since passed.

Their best shot was *ruined* by a guy who *tried to force his way in by acquiring the Yotes out of bankruptcy without the NHLs approval*

 

[No Fun Shogun]

Their best shot was *ruined* by a guy who *tried to force his way in by acquiring the Yotes out of bankruptcy without the NHLs approval*

I'm aware, but he was still the only Hamiltonian that I'm aware of that even tried. Even a drunkenly tossed free throw thrown from half court with one's non-dominant hand while falling has a better shot of getting in than a ball sitting on the ground, after all.

Not expecting a random Canadian billionaire appearing to change that that the asking price has increased potentially over tenfold and would assuredly be coupled with new arena or major arena refurbishment demands.

 

[BMN]

I maintain Hamilton's "best shot" had nothing to do with Balsillie and was way back in the early 90s. And that group got picky about how to pay the expansion fee. Pennywise, pound foolish. (FWIW, the requested fee then was $50mil which inflated to 2023 is $112 mil. A stone cold bargain compared to the money that could have been made.....).

Of Balsillie's attempts, the one that truly "got away" if he'd played the "right" way was the one he never (publicly but I always deeply suspected he did so privately) bid for: the Thrashers. Because that was the one team where the owners really didn't just threaten to throw the keys on the table, but honest-to-goodness threw the damn keys on the table with the city doing nothing other than saying "well, there are those keys sitting on the table alright."

While Balsillie was busy blitzkrieging everything is sight, Chipman & co. were quietly making nice and got Winnipeg a team at a tidy bargain.

 

[blueandgoldguy]

I don't think the renovations that are to be completed for the First Ontario Centre in Hamilton are enough to have it meet the demands required of a present-day NHL arena. They would need to add an additional upper deck concourse along with the requisite concessions/washrooms. I'm also not sure if their planned improvements (and expansion?) to the club areas are enough to meet present day demands.

What are they spending in total? $100 - $150 million? They would likely need to spend double that - around $250 - $300 million - to warrant serious consideration.

 

[Bixby Snyder]

The NHL neither needs nor wants more Canadian franchises, you'd think people would have figured that out after the past round of expansion.

 

[hammer42]

I don't think the renovations that are to be completed for the First Ontario Centre in Hamilton are enough to have it meet the demands required of a present-day NHL arena. They would need to add an additional upper deck concourse along with the requisite concessions/washrooms. I'm also not sure if their planned improvements (and expansion?) to the club areas are enough to meet present day demands.

What are they spending in total? $100 - $150 million? They would likely need to spend double that - around $250 - $300 million - to warrant serious consideration.

The reason why it is only going to cost 150 million dollars to make the FOC. NHL. ready is because when the arena was built it had future renos in mind so future renovation would be cost effective in other words cheap .

here is what they are going to do
Luxury boxes
Expand to over 19.000
Locker rooms
Concessions
On site craft brewery
cosmetics on the outside the arena

 

[hammer42]

Look the NHL. can't ignore putting a 2nd NHL. team in southern Ontario based in Hamilton for much longer there just way to much money to made there & with renos starting soon it is just a matter of time not if but when an expansion team gets here as for so called territory rights 1st Buffalo well they have pretty much given up there so called territory by restricting ticket sales in southern Ontario Toronto on the other hand should get nothing since they can draw from a population of 5 million people in there own city & the only reason they have not let Hamilton in is because out right greed & shady business practices not to mention Hamilton based regional team could draw from over 3 million people from Hamilton all the way through western Ontario & back & the team could be called Ontario not Hamilton .

The reason why it is only going to cost 150 million dollars to make the FOC. NHL. ready is because when the arena was built it had future renos in mind so future renovation would be cost effective in other words cheap .

here is what they are going to do
Luxury boxes
Expand to over 19.000
Locker rooms
Concessions
On site craft brewery
cosmetics on the outside the arena

I know I am replay to my own post I forgot one other thing the 25.000 seat Tim Hortons Field in Hamilton was built for only 150 million dollars .

 

[Headshot77]

If I was a QC fan I'd be livid that Hamilton was getting it's act together. I'm sure the NHL would rather go to Hamilton than Quebec and that would make their likelihood of getting a team even more remote.

 

[Saga of the Elk]

I’m not exactly for expansion, but the talent pool argument is laughable. The talent pool is much sept than the 70’s/80’s/early 90’s when the league went through rapid expansion (plus wha in the 70’s). A big reason for the “dead puck” era (besides modern trained goalies coming up into the league in rapid fashion from 94-97) is that the talent pool coming into the league (in the form of the iron curtain falling + seeping US player pool) outpaced expansion.

It wasn’t a coincidence that goals per game ticked up when Vegas and Seattle came into the league.

Right. There are fewer good goalies, defensemen and forwards, so scoring is easier.

Ergo, the more you expand..the more scoring will go up. If scoring is the only factor, then sure, expansion is great. If good hockey based on checking, skating, skills and so forth are what matter, then expansion talk needs to stop.

 

[BKIslandersFan]

Look the NHL. can't ignore putting a 2nd NHL. team in southern Ontario based in Hamilton for much longer there just way to much money to made there

Yes they can.

 

[hammer42]

Yes they can.

Really recall Gary Bettmen saying that a NHL. team in Hamilton would be a top 5 market in other words a huge amount of money can be here & if you look at the size of Greater Toronto Hamilton Area (GTHA.) you are looking at over 8 million people .

 

[BKIslandersFan]

Really recall Gary Bettmen saying that a NHL. team in Hamilton would be a top 5 market in other words a huge amount of money can be here & if you look at the size of Greater Toronto Hamilton Area (GTHA.) you are looking at over 8 million people .

Yet they still do not have a team. Nor a bidder after Balsillie stopped trying.

Actions speak louder than words.

 

[MNNumbers]

Really recall Gary Bettmen saying that a NHL. team in Hamilton would be a top 5 market in other words a huge amount of money can be here & if you look at the size of Greater Toronto Hamilton Area (GTHA.) you are looking at over 8 million people .

The problem is that all of that money is going to go to the owner, and very little in the way of merchandising and TV money will go to the other owners. Plus it will raise the HRR, so it will raise the salary cap, and thereby cost the existing owners money.

That's the calculation.

 

[Bixby Snyder]

Really recall Gary Bettmen saying that a NHL. team in Hamilton would be a top 5 market in other words a huge amount of money can be here & if you look at the size of Greater Toronto Hamilton Area (GTHA.) you are looking at over 8 million people .

If Bettman actually said that it would be the stupidest thing he ever said. If you look at NHL team valuations only 3 Canadian teams make the top 10, so how would a market that would be by far the smallest in Canada be top 5? It wouldn't even be top 5 in Canada.

 

[MNNumbers]

If Bettman actually said that it would be the stupidest thing he ever said. If you look at NHL team valuations only 3 Canadian teams make the top 10, so how would a market that would be by far the smallest in Canada be top 5? It wouldn't even be top 5 in Canada.

Quote is from about 2009, during the BK proceedings in Phoenix. He was on the witness stand. Clearly, it was an accurate evaluation of what the league thought of the market AT THAT TIME.

However, again, if most of the money would go to the owner, rather than being shared with the other owners, is that what the owners want? Note that Vegas has been a huge boom in terms of US-wide interest and merchandising. Exactly perfect for all of the owners. Likely, Hamilton would never be that.

 

[Bixby Snyder]

Quote is from about 2009, during the BK proceedings in Phoenix. He was on the witness stand. Clearly, it was an accurate evaluation of what the league thought of the market AT THAT TIME.

Okay, but I would bet that evaluation had a lot of qualifications to it because of the amount that could charged for relocation fees.

However, again, if most of the money would go to the owner, rather than being shared with the other owners, is that what the owners want? Note that Vegas has been a huge boom in terms of US-wide interest and merchandising. Exactly perfect for all of the owners. Likely, Hamilton would never be that.

This is a good point, a team in Hamilton or any other Canadian market does nothing for the other owners no matter how well the team does locally. Also the only reason the league is considering further expansion at this time is bring up the number of US markets close to what the other leagues have.

 

[hammer42]

There is strong corporate support in the GTHA & 2nd NHL. regional team based in Hamilton would benefit those corporate & TV. dollars that come out of Toronto & with 8 million people to draw from that means huge money for the NHL. & everyone else involved also what everyone is forgetting here that the NHL. is a gate driven league which means most of its profits come form putting butts in the seat & merchandise off the shelves you put a team in Hamilton you will see that top 5 market revenue .

 

[TheLegend]

Really recall Gary Bettmen saying that a NHL. team in Hamilton would be a top 5 market in other words a huge amount of money can be here & if you look at the size of Greater Toronto Hamilton Area (GTHA.) you are looking at over 8 million people .

That was also 14 years ago when Balsillie was trying to move the Coyotes there.

The league needed to show Balsillie was attempting to undermine the league’s ability to get what they felt the market was worth.

Since then there’s been just one attempt to get a second team in the GTA when Seattle got in and it fell flat on its face.

 

[Bixby Snyder]

NHL. is a gate driven league which means most of its profits come form putting butts in the seat

This is not the case anymore as gate receipts make up about 1/3 of the leagues revenue. The NHL makes more from broadcast rights.