I think the issue comes down to what exactly is a " Franchise "?
A “franchise” is effectively a permit by the NHL which grants an owner the right to field a team.
This is an important underlying concept, because a franchise is effectively a piece of property. When we say that an owner is selling “the team”, we mean he is selling the franchise and all the assets/debts associated with it. This is a totally separate subject than all this talk about statistical records and retired numbers, which are not actual property to be bought and sold.
Traditionally there are three ways that a franchise can be disconnected from a particular location:
- Relocate, the most common. This leaves the
franchise unchanged, though it will mean a lot of changes within the staffing and logistics of the organization.
- Fold, which means the franchise ceases to exist. This absolutely will not be allowed to happen in a modern major league, as a franchise is worth a billion bucks and would always be sold rather than folded.
- Inactive, which essentially means the franchise only exists on paper for a period of time. It carries on as a business entity, but its day-to-day operations cease.
Why go inactive? Sometimes an owner gets into a bad situation where continuing to operate is impractical — such as being kicked out of their arena, or being unable to cover payroll — but has a plan for getting back on their feet at a later time. By going inactive, they keep their franchise and will not have to apply for expansion in order to re-start the business. Depending on the rules at the time, they might also keep certain assets such as players’ contract rights, their brand/logo, rights to the market, voting rights as an owner, and so forth. It’s strongly preferable to folding and losing everything, and in rare cases it makes more sense than selling the franchise to someone else.
There is also the option to merge two teams, but be careful to note that it’s usually the
teams being merged and not the franchises. Merging two franchises would imply that the owners have become co-owners of a combined organization. Under normal circumstances, it would be preferable to merge the
teams and fold one of the franchises, in order to let a broke owner declare bankruptcy.
If the franchise is indeed inactive and the Utah team is a "new" franchise inheriting the players and hockey ops staff... does that mean when the deal is finalized this summer that the NHL will technically have 33 teams in it?
Yes, technically. But it would be more accurate to say 33
franchises, as “team” implies a bunch of guys playing hockey.
Because they're the same thing. A team can both be reactivated and be an expansion team at the same time.
This has already happened in the NHL before. The Cleveland Barons, formerly the California Golden Seals, went inactive and the league merged the team with the Minnesota North Stars. Then, 13 years later, the franchise was reactivated as the expansion San Jose Sharks.
In the case we’re experiencing, it would make a lot more sense for the NHL to transfer the Merulelo franchise to SLC owners, and then create an expansion franchise for any future Meruelo team. Under the OP’s understanding of this deal, they are effectively giving away a billion-dollar franchise to Meruelo for free, which makes little sense.
It’s possible there are some backroom arrangements at play, perhaps as part of the original effort to find an owner willing to make a go of it in Arizona. Perhaps they effectively promised Meruelo that that he would either succeed with the Yotes, or receive an expansion franchise, thus making his purchase almost bulletproof from financial failure. If that were the case, it could help explain the weirdness of how this all played out.
