One overriding question drove the deliberations by the executive committee of NHL governors that unanimously recommended expansion to Las Vegas for the 2017-18 season: Is it worth accepting a one-time payment of $500-million in exchange for a smaller slice of the league's shared-revenue pie in perpetuity?

The nine governors, led by board chairman Jeremy Jacobs of the Boston Bruins, decided it was, according to many media reports. The entire 30-team board of governors will formally vote to admit Las Vegas at their meeting on June 22. A two-thirds majority of the 30 teams is needed to approve any expansion but NHL tradition is the full board rubber-stamps any recommendation from the executive committee.

This means the Quebec City bid, backed by media giant Quebecor, will be kept on the sidelines, with relocation of an existing franchise being its best route into the league, according to multiple sources.

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The minimum fee to join the league has already been set at $500-million (all currency U.S.).

While the final vote is expected to follow the usual NHL protocol with no dissenters voting against it, there were signs this expansion decision was more contentious than the ones that saw the league grow from 21 teams in 1991 to 30 by 2000. Some of the more prosperous NHL teams do not see the need to expand and cited several reasons, from the uncertain status of the Canadian dollar to competitive and geographic balance.

What follows is a look at the major factors that went into the executive committee's decision. No one from either the league or the NHL Players' Association was available to discuss the issues. NHL deputy commissioner Bill Daly could not be reached for comment. NHLPA executive director Donald Fehr declined to comment other than to say through a spokesman that finalizing an agreement with the players on expansion "is not expected to be an issue."

Revenue sharing

This question pits wealthy teams against less-flush peers. In the past, expansion was approved with the backing of owners who could not wait to get their hands on an easy cash infusion. Among other things, it meant they did not have to go to their bankers for as much money to prop up their struggling franchises. However, long-time owners recall that some expansion teams quickly ran into trouble (such as the Atlanta Thrashers), as did relocated teams (Arizona Coyotes), and they soon needed league help to stay alive.

Since the NHL and the NHLPA signed the current collective agreement in January 2013, hockey-related revenue (HRR) has soared thanks to rich new television contracts with NBC and Rogers Media, and events such as the outdoor games.

It is estimated each team receives about $25-million per season in shared revenue, not including the supplementary funds dispersed to the NHL's needier teams. But after taking a large jump to $3.7-billion in 2013-14, the first full season after the 2012-13 lockout, the growth of annual revenues has slowed due to the sluggish North American economy as well as a weakened Canadian dollar.

Sources says that some of the wealthy teams argued the league should think hard about taking on more teams, especially if one of those new teams looks like it might soon be a net drag on shared revenues.

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The Canadian dollar

During the wave of expansion in the 1990s, the value of the Canadian dollar slowly declined from 89 cents U.S. in 1991 to 69 cents by the end of the decade. As a result, struggling teams in Quebec City and Winnipeg moved to Denver and Phoenix, respectively.

The loonie kept falling in the early 2000s, hitting a low of 62 cents in 2002, but by 2005 it began to stabilize. And as commodity prices, energy in particular, improved and the U.S. dollar weakened, the loonie gained strength. When the collective agreement was reached in January 2013, the Canadian dollar was at $1.01 U.S.

By that time, Winnipeg was back in the league – the Thrashers relocated there after years of poor attendance and huge financial losses in Atlanta. With seven Canadian teams and a strong dollar, as much as 35 per cent of the NHL's revenues came from north of the border.

The peak of the good times may have been that day in November, 2013, when Rogers Media bought the Canadian national broadcast rights in a 12-year, $5.2-billion (Canadian) deal with the NHL. At the time, the loonie was worth 94 cents U.S. But when commodity prices collapsed, so did the Canuck buck, briefly dipping below 70 cents this past January. It had a commensurate effect on NHL revenues, especially since the Rogers deal is paid in Canadian dollars.

The Canadian dollar has recovered somewhat (sitting just under 78 cents on Wednesday). But it has not been enough to convince the mostly American NHL owners that Quebec City is a viable bet, despite an eloquent pitch from former Prime Minister Brian Mulroney, now chairman of Quebecor, who assured governors that the city's economy is much stronger than it was two decades ago, when the Nordiques left for Denver.

Competitive balance

According to multiple sources, competitive balance was the subject of much debate among the governors. Traditionally, professional leagues love to take huge expansion fees from new owners and then give them the dregs from their rosters in the expansion draft to stock their teams, ensuring the newcomers will take many seasons to become competitive.

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But Bettman does not want to see an expansion team such as Las Vegas poison its own market by sitting at the bottom of the standings for the better part of a decade. The Thrashers, for example, joined the NHL in 1999 and made the playoffs only once before moving to Winnipeg in 2011.

Who's heading the Las Vegas bid? The newest prospective owner for the NHL is an ex-military man from Texas who learned to love hockey as a child when his father, a high-ranking U.S. Air Force officer, was stationed in Ottawa for a few years. Now that Bill Foley went from West Point grad to lawyer to chairman of Fidelity National Financial, the largest title insurance company in the U.S., he can afford to found his own NHL team, in this case the proposed expansion franchise for Las Vegas. He also owns a wine company and a restaurant conglomerate among other businesses. Foley will be the majority owner of the Las Vegas team, while the Maloof family, five siblings who once owned the NBA’s Houston Rockets and Sacramento Kings, are the minority partners.

So, the NHL commissioner has insisted that, in the expansion draft, existing teams must make some good players available. This did not go over well with a lot of owners and especially with their general managers, whose job security rests on keeping their teams competitive.

While first- and second-year players will be exempt from the draft as a sop to current teams, they will have to protect at least some of the players with no-move contracts. Teams also have to expose at least two forwards and one defenceman who played 40 games in the 2016-17 season or 70 games in the previous two seasons.

Teams will not be allowed to reacquire players that were traded between Jan. 1, 2017 and Jan. 1, 2018, which means they cannot hide anyone with another organization before the expansion draft.

This means a few good young players will be exposed to the incoming team.

Financial stability

This is no longer the problem it was in the 1990s when some dodgy characters were allowed to acquire teams in the rush to grab the expansion fees. As noted in the accompanying stories, those in charge of both the Las Vegas and Quebec City bids have all the money needed to support a team.

Balancing the conferences

Ideally, the owners would like a 32-team league with 16 teams in each conference rather than the current 14 in the Western Conference and 16 in the Eastern Conference. Like the Canadian dollar, this issue hurt the Quebec bid. The league does not want to see 17 teams in the Eastern Conference.

Nor does Bettman want another round of bitter wrangling among the owners like what happened ahead of the 2013-14 season when the Detroit Red Wings and Columbus Blue Jackets moved to the east and Winnipeg went west. Thus the easy decision was to increase the Western Conference by one team, and leave Quebec to find an existing franchise to relocate.

Who's heading the Quebec City bid? If Quebec City gets back in the NHL, the team will be owned by a giant media company rather than an individual, although there is no shortage of colourful personalities among the heads of Quebecor Inc. The most notable is Pierre Karl Péladeau, who stepped down as chairman of Quebecor in 2013 to become leader of the separatist Parti Québécois. However, he refused to sell his shares in Quebecor and quit politics last month to spend more time with his children. Péladeau, known for his fiery behaviour as a corporate boss has not announced his intentions but his friends have said they believe he will return to the company. The current chairman of the board for Quebecor and the man who led the presentation of the company’s expansion bid to the NHL, is former Canadian Prime Minister Brian Mulroney.

The NFL



Daly insisted to reporters recently the potential move of the NFL's Oakland Raiders to Las Vegas would not play a role in the governors' decision. However, since Las Vegas does not have any major-league teams at present, and is a comparatively small market (it would be 30th in the U.S.), being the first league to arrive there would be an advantage. And the prospect of competing with a behemoth like the NFL cannot be appetizing.

Editor's note: An earlier version of this story incorrectly said the Rogers Media broadcast contract is a 12-year, $4.9-billion Canadian deal. It's actually $5.2-billion Canadian.

