In one of the first articles I wrote on this blog after the NHL officially announced its last expansion, was that the NFL, NBA, and MLB would be closely watching how the new NHL expansion developed. All had reasons to do it. Since the Mortgage Meltdown which dampened enthusiasm for expansion, none of the “big 4″ North American sports leagues had expanded for more than a decade.
Before the meltdown, it had seemed inevitable that all four sports leagues would realign into an NFL type structure and then expand to the next symmetrical number of 40 teams, 5 teams to a division. But the economic troubles have postponed expansion and the NHL was the first league to renew interest in a drive to become a 40 team league.
The arrogant NFL which seems committed to remaining a 32 team, 4 division league and prefers to strip its existing franchise cities of their teams and move them elsewhere, would show the least interest. But the NBA and MLB, which were both stuck at the awkward number of 30 teams like the NHL and needed to realign into the NFL structure with the symmetrical number of 32 teams, a prelude to expanding further later, had a special reason to watch the new NHL expansion closely.
Since the last time a league expanded was well over a decade ago, they would be paying close attention to the amount of expansion fee, the NHL would charge. They would be interested in how many teams the NHL wants to expand by. They would want to know how many bidders the NHL’s terms would attract and from which cities. They would want to know how many bidders would fully commit themselves. They would pay attention to fan ticket drives and the all important factor of new arenas/stadiums.
The NHL’s last attempt at expansion was a major failure, probably because they set an expansion fee of $500 million, plus a $10 million “consideration fee” which the investment world found unrealistic. Only fanatical Quebec and Las Vegas stuck it out to the end, and the Quebec bid was rejected because the NHL found the potential owner unsuitable. For this NHL expansion, there were no competing bids from rival cities. For this expansion, the NHL had to settle for what they could get. In the end, all they got was Las Vegas which increased the league to 31 teams, one short of realignment.
Before the NHL announced expansion, most media and Internet websites were reporting that there were 4 “done deals” already on the table, Seattle, second Toronto, Las Vegas, and Quebec. So what happened was a major disappointment for the NHL. As mentioned in the previous article in this series, the NHL was probably also trying to change its status in the United States; lots of bids for teams with that $500 million fee would confirm that NHL’s status in the United States was now at least closer in stature to the other three leagues. Instead all that was reconfirmed was that NHL remains number 4 in the US, maybe by a considerable margin.
Now comes the news that MLB wants to eventually take the plunge and become a symmetrical league of 32 teams in an NFL type structure. The new franchises seem to be a returned Montreal Expos and a new expansion city.
Now it will be the NHL’s turn to watch. The same factors listed above will command the NHL’s attention. What is the value of an MLB team? Can or will they set a $500 million expansion fee or higher? Or is there a lesson to be learned from the NHL’s expansion which is that North American sports leagues expansion fees should be lower?
Certainly the result will be another way of determining the status of the NHL in the United States. How close are they to the status of Major League Baseball? If the NHL is now closer in stature in the United States to MLB, it means that the NHL can negotiate for a much higher contract from American television once their current contracts expire. But if the results go the other way, will this be another humiliation, another black eye in the story of the struggle to make hockey popular in the United States? That MLB successfully expanded by two cities to the NHL’s one. That MLB had lots of bidders for the two new teams while the NHL had no competition at all and had settle for what it could get. That MLB can realign easily while the NHL cannot. That the NHL does not merit a big increase in American television revenue and coverage.
Hockey fans that don’t usually pay attention to baseball now have a real reason to watch MLB expansion. What happens will not only tell something significant about MLB, it will also shed light on the status of the NHL in the United States.