On June 24th the NHL Board of Governors approved to explore expansion. The NHL’s worst kept secret about plans for expansion has now gone public. For about the past two years is seems Gary Bettman has said they had no plans for expansion even though Las Vegas was doing a Season Ticket drive this past season, which they received over 10,000 deposits.
The applications became available to perspective teams yesterday, July 6th. The application process ends on August 10th. The application fee is $1 million.
The NHL has not expanded since 2000-2001. The rumor is the Expansion fee will cost the up to $500 million. I think all hockey fans assumes there will be 2 teams added. The NHL says if they expand it will not be until the 2017-2018 season.
Although I think the NHL should move a couple of teams out of their current markets, expansion will be a good thing for both the Players and the Owners. The owners do not have to share the $500 million expansion fee with the players, but with two new markets it will increase the League’s Revenue. With two new markets the overall attendance of NHL games will increase, so more ticket revenue. You also have to consider local TV deals and apparel sales. Adding two US markets would give the NHL more negotiation power for their next TV deal with NBC, or potentially ESPN. With all that being said higher revenue for the NHL means a higher Salary Cap, which means higher player salaries.
The list of potential locations is long, but due to the application fee and the projected expansion fee the NHL has weeded out the dreamers. One city that was rumored on the list, but they have no chance of getting a team, was Milwaukee. I find this situation as interesting because it is rumored if the Milwaukee Bucks do not get a deal with the state legislature for funding for a new arena they could be on the move to Seattle or Las Vegas, which happens to be the two prime locations for NHL expansion. Vegas will have a 20,000 seat arena built by 2016, and as mentioned above they received over 10,000 season ticket commitments when they did the Season Ticket drive, but Vegas is the 41st TV market in the US. Seattle on the other had is the 14th TV market in the US. The only problem is they do not have an arena, but if the Milwaukee Bucks move to Seattle this would help get a new arena built in Downtown Seattle. There is another group that is proposing building an arena in the Seattle suburb of Tukwila. Downtown arenas are much better than ones in suburbs, just ask the Coyotes. Other rumored cities for an expansion team are Quebec City and another team in Toronto.
I do not think that there is a lack of talent to fill these teams. There are enough talented hockey players who play in the AHL, European Elite Leagues and the KHL to fill out the team to quality players and the level of play will not suffer. There are players in the AHL who should be playing in “The Show,” but are blocked by other players. The KHL has financial issues due to the Russian Ruble. The one issue I see for the talent level issue would be the level of goalie play. Right now there are 30 NHL teams and not every team has a quality starting goalie. The moves for goalies this off season is proof of this. Teams are trading for backup goalies and hope they will be their starter because they did not have a quality goalie in the first place.
Expansion is coming and with the Salary Cap it should make for an interesting expansion draft.