Hanging on a pipe dream: Is another NHL team coming to Toronto?

[gordie]

Toronto is the Financial Capital of Canada, so you will always get these fly-by-night business people proposing to get a 2nd NHL team or a NFL team and nothing will ever come of it. This has been going on for Decades.

 

[Bjorn Le]

A second team won't happen. It's actually been tried a couple of times and both failed early in the attempt. It ends up being a non feasible business decision.

Aside from the cost of a new franchise, the owner would also need a new arena acceptable by the NHL. One of the previous attempts was looking at the arena in Hamilton but it was rejected by the NHL. On top of that, a team in the southern part of Ontario has to pay fees to both Toronto and Buffalo for invading their territory and that would run close to $200M plus each. As well, a new team would pull some fans but would always be a second team: like the Mets to the Yankees, Clippers to the Lakers, Islanders to the Rangers ... a team that would always run second in revenues as well. On top of all that, MLSE owns all the feasible downtown areas for an arena.

So a new team owner would have to pay for a new franchise, plus build a new acceptable arena in an area in the north of Toronto that would not have any decent transportation to it, plus all support staff and farm teams needed for a new franchise, and after all that, would still be a secondary team for the area. For a new owner to do it, it would require well over a billion plus just for the minimum to start and would have a lower revenue stream that would take decades to recover the initial capital cost after yearly operating costs are factored in. This has been discussed to death many times in the past, and it was also in The Economist a few years back. It just doesn't have good enough business criteria to do it.

The location part isn't true, there are plenty of places to put a new arena that is on the transit line. Vaughan Metropolitan Centre, Downsview, Willowdale/Sheppard-Yonge, etc. Accessible by car? Difficult, but Scotiabank Arena is already pretty difficult to access by car with the Gardner in shambles.

I do agree that the roadblocks are a pretty massive impediment, but I don't think it's a potential revenue issue. It's a capital issue, for GTA 2 at least. For Hamilton it's that it's a poor mans GTA 2 for almost the same cost. I would still bet money on a new Southern Ontario team by 2040. Whether that's GTA 2, KW (possibility of not having to pay either TML or BUF) or god-forbid Hamilton, it's going to happen. Someone legitimate will eventually put the money together.

 

[Snarky Coyote]

If you take a look at the Jets tone and manner in obtaining the Thrashers you are looking at a textbook way to make this happen. In silence, not quietly, but silently and out of public sight. Sit on your hands, strike up a relationship and when the opportunity provides itself write a huge check. I am not an expert but I think announcing this to the media is 100% the most ineffective way to proceed.

 

[maroon 6]

If the Los Angeles Metro can support 2 teams I don't see why Toronto can't. Los Angeles is obviously way more populated but it also has a lot more other professional teams that are more supported than the hockey teams.

 

[Rcknrollkillnmachine]

No second Toronto team unless the Nordiques return and that doesn't seem like happening any time soon.

 

[RealityBytes]

The location part isn't true, there are plenty of places to put a new arena that is on the transit line. Vaughan Metropolitan Centre, Downsview, Willowdale/Sheppard-Yonge, etc. Accessible by car? Difficult, but Scotiabank Arena is already pretty difficult to access by car with the Gardner in shambles.

I do agree that the roadblocks are a pretty massive impediment, but I don't think it's a potential revenue issue. It's a capital issue, for GTA 2 at least. For Hamilton it's that it's a poor mans GTA 2 for almost the same cost. I would still bet money on a new Southern Ontario team by 2040. Whether that's GTA 2, KW (possibility of not having to pay either TML or BUF) or god-forbid Hamilton, it's going to happen. Someone legitimate will eventually put the money together.

I guess you didn't read the comment that "the only suitable area for an area in the downtown area is owned by MLSE." They own a lot of land in the downtown area. As for southern Ontario vs going north, it would cost an additional $400M to half a billion dollars more because they would be invading both Toronto and Buffalo's territory. The business case is just not there, the money invested would be far more than a new franchise in a place like Seattle and the return on the investment needed would take a long time to recover. That lack of return stops small consortiums from investing and billionaires don't just throw a couple of billion away on a poor business proposition whim. Another team in Ontario, possible but doubtful. A new one in the Toronto GTA area, most likely not.

As well, the NHL is not looking to add a team in the area, they already have the fans of the market area. What the NHL wants is new places without a team to increase the total NHL viewer count. That was also mentioned as one of the reasons why Quebec City could not get a new franchise even though they have the new acceptable arena and a consortium to buy a franchise, all the NHL would be doing would be stealing fans from the Montreal Canadiens, not increasing the total viewer count. That's not what they want with expansions.

 

[RealityBytes]

If the Los Angeles Metro can support 2 teams I don't see why Toronto can't. Los Angeles is obviously way more populated but it also has a lot more other professional teams that are more supported than the hockey teams.

It's also the cost of setting up a team that affects this. A lot of money needs to be invested which needs a decent return. The business case to set up a new team has to be profitable, not wait a decade for return on investment. It costs a lot more to set up a team now than in the past.

The LA Kings originally cost $2M to be set up as one of the original six added teams in 1967. The Anaheim Ducks were established in 1992 for next to nothing except for the $50M invasion fee they had to pay the Kings. The Ducks original roster salary total was only $7.9M. It was a lot less expensive with less money to add a team then than it is now.

Also keep in mind that the California/Oakland Seals was a second team added to California in Oakland (San Francisco) in 1967 but failed because they were unsuccessful at the gate. The Seals eventually became part of the Minnesota North Stars. In other words, the first attempt at two teams in California failed.

 

[IceNeophyte]

My understanding is that the leafs have no direct way of blocking the team.

* wink wink!

 

[HugoSimon]

Alright, HFboards Leafs nation. Let's take a vote. Raise your hand if you'd switch to the Toronto 2 team.

Crickets.

Today I learned of the 10 million people living in southern ontario they are all 100 percent leaf fans.

Ignoring the fact that several million people in the area didn't even grow up in Toronto this reasoning is absolutely absurd.

You're bringing more NHL hockey games to the GTA, just ordinary folk wanting to see McDavid/Stamkos/Crosby/Ovechkin will fill several dates, not to mention when 1 of the 7 Canadian teams comes to town.

There's a long list of reasons why people would support a GTA2 over the Leafs. Ordinary rebellion, hating the leafs, being sick of the leafs, sick of leafs fans, because their media package pushes the team, because they are new to hockey and the list goes on.

 

[HugoSimon]

A second team won't happen. It's actually been tried a couple of times and both failed early in the attempt. It ends up being a non feasible business decision.

Aside from the cost of a new franchise, the owner would also need a new arena acceptable by the NHL. One of the previous attempts was looking at the arena in Hamilton but it was rejected by the NHL. On top of that, a team in the southern part of Ontario has to pay fees to both Toronto and Buffalo for invading their territory and that would run close to $200M plus each. As well, a new team would pull some fans but would always be a second team: like the Mets to the Yankees, Clippers to the Lakers, Islanders to the Rangers ... a team that would always run second in revenues as well. On top of all that, MLSE owns all the feasible downtown areas for an arena.

So a new team owner would have to pay for a new franchise, plus build a new acceptable arena in an area in the north of Toronto that would not have any decent transportation to it, plus all support staff and farm teams needed for a new franchise, and after all that, would still be a secondary team for the area. For a new owner to do it, it would require well over a billion plus just for the minimum to start and would have a lower revenue stream that would take decades to recover the initial capital cost after yearly operating costs are factored in. This has been discussed to death many times in the past, and it was also in The Economist a few years back. It just doesn't have good enough business criteria to do it.

And you think Seattle makes more sense?

A place where they already have a failed NBA team under their belt, an NFL team, and an MLB?

Ignoring that it is smaller than the GTA, has a smaller catchment area, has less direct interest in hockey?

If an Arena gets built independent from a NHL bid you can be assured the economics will end up being very different from what they are now. The housing bubble is enough reason alone to suggest that this might work out better than expected.

An arena and a Rogers Bell split would get you 50 percent of the way there.

 

[HugoSimon]

[QUOTE="RealityBytes, post: 166269347, member: 188053"

As well, the NHL is not looking to add a team in the area, they already have the fans of the market area. What the NHL wants is new places without a team to increase the total NHL viewer count. That was also mentioned as one of the reasons why Quebec City could not get a new franchise even though they have the new acceptable arena and a consortium to buy a franchise, all the NHL would be doing would be stealing fans from the Montreal Canadiens, not increasing the total viewer count. That's not what they want with expansions.[/QUOTE]

This is why your claim that "this has been tried before and failed" is just so absurd.

The NHL isn't turning down a billion dollar expansion fee from anyone. The idea that they would reject such an offer is more than enough to devalue each and every team in the NHL.

 

[HugoSimon]

I would still bet money on a new Southern Ontario team by 2040. Whether that's GTA 2, KW (possibility of not having to pay either TML or BUF) or god-forbid Hamilton, it's going to happen. Someone legitimate will eventually put the money together.

I think KW is a smart choice. The population growth going on there is insane. With Hamilton, Guelph and London so close its hard to imagine it not being a relative success.

 

[Zenos]

How would they even build a fan base? Seriously.

They would obviously have their work cut out for them, but I don't think it's impossible. Either they:

1) go locational and try to establish themselves as the "home" team for a specific area; like the Angels or Ducks in Orange County or maybe the Islanders for Long Island. This would obviously be possible for Hamilton or K-W, but probably much less successful for cities more closely associated with Toronto itself like Mississauga, Markham, or York Region (who don't really have their own independent history, culture, tradition).

2) go after a different market segment. Maybe it's more families (who are priced out of Leafs games)? Go after smaller businesses for season ticket sales rather than the big banks and Bay Steet who can support he Leafs. Try to target different demographics.

3) And this is the most realistic for me, simply realize that the Leafs will always be king, but in a huge hockey market, there's still a large enough appetite for a second team. Lets call this the Clippers method. The Leafs have the Saturday night time-slot monopolized? Fine, make Friday evening or Sunday afternoon the prime-time for T2. Maybe place the team in the Central division (like the Leafs were once in the Norris), to increase exposure to western conference teams.

 

[BKIslandersFan]

And you think Seattle makes more sense?

A place where they already have a failed NBA team under their belt, an NFL team, and an MLB?

Ignoring that it is smaller than the GTA, has a smaller catchment area, has less direct interest in hockey?

If an Arena gets built independent from a NHL bid you can be assured the economics will end up being very different from what they are now. The housing bubble is enough reason alone to suggest that this might work out better than expected.

An arena and a Rogers Bell split would get you 50 percent of the way there.

NBA didn’t fail in Seattle. They just couldn’t get the city or state to cough up money for new arena.

 

[Dirty Old Man]

There's a long list of reasons why people would support a GTA2 over the Leafs.

None of which will ever overcome the reason GTA2 won't happen: money. But feel free to lash out at everyone else for the next few years, even if completely unrelated - Bettman, the league, Leafs owners, fans of teams in other markets...we're used to it.

 

[powerstuck]

A second team won't happen. It's actually been tried a couple of times and both failed early in the attempt. It ends up being a non feasible business decision.

Aside from the cost of a new franchise, the owner would also need a new arena acceptable by the NHL. One of the previous attempts was looking at the arena in Hamilton but it was rejected by the NHL. On top of that, a team in the southern part of Ontario has to pay fees to both Toronto and Buffalo for invading their territory and that would run close to $200M plus each. As well, a new team would pull some fans but would always be a second team: like the Mets to the Yankees, Clippers to the Lakers, Islanders to the Rangers ... a team that would always run second in revenues as well. On top of all that, MLSE owns all the feasible downtown areas for an arena.

So a new team owner would have to pay for a new franchise, plus build a new acceptable arena in an area in the north of Toronto that would not have any decent transportation to it, plus all support staff and farm teams needed for a new franchise, and after all that, would still be a secondary team for the area. For a new owner to do it, it would require well over a billion plus just for the minimum to start and would have a lower revenue stream that would take decades to recover the initial capital cost after yearly operating costs are factored in. This has been discussed to death many times in the past, and it was also in The Economist a few years back. It just doesn't have good enough business criteria to do it.

Just for the business side.

Team #2, as long as it's outside a 50 miles radius of the another teams arena has no compensation to pay.

Molson confirmed it when being asked about a potential team coming to Quebec City and how Habs would react to it. He said they cannot do nothing to stop it from happening as long as it's outside that exclusive zone.

Now...teams and team owners can do a whole lot of things behind closed doors to prevent such thing from happening.

 

[SuperScript29]

How would they even build a fan base? Seriously.

In the city of Toronto itself? It would be tough, but if it's somewhere like Hamilton, I would imagine a few would jump the banwaggon, plus whatever youth growing up would get accustomed to the new team. That being said, Hamilton is a dump, so not happening.

 

[cbcwpg]

Sure... let's build a hockey rink so big that I will not even be able to see the puck from my $200 seats in the back row.

 

[sabresfan65]

Just for the business side.

Team #2, as long as it's outside a 50 miles radius of the another teams arena has no compensation to pay.

Molson confirmed it when being asked about a potential team coming to Quebec City and how Habs would react to it. He said they cannot do nothing to stop it from happening as long as it's outside that exclusive zone.

Now...teams and team owners can do a whole lot of things behind closed doors to prevent such thing from happening.

Remember that would be 100 miles from Toronto/Buffalo/Detroit or the new teams 50 miles would encroach on the old teams 50 miles. K-W is 90 miles from Buffalo and 66 miles from Toronto.

 

[Ernie]

I say put the team right in Toronto. The city is probably big enough to support two stadiums.

And yes there will be eyeballs. Might be a crap ton of Leafs jerseys in the stands, but people will watch, especially when the Leafs aren't doing very well.

 

[BKIslandersFan]

Sure... let's build a hockey rink so big that I will not even be able to see the puck from my $200 seats in the back row.

They already did. It’s called Bell Centre.

 

[Jozay]

Toronto 2 has been out there for so long, if it was going to happen, it would've happened already.

 

[BKIslandersFan]

Also not only are MLSE going to oppose second NHL team on grounds of hockey reasons, they will also oppose the new arena that will serve as competitors to Scoatiabank Centre.

 

[Voight]

Toronto Might Actually Get Another NHL Team & Torontonians Are Shook

North End of the city, not in any of the suburbs. Close to one of them tho.

Also not only are MLSE going to oppose second NHL team on grounds of hockey reasons, they will also oppose the new arena that will serve as competitors to Scoatiabank Centre.

They shouldn't worry. The ACC will still get the majority of the concerts and if anything artists who do 2 or 3 nights will split the shows.

Except Seattle doesn't already have an NHL team and has the market all to itself.

Hockey is infinitely more popular in Toronto than Seattle.

Nevermind the 7 million people in the GTA.

 

[Rob Brown]

Toronto Might Actually Get Another NHL Team & Torontonians Are Shook

North End of the city, not in any of the suburbs. Close to one of them tho.

Narcity is absolute trash. I wouldn't turn to them for news if my life depended on it.

Regardless, I do think the GTA can easily support another team but they have to be a bit more creative, specifically by looking at somewhere other than Toronto, such as Mississauga, Kitchener-Waterloo, Hamilton etc. There are plenty of people in these areas that would support a local team, but you're not going to do much setting up shop in Toronto. I doubt enough people from Niagara to Hamilton or Kitchener-Waterloo, Guelph etc. will drive en masse to watch a team play in the north end of the city.