Be It Seattle or Saskatoon, Relocation Not Expansion is the Way To Go For The NHL

Cities all over North America clamor for major league sports franchises. Obviously, with such a demand, it would make sense that major sports leagues tend to place franchises in the larger population markets. But that hasn’t always been the case, and even today there are exceptions to that convention. Currently, the “magic number” seems to be around two million. In other words, to be economically viable, there has to be a substantial population base that can support a franchise.

Every year, the National Hockey League (NHL) makes noise about expansion, and this year is no exception. The greater Seattle area is a top fifteen U.S. market, and on its face would seem to be a very attractive destination for an expansion team. But there’s a reason why it hasn’t been.

On the other hand, Seattle isn’t the only city that gets mentioned in these talks; Quebec City, Kansas City, Houston, Las Vegas, and Saskatoon keep coming up in these conversations. In terms of types of city, Sasaktoon couldn’t be a bigger departure from Seattle. One is a major seaport and all-around world-class metroplex, and the other is a small city in the heart of the Canadian prairie. That seems to fly in the face of the “population base” angle, but obviously that isn’t the only criteria in play here. After all, the NBA and the NHL both have had success in cities that aren’t huge in terms of population.

That begs the question what really makes for a good market in which to expand? In terms of the NHL, it’s a surprisingly complex question, and one the NHL seems to have already answered. The annoucement came a while back that the NHL is close to finalizing plans to add new franchises in by the 2017-18 season. Let’s take a look at all those options, announced or not, because very few of them are going to work.

1) Lessons Already Learned

The NHL used to love to go back to cities where it failed. The Wild were placed in Minnesota after the North Stars debacle. The Quebec Nordiques were allowed to move to Denver after the Colorado Rockies left town. The Thrashers were placed in Atlanta after the Flames left for Calgary. However, in recent years, the NHL has very much cooled to this concept, and the Atlanta fiasco is one of the main reasons.

Atlanta is the first city to lose two NHL expansion franchises, and it’s damn sure going to be the last in our lifetimes if Gary Bettman and/or his NHL cronies can help it. In contrast, the NBA learned this lesson early on, and had it reinforced by the Charlotte situation. The Hornets left for New Orleans after roughly a decade in the Piedmont, and the NBA knee-jerked by placing the Bobcats franchise in the same city. The Bobcats’ franchise has languished ever since, and the NBA will never recreate that mistake.

As far as the NHL is concerned, for practical purposes this means you can cross Kansas City off the list.

2) The Regional Nature of Hockey, and the Shifting Population of America.

In the 1970’s, the World Hockey Association mounted a serious challenge to the NHL; one so successful that the upstart league essentially forced a merger. This is how the NHL got teams such as the Hartford Whalers, Winnipeg Jets (the first version), and the Edmonton Oilers.

The WHA made its bones by going into markets the NHL ignored, and the NHL couldn’t wait to get some of these markets when the leagues merged. But there was a glaring exception to that; Houston. The Houston Aeros were an albatross around the WHA’s neck, and the NHL didn’t want any part of Texas in the 1970’s. This is why the team was disbanded and not merged into the new combined league.

The reason is simple. Hockey is now, and will always be a sport whose appeal is in places where they actually have winter, or have a large population of people who came from places where they have winter. That takes out Houston, but leaves Las Vegas alive (but on life support) because it has a large transient population.

3) Which is More Effective? Multiple franchises in large cities, or franchises spread out in smaller cities

Case Study: The New York Islanders

The New York Islanders are a microcosm for the entire issue of relocation and expansion issue. Past glory has now faded into an unrecognizable mess, and now they have an owner who has already made the decision to move. This is the last season of hockey on Long Island as the Islanders are moving into the Barclays Center in Brooklyn beginning with the 2015-2016 season. While it may not seem like a big move to travel 20 miles to Brooklyn, anybody whose lived in a large city knows that with traffic, 20 miles sometimes might as well be 200.

That sets up the whole idea of cities with multiple franchises. We’ve already discussed the regional nature of hockey, and obviously there’s a population component, but distance and the time needed to cover that distance is also important. Given those two factors, metropolitan areas like New York, Chicago, and Toronto could easily support multiple franchises. New York proves this; the greater metro area has three team and could probably support a fourth once the Nassau County Coliseum is renovated after the Islanders leave.

Chicago could easily support multiple NHL franchises, and if somebody wanted to move to northern Illinois, there a NHL/NBA-ready arena waiting for them in the Sears Center. Located in the northwest suburbs, a franchise here could easily attract a fan base from the Chicago area and southern Wisconsin, including Milwaukee and Madison.

But the clear winner here for another city which could handle more than one NHL team is Toronto. Awhile back, there was an investigation into why Canadian teams haven’t been able to win the Stanley Cup in over 20 years, an estimation was made as to the number of avid NHL fans in an assortment of major markets, including the locations of existing franchises and potential expansion sites). The numbers broke so hard in Toronto’s favor it was hard to ignore; the Toronto metropolitan area easily had the largest number of self-identified “avid” NHL fans with slightly over 5 million.

That number was over double of any other metropolitan area in North America. Stop and think what that means. Even if the new Toronto franchise lures just 20% of the area’s hockey fans away from the Maple Leafs (who haven’t won anything in 50 years…just saying...), the expansion club would instantly have a fan base equaling that of the Chicago Blackhawks, Los Angeles Kings, or Calgary Flames. The fact that Calgary ranks shoulder-to-shoulder with megalopolises like Chicago and Los Angeles is the testament to the regional nature of hockey fandom. You could fit Calgary into Chicago or Los Angeles 20 times over, regardless it is clear that Toronto has the fan base to support a second NHL franchise.

Case Study: The Winnipeg Jets (both incarnations)

There’s another factor which comes into play here; operating income. The amount of money a team has to actually fund it’s operations is roughly a function of the size of it’s available fan base factored with the actual money it makes. That sounds like an over-simplification, and in a lot of way it is.

To keep it simple, the number of self-identified fans in a media market matters. This is the number of avid NHL followers in its media market, meaning the number of fans most likely to buy tickets, merchandise, and generally support the team financially. The conventional wisdom is the break-even level of self-identified fans needed to drive a profitable franchise was about 300,000 to 400,000 fans. In actuality, the number is closer to 500,000 in Canada, and even higher than that in the United States.

What makes Winnipeg an anomaly in this case is as Canada’ seventh-largest city, it boasts a metropolitan population 780,000, which makes it roughly equal to Baton Rouge, Louisiana. Obviously, one would never dream of putting an NHL franchise in Louisiana, so what makes Winnipeg different? Obviously, it is the fact that hockey is Canada’s national sport, which dramatically skews the percentage of self-identified fans. This is how Calgary rates as much of a hockey town as Chicago. Despite the area’s relatively minuscule population, greater Winnipeg has roughly 560,000 NHL self-identified fans, which is an almost ridiculously high proportion.

What this means is as the smallest NHL market, Winnipeg effectively sets the floor for the market in terms of viability because despite being a small market, the Jets have turned a profit in each of the past two years.

4) The Markets As Opposed To The Number We Already Know

Now that we’ve established some hard numbers, let’s take those numbers and use them as a prism through which to view the remaining markets under consideration.

Saskatoon:

The problem here is simple. With a metropolitan population of only 300,ooo, even if every man, woman, and child in the area were self-identified fans, there are just not enough people to support a franchise. Despite that, the idea of the NHL in Saskatoon simply won’t go away, because there are several millionaires out there willing to bet it is a viable market. With the exception of the Los Angeles Kings, the NHL’s initial franchises in the southern and western United States were ultimately unsuccessful; the Oakland Seals, the Atlanta Flames, the Kansas City Scouts/Colorado Rockies all relocated.

From 1982 until 1991, the Kings were the only U.S.-based NHL franchise south of St. Louis and/or west of Minneapolis/St. Paul. The North Stars left Minnesota in 1993, and the St. Louis Blues required league intervention to prevent being relocated to Saskatchewan.

Despite all that, the fact of the matter remains there are many other cities on the list ahead of Saskatoon when it comes to being a viable NHL market.

Las Vegas:

Las Vegas has been “taboo” to major league sports for years because of the gambling issue. That’s clearly becoming less of a problem since sports gambling has become pervasive via the internet. The problem here is the same as Saskatoon. While Las Vegas boasts a metropolitan population of 2 million, nobody really knows how many of those people are hockey fans. They need the ratio to be one out of four, and that seems wildly optimistic in a city with a huge transient population.

Seattle:

Seattle has two problems. One, there’s the aforementioned fact that hockey really only works in places that have real winter or have large transplanted populations from such areas. The second is just a shift in the odds from the Las Vegas issue; in Seattle’s case the metro area has a population of 3.7 million, which means to make the magic number of half a million dedicated hockey fans one out of seven people needs to be a hockey fan. I’m not familiar enough with the Seattle market to know if that is a realistic number.

If it is, so be it. If not, it confirms my suspicion that Seattle is another Atlanta or Los Angeles; a “fair-weather” market full off fans who jump on the bandwagon when the won-loss record dictates. This is the part where I need Neil Roberts to make a case for Seattle as a hockey town.

Quebec City:

One would think I would have fouled Quebec City out on point #1. The reason why I can’t is the former home of the Nordiques has about 530,000 self-identified NHL fans. That makes Quebec City very comparable to Winnipeg . Yes, I remember Winnipeg and Quebec were the two Canadian cities that lost NHL franchises in the 1990s, but I also remember that American cities in traditionally hockey-strong areas did as well. It was far more understandable from a market perspective that a team would leave Hartford, but an NHL that couldn’t keep a franchise in Minnesota had much bigger issues than market size.

Specifically, all those markets I just mentioned were all abandoned in favor of larger markets. Now, all the larger markets where hockey could work are occupied, with the sole exception of Seattle, unless somebody really wants to take on the idea I’ve mentioned that several markets could support multiple franchises.

Toronto:

The NHL is the dominant professional league in Canada, and Toronto is the dominant Canadian market. As such, Toronto is the flag-ship for the “multiple-franchise” market concept. Obviously, that concept already has working examples as mentioned in point #3.

It is pretty obvious this model is the way to go for the NHL. First, it works in every other sport. There are several market with more than one baseball team, more than one basketball team, and more than one football team. Secondly, it is time to admit hockey is a regional sport, and as such it is time to stop with the “square peg in the round hole approach” by forcing franchises into markets hoping a fan base will grow. In other words, In other words, if there’s support for two or more franchises in Toronto, then there’s no reason why there shouldn’t be that many franchises there. The bottom line is its time to admit the NHL already has enough franchises; its’ time to put them in places where they can succeed financially.

Toronto isn’t the only place where this model would work, but it is the best. Once renovated, The Nassau County Coliseum which is being abandoned by the New York Islanders would make a perfect new home for a team struggling in a bad hockey market. There’s the aforementioned NHL-ready arena in the northwest suburbs of Chicago. The “Inland Empire” area of southern California, despite being in the shadows of Los Angeles and Orange County is a market of 2+ million which is dying for its own professional franchise. The question is this: is it better to split a tremendous market, or have sole ownership of a a lousy one?

Conclusion:

When the World Hockey Association and the NHL merged in the late 70’s, the NHL inherited teams in three Canadian metropolitan areas which at the time had populations under 1 million; Edmonton, Winnipeg, and Quebec City. The league later added teams in Calgary (via relocation from Atlanta) and Ottawa (via expansion). At it’s height, the NHL had 8 franchises north of the border; the five I just mentioned along with Toronto, Montreal and Vancouver.

Then came the 90s and a distinct downturn in the Canadian economy. For the longest time, it was the unique place hockey holds in Canadian culture which allowed many of these franchises to remain viable regardless of the economic disadvantage. Eventually, the financial pressures won out, which made Winnipeg and Quebec City the “canaries in the coal mine” when it came to the viability of Canadian hockey. That’s what made U.S. market like Phoenix look attractive. That led to other franchises looking for greener pastures as well, which is how the NHL ended up with teams in places which really should have never had them, like Raleigh, Tampa, Miami, and the aforementioned Phoenix.

But now, those economic concerns are no more; the “small” Canadian markets (Calgary, Edmonton, Winnipeg, and Ottawa) are very viable largely because those markets are growing rapidly; Winnipeg is the sole exception for having a metropolitan population of over 1 million. What it means is a market size which would support minor-league hockey in the U.S. such as Salt Lake City, Jacksonville, and Memphis instantly becomes major-league capable once it moves north of the border.

So, where does that leave us when it comes to the end of the expansion/relocation spectrum?

First of all, relocation is a terrible idea, because the NHL already has more teams than it does suitable markets. That’s exactly why NHL commissioner Gary Bettman and his cast of pinheads will do it.

That leaves relocation and the aforementioned ends of the spectrum.

On the small end, there’s Saskatoon. While I think Saskatoon could be an awesome venue for big-league puck; it very well could be the NHL’s answer to Green Bay. the trouble is that Green Bay still exists as a home to the NFL because that league has a river of shared revenue the NHL lacks. Green Bay could never support itself as a big-league franchise without that money, and Saskatoon has exactly the same problem.

On the big end there’s Seattle. Like I said, I would never support NHL expansion given the current situation, but I’m open to being convinced the Emerald City is a viable NHL market. I’ve mentioned four franchises which could easily upgrade in terms of market, and I’ve already mentioned four markets which could easily support an NHL franchise. I’m torn on Seattle; I can make equally convincing pro and con arguments. On one hand, a market of over 3.5 million people should be suitable for the NHL. But then again, there’s a reason why the NHL has no interest in Houston, which is a far larger market. Seattle and Houston share some similar problems.

The bottom line is hockey is a sport with regional appeal. Like I ‘ve said, hockey is now, and will always be a sport whose appeal is in places where they actually have winter, or have a large population of people who came from places where they have winter. That takes out Houston for sure, and punches a pretty good hole in Seattle’s suitability, but it isn’t a death blow like it is for Houston.

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