Potential markets for potential NHL expansion beyond 32
- Thread starter Big Z Man 1990
- Start date
It’s going to continue to be like that whenever a market comes up that already has a primary tenant in the building. Most situations, it will be that primary tenant that has control over the revenue streams of the building. So they ultimately decide whether they wish to put in a bid. I don’t think an NHL team financially is in a position to be tenant to an NBA run arena by another owner. Seen that in Philly and Boston where NHL team has control but not the other way around.
Correct. The issue in Houston is that Fertitta himself isn't interested in paying the going rate. Since he isn't, it locks out anyone else for reasons you describe well.
More generally: Arizona is a tenant only, and gets only game night revenues. There is no other team playing at their arena. I'm not sure if any other teams have that situation as well.
TheLegend
Megathread Gadfly
Actually the IFL Arizona Rattlers are scheduled to play at GRA this coming season because the Sun’s arena is currently undergoing that massive remodel. But it’s only for this coming season.
I see, and forgive me for not communicating with enough detail. I meant another top level league team in another sport, like the Suns in basketball (who play in Phoenix, of course). They (Yotes) don't pay rent to another team. They are simply tenants of the City of Glendale. I wonder if any other NHL team has that situation.
TheLegend
Megathread Gadfly
No need for that.... you were spot on about the Coyotes being just a tenant. I don’t know of another NHL team who would be paying another but the NBA has an example with the Clippers.
Centrum Hockey
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- Aug 2, 2018
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AEG only has a minority stake in the Lakers. They may have the right of first refusal to buy the team as well.
TheLegend
Megathread Gadfly
But Philip Anschutz owns AEG, who owns Staples Center, and the Kings directly.
^^^^^
But, on the other hand, when the Yotes first moved to Phoenix, they paid rent to the Suns, because the Suns ran the arena. That was NHL paying NBA rent to play in their building.
Conversely, the Celtics pay rent to the Bruins.
Perhaps Raptors pay rent to Leafs (or does MLSE own the Raptors, too?)
In between, Dallas and Chicago have joint arena management rights between NBA and NHL.
A few cities have joint ownership.....for example, I think in Washington the same ownership cabal owns NHL and NBA.
In Minnesota, the NBA and NHL play in different arenas.
The unique thing about the Yotes is that their arena is owned by the city, and operated by an operating company (AEG, in this case), and the team pays the rent to the city. Again, to the city. And, only makes what they can get on game nights. This is a very interesting situation.
As to potential markets...
Say someone else in Houston paid the expansion fee, but wanted to play at Toyota Center. They would have to pay Fertitta. NHL pays NBA.
Say someone somehow buys a team for Quebec. Quebecor has management rights, so if the ownership cabal includes Quebecor, then there is no rent. Otherwise, there would be.
Kansas City: City manages Sprint themselves. And, won't give an AMF (subsidy) because the arena is pretty well used, so they don't really need an anchor tenant.
These are mult-million-dollar-a-year considerations.
But, on the other hand, when the Yotes first moved to Phoenix, they paid rent to the Suns, because the Suns ran the arena. That was NHL paying NBA rent to play in their building.
Conversely, the Celtics pay rent to the Bruins.
Perhaps Raptors pay rent to Leafs (or does MLSE own the Raptors, too?)
In between, Dallas and Chicago have joint arena management rights between NBA and NHL.
A few cities have joint ownership.....for example, I think in Washington the same ownership cabal owns NHL and NBA.
In Minnesota, the NBA and NHL play in different arenas.
The unique thing about the Yotes is that their arena is owned by the city, and operated by an operating company (AEG, in this case), and the team pays the rent to the city. Again, to the city. And, only makes what they can get on game nights. This is a very interesting situation.
As to potential markets...
Say someone else in Houston paid the expansion fee, but wanted to play at Toyota Center. They would have to pay Fertitta. NHL pays NBA.
Say someone somehow buys a team for Quebec. Quebecor has management rights, so if the ownership cabal includes Quebecor, then there is no rent. Otherwise, there would be.
Kansas City: City manages Sprint themselves. And, won't give an AMF (subsidy) because the arena is pretty well used, so they don't really need an anchor tenant.
These are mult-million-dollar-a-year considerations.
With Dallas and Chicago, both the NBA and NHL teams were in the old arenas (Reunion and Chicago Stadium) before the new arena was constructed. So, both teams had a Seat at the bargaining table on how to share the arena.
It's a completely different scenario once the arena is constructed and the arena management agreement is signed. It limits the potential owner of the NHL team to either the NBA owner or another party that loves hockey enough to accept being a tenant because there is not much benefit to the NBA owner giving the NHL owner more than what the arena generates in revenue for the hockey event. Financially, that would not make much sense to a prospective NHL owner.
So, if NBA owners like Fertitta in Houston balk at the asking price, then there will not be an NHL team in Houston. Same applies in cities like Portland, Milwaukee, etc. Economics don't really work for an NHL club to not have much control over the arena revenues.
Correct. This is the reason I was singling out the situation in Glendale AZ. Going through the franchises:
Canada:
Van(Owns or operates) Edm(arena rights) Cgy(arena rights) Wpg (owns arena) Tor (owns arena) Ott (owns arena) Mont (arena rights) QC? (Quebecor has rights)
US:
Sea (NHL ownership is equal partner to OVG) SJS(arena rights) LAK (AEG owns) Ana(rights) Vegas (Foley owns part of T-Mobile) Arz (rents from City..NOT from NBA)
Minn (rights) Chi (partial ownership) Den (shared ownership) StL(rights) Dal (shared ownership) Nas(rights)
Bos (owns) Det (owns) Buff(rights) Flo (rights) TBL(rights)
NYR (owns) NYI (rights at Belmont?) NJD? Phil (shared ownership) Pitts (rights) Was (shared rights) Car(rights) Cmb(rights)
I did the above very quickly. But, it seems as if the following is true:
Only the Coyotes have NO arena operating rights at all
Vegas owner Foley has the next least chunk of arena income
Seattle is the only situation in which the team shares with the arena owner
Chicago and Dallas split between NHL and NBA
This, folks, is the reason that the Arizona hockey team wants a new arena. Operating rights, preferably with a disguised subsidy included.
This is also the reason that KC, Milwaukee and a few other places won't get NHL teams. Small markets would require some income from the entertainment side of the business, and none would be forthcoming for the NHL team.
Btw Seattle's arena is city owned with OVG has operation rights but NHL seattle as you said is equal partners. NBA if it returns to Seattle will also be equal partners (given its more or else the same group that owns the NHL + probably a few more investors)
I think Seattle city owns the land. Agreement was for OVG to do a massive renovation and operate the new arena.
I think a similar situation exists for the Rogers Centre. Land is owned by the city.
The building there was always owned by city of Seattle since it originally opened and continued to own it over its renovations and the rebuild that its happening there now. Only the roof is left over from the original structure that existed in 62 for the worlds fair.
Its one reason why construction was allowed to continue during the virus ordeal since its a government facility.
Centrum Hockey
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MLSE owns the raptors and the original plans for scotiabank arena where for a nba only arena. The leafs merged with the raptors ownership group late in the process. If the arena was made with the leaf's in mind from the start it would probably have Nod's to Maple leaf garden's and blue seats.
ArmadilloThumb
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- Apr 20, 2018
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I'll mention again... We have entered uncharted economic territory. Team valuations are uncertain. If they are going to drop *on paper* the expected ask for expansion fees also drops.
The upside to accepting a lower expansion fee is it opens the door to Houston and maybe some other very large markets that, in turn, make the potential value of a new TV deal(s) higher, which then offsets the low expansion fee, and then all helps rebound the average team valuations.
So potentially there is a unique opportunity to fill out some very desirable markets and lay the groundwork for growth. I would add it would be smart to leverage what appears to me Arizona's strategy to pull in the Hispanic market. Adding Houston also drives this, as would a potential 3rd Texas team. Texas will have ~40 Million people in a couple of decades.
Also, remember the NHL only has 25 US franchises in a total of 23 markets.
The upside to accepting a lower expansion fee is it opens the door to Houston and maybe some other very large markets that, in turn, make the potential value of a new TV deal(s) higher, which then offsets the low expansion fee, and then all helps rebound the average team valuations.
So potentially there is a unique opportunity to fill out some very desirable markets and lay the groundwork for growth. I would add it would be smart to leverage what appears to me Arizona's strategy to pull in the Hispanic market. Adding Houston also drives this, as would a potential 3rd Texas team. Texas will have ~40 Million people in a couple of decades.
Also, remember the NHL only has 25 US franchises in a total of 23 markets.
The expansion fee is too darn high to begin with anyways. But the NHL isn't going beyond 32 teams.
KevFu
Registered User
... soon.
You meant to say "soon."
All the sports leagues will expand eventually, it's just a matter of when. You're foolish if you don't think so. Imagine someone in 1975 saying all the leagues are NEVER going past 24 teams. And think about how ridiculous anyone trying to predict life 50 years from now looks in hindsight.
You meant to say "soon."
All the sports leagues will expand eventually, it's just a matter of when. You're foolish if you don't think so. Imagine someone in 1975 saying all the leagues are NEVER going past 24 teams. And think about how ridiculous anyone trying to predict life 50 years from now looks in hindsight.
KevFu
Registered User
You're missing my point. YOU might not see it. In your lifetime, but the NFL is going to have more than 32 teams unless the world ends first.
Not with how its aligned. Basically you would need to add 8 teams and then add more games. Don't think the owners really want that.
anything more than 32, Kev.... triggers another realignment..... that's why there's 8 divisions per conference with a maximum of 4 per division
What the NFL could do is play neutral-site games in non-NFL cities if the stadiums are large enough. They already do so outside the US (which is on hold this year), no reason they can't do it in the US especially considering the NFL is planning to expand to 17 regular season games maybe 18 somewhere further down the road and wants to maintain the balance of 8 home and 8 road games for each team. A number of these "neutral-site" games could actually involve teams that are close to the non-NFL market the games are being played in - like the Browns playing at Ohio State, or the Bears playing at Notre Dame.
Why would you have to add eight teams? For years the NFL had divisions with unequal numbers of teams. Just because they have a tidy 8x4 format now doesn't mean they always will.
IMHO the NFL is far more likely to go beyond 32 teams anytime soon than the NHL. At least as long as the NHL is stuck on its fixation of having each team visit each other team at least once per season.
The NFL, for obvious reasons, has no such hangup. Its fans are used to teams playing certain other teams as infrequently as every four years. Such flexibility makes it much easier to go beyond 32.
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