Expansion fee: Who decided how much and where it could end?

[alko]

How is the expansion fee calculated? Or who decided, how big it should be?

Is 650 mil. the cap? Or will we see in next expansion also 800 mil. or even 1 000 000 000?

Click to read more...

 

[Howie Hodge]

It's actually calculated by one Delores Magdalena O'Riorden, an 87 year old grandmother, out of her knitting room at her house in Painted Post New York...

or;


The curt 31 owners set the fee.

Further expansion cost will be determined by the soon to be 32 owners.

They will charge as much as they think they can get.

Also depends on where the value of the teams is set at the time they/if they decide to expand.

 

[LadyStanley]

As well as the new location of said expansion team.

Montreal would be higher than Houston, for instance.

 

[Rigafan]

They'll obviously want 1bn just to say they are a 'billion dollar league'. Didn't the NBA do this recently too?

One thing I find interesting though is the higher the fee, the less and less potential owners you have our there, right? Sure these ultra rich don't need to like sports of hockey but it certainly helps I'm sure if the owner knows the game or the sports business already, right?

 

[TomP24684]

It's actually calculated by one Delores Magdalena O'Riorden, an 87 year old grandmother, out of her knitting room at her house in Painted Post New York...

or;


The curt 31 owners set the fee.

Further expansion cost will be determined by the soon to be 32 owners.

They will charge as much as they think they can get.

Also depends on where the value of the teams is set at the time they/if they decide to expand.

I don’t understand the Dolores O’Riordon joke.

 

[Dirty Old Man]

If her granddaughter was the lead singer of the Cranberries, that joke might be a little too soon.

 

[Jumptheshark]

If her granddaughter was the lead singer of the Cranberries, that joke might be a little too soon.

It is a double joke.

For nearly 40 years the US poverty math was done based upon a Polish immigrant and her views of what to buy

 

[StreetHawk]

They'll obviously want 1bn just to say they are a 'billion dollar league'. Didn't the NBA do this recently too?

One thing I find interesting though is the higher the fee, the less and less potential owners you have our there, right? Sure these ultra rich don't need to like sports of hockey but it certainly helps I'm sure if the owner knows the game or the sports business already, right?

Unless half the teams are worth $1 billion unrealistic to ask that.

Largest markets would be Houston and likely Atlanta. But, because both cities have an arena in plus with an NBA team it’s really up to the NBA owner if they want an NHL team. That’s the economics of arenas today. All about who controls the revenue streams. Don’t think there is an nhl tenant to a nba run arena.

 

[rojac]

It is a double joke.

For nearly 40 years the US poverty math was done based upon a Polish immigrant and her views of what to buy

In the West Wing universe, that is true. In the real universe, Mollie Orshansky, the person in question, was the Bronx-born daughter of Ukrainian immigrants who grew up in New York city.

Mollie Orshansky - Wikipedia

 

[BKIslandersFan]

Unless half the teams are worth $1 billion unrealistic to ask that.

Largest markets would be Houston and likely Atlanta. But, because both cities have an arena in plus with an NBA team it’s really up to the NBA owner if they want an NHL team. That’s the economics of arenas today. All about who controls the revenue streams. Don’t think there is an nhl tenant to a nba run arena.

Islanders but that is the primary reason why they are moving out to Belmont. If Barclays Center ownership owned Islanders, regardless of obstruction they are not moving.

 

[Ted Hoffman]

Unless half the teams are worth $1 billion unrealistic to ask that.

All it takes is one person to say, "sure - I'll write a check for [finger by lip] $1 billion." As I said for many years and continue to point out today: the value of an asset is whatever someone else unrelated to the seller will buy it for. Not a penny more, not a penny less. Any other estimated or touted values are fluff talk and don't mean squat when it's on the market.

 

[StreetHawk]

All it takes is one person to say, "sure - I'll write a check for [finger by lip] $1 billion." As I said for many years and continue to point out today: the value of an asset is whatever someone else unrelated to the seller will buy it for. Not a penny more, not a penny less. Any other estimated or touted values are fluff talk and don't mean squat when it's on the market.

Yeah, if you have a Ballmer who has tens of billions he can out bid others by $200 plus million and not care.

But that’s very much dictated by the market. Can get away paying $2 billion for the LA market but doing that for Portland or Utah wouldn’t make sense.

 

[Ted Hoffman]

Yeah, if you have a Ballmer who has tens of billions he can out bid others by $200 plus million and not care.

But that’s very much dictated by the market. Can get away paying $2 billion for the LA market but doing that for Portland or Utah wouldn’t make sense.

1. Ballmer paid $2 billion for an NBA franchise in a prime market. That's different than Portland or Utah for an NHL franchise - but still,
2. You've illustrated my point. The Clippers were quite arguably not worth close to $2 billion, but all it took was one (1) person to decide to throw that kind of money down. Were Paul Allen still alive and deciding to really want an NHL franchise in Portland right now, a $1 billion entry fee would have been pocket change.

 

[StreetHawk]

1. Ballmer paid $2 billion for an NBA franchise in a prime market. That's different than Portland or Utah for an NHL franchise - but still,
2. You've illustrated my point. The Clippers were quite arguably not worth close to $2 billion, but all it took was one (1) person to decide to throw that kind of money down. Were Paul Allen still alive and deciding to really want an NHL franchise in Portland right now, a $1 billion entry fee would have been pocket change.

Was referring to Portland and Utah in the NBA, 2 much smaller markets. Ballmer beat Ellisons bid of $1.6 billion, so 25% more.

Any city with an NBA team pretty much means that the arena is controller/operated by the nba team. So it’s the nba owner who will have to decide if they want an nhl team as well. Seen many years of Paul Allen in Portland and Les Alexander in Houston not interested. Either of them could have put in a bid for the Thrashers and gotten them.

 

[GuelphStormer]

As well as the new location of said expansion team.

Montreal would be higher than Houston, for instance.

yeah, but would it, though? if the league, for whatever nutty reason, decided to open up bidding for two more expansion franchises and (again, this is nutty) groups from both houston and montreal were selected, would the league actually charge more for montreal? or just say they did?

and even given the 3 or 4 year difference in time, is the seattle market location worth $650M but vegas is only worth $500M?

i mean, how much is phoenix supposed to be worth now? i dunno, i think expansion fee is largely arbitrary based on where the league wants median valuation to be.

 

[aqib]

It's actually calculated by one Delores Magdalena O'Riorden, an 87 year old grandmother, out of her knitting room at her house in Painted Post New York...

This wins the internet.

 

[gstommylee]

Was referring to Portland and Utah in the NBA, 2 much smaller markets. Ballmer beat Ellisons bid of $1.6 billion, so 25% more.

Any city with an NBA team pretty much means that the arena is controller/operated by the nba team. So it’s the nba owner who will have to decide if they want an nhl team as well. Seen many years of Paul Allen in Portland and Les Alexander in Houston not interested. Either of them could have put in a bid for the Thrashers and gotten them.

The issue with Portland always came down is price. Would paul allen be willing to spend that kind of money on an expansion team or a relocated team no. He wouldn't. He was very very clear on that back when he made that comment.

 

[powerstuck]

The answer is simple, the fee could be $5B if someone was willing to pay that. But as long as there are teams that could be bought for much less than that, it's not going to happen.

And it's not because someone wants to buy the Leafs/Rangers/Habs and only one of those 3 teams and is ready to pay 3 billion to obtain them, that all teams are suddenly worth 3 billion even tho NHL would like to see it that way.

Besides, Allen can be deep pocketed, but there were (and probably still are) rumors that he didn't wanted to pay the price NHL wants for an franchise.

 

[gstommylee]

The answer is simple, the fee could be $5B if someone was willing to pay that. But as long as there are teams that could be bought for much less than that, it's not going to happen.

And it's not because someone wants to buy the Leafs/Rangers/Habs and only one of those 3 teams and is ready to pay 3 billion to obtain them, that all teams are suddenly worth 3 billion even tho NHL would like to see it that way.

Besides, Allen can be deep pocketed, but there were (and probably still are) rumors that he didn't wanted to pay the price NHL wants for an franchise.

No NHL team is ever gonna be worth close to 5b yet alone 3b. It'll be interesting to see how things move forward in regards Portland getting a NHL team since Jody Allen is now in control of Moda Center. Will Jody continue to own the trailblazers and the arena long term or will she sell? Who's gonna be the $$$ person? Who knows what will happen there.

I still don't see the NHL going beyond 32 teams. It just gets to the point of the $$$ (it'll increase) being too much for future markets.

 

[Ted Hoffman]

Was referring to Portland and Utah in the NBA, 2 much smaller markets. Ballmer beat Ellisons bid of $1.6 billion, so 25% more.

Any city with an NBA team pretty much means that the arena is controller/operated by the nba team. So it’s the nba owner who will have to decide if they want an nhl team as well. Seen many years of Paul Allen in Portland and Les Alexander in Houston not interested. Either of them could have put in a bid for the Thrashers and gotten them.

That presumes that (A) either one was interested [probably not, but who knows given that specific situation] and (B) either one actually had a shot at the Thrashers [by all accounts, no - it was intentionally kept quiet as long as possible to avoid lawsuits and delays]. But why stop there? Why couldn't it have been Milwaukee, or New Orleans, or any of the oft-mentioned cities that have an NHL-capable arena and no NBA team playing in it?

Again, any pro sports league can ask for whatever expansion fee it wants. It doesn't mean it's right, it doesn't mean it's grounded in reality, it doesn't mean it has to have any kind of bearing to what franchise values are for other teams - but if one someone's willing to write the check, that's all that matters.

 

[StreetHawk]

That presumes that (A) either one was interested [probably not, but who knows given that specific situation] and (B) either one actually had a shot at the Thrashers [by all accounts, no - it was intentionally kept quiet as long as possible to avoid lawsuits and delays]. But why stop there? Why couldn't it have been Milwaukee, or New Orleans, or any of the oft-mentioned cities that have an NHL-capable arena and no NBA team playing in it?

Again, any pro sports league can ask for whatever expansion fee it wants. It doesn't mean it's right, it doesn't mean it's grounded in reality, it doesn't mean it has to have any kind of bearing to what franchise values are for other teams - but if one someone's willing to write the check, that's all that matters.

And yet, only LV and QC applied for the 2017 round of expansion of $500 million? Don't think there's a massive demand for the NHL that would lead one to believe we are anywhere close to someone paying $1 billion for one.

Anyone with massive pockets can write that check if they want. So, it's always possibility.

But, arenas are a huge part of sports teams. And if there is one in place, it falls on that operator/controller of the arena to decide if they want a team. And if that group also owns an NBA team, are they really going to make a non business decision on an NHL team and pay a premium for it if they already own a team? I doubt it.

Even if someone else in the say Houston, wanted an NHL team and was willing to do what Ballmer is wanting to do for the Clippers and build their own arena, they likely are not doing it in the same city/county where the Toyota Centre resides. Doesn't do anything for the city for have a second indoor arena. It would have to be in another metro area, similar to Glendale to Phoenix.

 

[Ted Hoffman]

And yet, only LV and QC applied for the 2017 round of expansion of $500 million? Don't think there's a massive demand for the NHL that would lead one to believe we are anywhere close to someone paying $1 billion for one.

You clearly want to keep arguing this to exhaustion, and I don't have the interest to keep this going.