The NHL will not be returning to KC

[ScottM]

 

http://sports.yahoo.com/blogs/nhl-puck-daddy/kansas-city-not-in-nhl-expansion-hunt--despite-past-attempts--155312472.html

 

With an expected expansion fee of $500 million and an application fee of over $1 million, it looks like there will be no application for an NHL franchise coming in from Kansas City. Apparently, Lamar Hunt, Jr. pretty well speaks for all the possible owners in town when he said that the fees are "ridiculously big." He has no plans of applying, saying, "It's not on my radar."

 

I wonder how many other prospective owners might be scared away by the amount the league is asking for.

[radoran]

Well, there's $16.67M reasons (times two) that the current NHL owners might support expansion.

 

As opposed to the $0 reasons against...

[notfondajane]

I'm hoping to see a team in Kansas City. It would be a nice in state rival to Saint Louis!

[WordsOfWisdom]

I always get a kick out of the "expansion fee". What exactly does that pay for? Nothing you say? Oh, okay. Expansion fees are the world's greatest scam.

 

If someone wants an NHL team, the only thing they need to pay for are the players and the arena they will play in. Half the time the taxpayers end up paying for the arena.

 

Again... what a business model. The NHL is basically saying "pay us 500 million dollars and we'll allow you the ability to then buy an NHL team".

 

[TropicalFruitGirl26]

@WordsOfWisdom

 

Think of it like a VERY steep admissions or cover charge to get in.

 

If you thought getting into the Bongo Club in NYC was difficult and expensive, let me introduce you to the Bettman cover charge....hehe

[teenagemutantninjahertl]

But where is the NHL actually going to expand?

 

Vegas is almost a sure thing.

 

Milwaukee? Not if the Bucks leave. If they do leave (to Vegas), Vegas makes a lot more sense.

 

Toronto? Not if the Leafs say no.

 

Quebec City? Been there, done that. Still possible.

 

Seattle? No one is talking about it.

 

Portland? If you think the Trailblazers are staying, maybe.

 

Hamilton? Same boat as Toronto Part II, but with the Habs and Sabres.

 

KC already a no.

 

Regarding the fee, I understand why it doesn't make a whole lot of sense for it to be so high. The last teams came in for $80 million. I wouldn't be surprised of the fee was lowered at some point. Still, it will be outrageous. Like the application fee of $1 million, the league is trying to scare off people who aren't serious.

[ScottM]

Most of the talk I've seen around the Internet centers around Vegas, Seattle, Quebec, and Toronto. KC, Houston, and Milwaukee look like no goes. The league won't let Hamilton happen in all likelihood. Portland and Hartford are mentioned as potential dark horses, but I think it'll come down to those first four.

[WordsOfWisdom]

But where is the NHL actually going to expand?

 

Vegas is almost a sure thing.

 

Milwaukee? Not if the Bucks leave. If they do leave (to Vegas), Vegas makes a lot more sense.

 

Toronto? Not if the Leafs say no.

 

Quebec City? Been there, done that. Still possible.

 

Seattle? No one is talking about it.

 

Portland? If you think the Trailblazers are staying, maybe.

 

Hamilton? Same boat as Toronto Part II, but with the Habs and Sabres.

 

KC already a no.

 

Regarding the fee, I understand why it doesn't make a whole lot of sense for it to be so high. The last teams came in for $80 million. I wouldn't be surprised of the fee was lowered at some point. Still, it will be outrageous. Like the application fee of $1 million, the league is trying to scare off people who aren't serious.

 

• Vegas is the likely destination for the Coyotes when the NHL finally decides to stop beating that dead horse. But it's only going to be another short term "experiment" before that dies too.
• Milwaukee is a small market at the best of times and might be a very tough sell. Then again, the NHL and beer go hand in hand...
• Toronto would be a no-brainer if not for the Leafs. The Leafs will veto/block any team from coming into the GTA. They own that territory and it's like owning Boardwalk and Park Place on a Monopoly board game.
• Quebec City is a strong choice. It would create a "battle of Quebec" again, and hockey can thrive here. This will happen -- guaranteed.
• Seattle would be the best choice for an American city. Great location. Big market.
• Portland? Who knows?
• Hamilton infringes on two NHL territories: Leafs and Sabres. Nobody on earth could afford to pay the territorial rights fees for two NHL clubs.

 

So basically, I think the winners are Quebec City and Seattle... by a mile. I also think both cities will get a team through relocation, not through expansion. 

[teenagemutantninjahertl]

 

• Vegas is the likely destination for the Coyotes when the NHL finally decides to stop beating that dead horse. But it's only going to be another short term "experiment" before that dies too.
• Milwaukee is a small market at the best of times and might be a very tough sell. Then again, the NHL and beer go hand in hand...
• Toronto would be a no-brainer if not for the Leafs. The Leafs will veto/block any team from coming into the GTA. They own that territory and it's like owning Boardwalk and Park Place on a Monopoly board game.
• Quebec City is a strong choice. It would create a "battle of Quebec" again, and hockey can thrive here. This will happen -- guaranteed.
• Seattle would be the best choice for an American city. Great location. Big market.
• Portland? Who knows?
• Hamilton infringes on two NHL territories: Leafs and Sabres. Nobody on earth could afford to pay the territorial rights fees for two NHL clubs.

 

So basically, I think the winners are Quebec City and Seattle... by a mile. I also think both cities will get a team through relocation, not through expansion. 

 

 

Have you been paying attention to the Arizona saga? This isn't about owners keeping it in Arizona. They owners want to keep it there, it's just a matter of a stadium lease.

 

Milwaukee is an intriguing hockey market. They have a huge AHL following. They would have a huge "little brother" complex with Chicago. Hockey is surprisingly big in Wisconsin (thanks U of Wisco, Blackhawks success, and homegrown talent).

 

Seattle or Portland. They both have stadiums.

[hf101]

 

• Vegas is the likely destination for the Coyotes when the NHL finally decides to stop beating that dead horse. But it's only going to be another short term "experiment" before that dies too.
• Milwaukee is a small market at the best of times and might be a very tough sell. Then again, the NHL and beer go hand in hand...
• Toronto would be a no-brainer if not for the Leafs. The Leafs will veto/block any team from coming into the GTA. They own that territory and it's like owning Boardwalk and Park Place on a Monopoly board game.
• Quebec City is a strong choice. It would create a "battle of Quebec" again, and hockey can thrive here. This will happen -- guaranteed.
• Seattle would be the best choice for an American city. Great location. Big market.
• Portland? Who knows?
• Hamilton infringes on two NHL territories: Leafs and Sabres. Nobody on earth could afford to pay the territorial rights fees for two NHL clubs.

 

So basically, I think the winners are Quebec City and Seattle... by a mile. I also think both cities will get a team through relocation, not through expansion. 

 

 

You forgot Proctor, Minnesota on your list.  

 

From the Grand Forks Herald:

 

Although a lot of people were skeptical about his idea to pursue an NFL franchise, White said many of those skeptics were more accepting of the idea of an NHL team. People took issue with the NFL concept because of the size of the stadium that would be needed, while attendance at professional hockey games is less than football, White explained. The Minnesota Wild's average attendance is around 18,000.

 

White noted that Minnesota Wild fans travel from around northern Minnesota south to the Twin Cities to see the games -- and their money goes into the metro's economy when it could be staying in northern Minnesota. Additionally, it would mean less travel time for fans, he said, pointing out that residents of Grand Forks, N.D., would need to drive 50 miles less if they were going to Proctor than Minneapolis.

[WordsOfWisdom]

 

You forgot Proctor, Minnesota on your list.  

 

Team name: the Proctor Gambles! Nice! 

[WordsOfWisdom]

Have you been paying attention to the Arizona saga? This isn't about owners keeping it in Arizona. They owners want to keep it there, it's just a matter of a stadium lease.

 

 

Yes, for over five years now. 

 

The last Coyotes owner went bankrupt. The NHL took over control of the team (rather than allow it to be bought by Jim Balsillie and relocated). The NHL owned and operated the club for years in Arizona until they could find another sucker owner to buy it. They also added a bunch of new stipulations to the purchase agreement to prohibit the new sucker owner from relocating the team. On top of all that, the NHL has managed to blackmail threaten bully convince the city council in Glendale into continuing to fund that arena and have the Coyotes in it when the city wanted them gone.

 

Basically, the NHL has done something in Phoenix/Glendale that they have never done before: They kept a bankrupt franchise in its current location without an owner, and are now in a legal battle with the city over the lease agreement on the arena. If it were anywhere else, the NHL would have cut and run out of there so fast they would leave skid marks from the U-Haul trucks. For whatever reason, Phoenix is like the NHL's Vietnam.

[radoran]

If someone wants an NHL team, the only thing they need to pay for are the players and the arena they will play in.

 

Which is obviously wrong. If someone wants an NHL team then they have to pay the NHL to get one and the NHL needs to approve it. It's not like someone can just throw a team into Saskatchewan and the league will start scheduling games there. Otherwise there would be a team in Hamilton.

 

In order to join the cartel that has created the league and thus the platform upon which each team plays, there is an entrance fee.

 

Lamar Hunt is saying it's stupid and he won't pay it to bring a team to Kansas City.

 

Other places - and I'll wager Quebec and Hamilton (if anyone let them) would be rushing to give the league $500M - are willing to pay it.

 

If they're not the league will do one of two things: not expand or lower the fee until someone ponies up the money.

 

Franchises need to pay to get in. You can't just start up a restaurant and call it "McDonald's" or a donut shop and call it "Tim Horton's".

 

There is a cost that comes with associating yourself with that brand.

[WordsOfWisdom]

Which is obviously wrong. If someone wants an NHL team then they have to pay the NHL to get one and the NHL needs to approve it. It's not like someone can just throw a team into Saskatchewan and the league will start scheduling games there. Otherwise there would be a team in Hamilton.

 

In order to join the cartel that has created the league and thus the platform upon which each team plays, there is an entrance fee.

 

Franchises need to pay to get in. You can't just start up a restaurant and call it "McDonald's" or a donut shop and call it "Tim Horton's".

 

There is a cost that comes with associating yourself with that brand.

 

Drawing comparisons between restaurant chains and the NHL is dodgy at best because the NHL doesn't operate like a typical franchisor. When you buy a McDonalds franchise, the company provides you with everything you need other than staff. They advertise for you, set your menu, your prices, the whole sha-bang. 

 

I suspect that rival leagues like the KHL get formed when someone does exactly that: They decide that they will buy an arena and players and make their own team without the input of the NHL.

[radoran]

Drawing comparisons between restaurant chains and the NHL is dodgy at best because the NHL doesn't operate like a typical franchisor. When you buy a McDonalds franchise, the company provides you with everything you need other than staff. They advertise for you, set your menu, your prices, the whole sha-bang. 

 

Franchises of any sort need to pay to get into the company. It's the way it works whether a restaurant or a sports team or a spa or a hotel or any franchise.

 

The league wants to make sure that a franchise has the ability to field a team and compete in the league - and fits into the league's structure and represents the league to the standard the league sets. One way they do that is the entrance fee. If you can't afford the fee, you can't afford the team - is their reasoning.

 

I suspect that rival leagues like the KHL get formed when someone does exactly that: They decide that they will buy an arena and players and make their own team without the input of the NHL.

 

Anyone can start up their own league and have their own rules and run with it. If they want to be a part of the NHL you have to follow the NHL's rules.

 

But that's not what you said:

 

If someone wants an NHL team, the only thing they need to pay for are the players and the arena they will play in.

 

Which, again, is fundamentally wrong in every important respect.

 

The (latest version of the) WHA could have existed - but it didn't. And, just for the record, there was a franchise fee to get into the WHA. And there is a franchise fee to get into the KHL.

 

It's not like someone can start up a team in Dubuque, Iowa and declare themselves "part of the KHL" just because they have a rink and a beer league.

[ScottM]

FWIW, I do understand Hunt's point. Half a billion dollars is a ton of money, That's more money than I'll ever see in my lifetime. But the thing is, if you put a good product on the ice in a good market, you'll be rolling in cash soon enough. It's an investment, and only serious inquiries need apply.

[WordsOfWisdom]

Franchises of any sort need to pay to get into the company. It's the way it works whether a restaurant or a sports team or a spa or a hotel or any franchise.

 

The league wants to make sure that a franchise has the ability to field a team and compete in the league - and fits into the league's structure and represents the league to the standard the league sets. One way they do that is the entrance fee. If you can't afford the fee, you can't afford the team - is their reasoning.

 

 

 

 

Anyone can start up their own league and have their own rules and run with it. If they want to be a part of the NHL you have to follow the NHL's rules.

 

But that's not what you said:

 

 

 

 

Which, again, is fundamentally wrong in every important respect.

 

The (latest version of the) WHA could have existed - but it didn't. And, just for the record, there was a franchise fee to get into the WHA. And there is a franchise fee to get into the KHL.

 

It's not like someone can start up a team in Dubuque, Iowa and declare themselves "part of the KHL" just because they have a rink and a beer league.

 

What I meant was, the "expansion fee" is just made up BS. The only "real" cost to owning an NHL team is arena and players. Everything else is just baloney.

 

[radoran]

What I meant was, the "expansion fee" is just made up BS. The only "real" cost to owning an NHL team is arena and players. Everything else is just baloney.

 

Except that you need to pay the expansion fee before you can pay the next two...

[WordsOfWisdom]

Except that you need to pay the expansion fee before you can pay the next two...

 

Not necessarily. When enough potential owners take a pass and the NHL gets desperate enough, they will quietly waive those fees.

 

Most new owners simply wait for a team to fail, buy it, and then relocate it where they want it. Only the dumbest of dumb owners will pay the NHL's expansion fee. You see what I'm saying right?

 

Effectively, the NHL has no leverage that they can apply here. They NEED owners, the prospective owners DON'T need the NHL. The number of people with a billion dollars burning a hole in their pocket is very small. These people can invest their money in much more lucrative ways than dealing with the hassle and relatively low returns of an NHL franchise. Any potential owner of a team in Kansas City knows that the team will never generate any serious revenue. The ROI is almost 0. So I'd rather spend 500 mil somewhere else if I had it.

 

Keep in mind, the NHL is asking for 500 mil to get in, then 250 mil for an arena, and then another 100 mil on players and staffing for a franchise that might make 10-20 million a year in profits if they're lucky. That's a long time to wait before you reach the break-even point let alone make any money. It's not worth it, and it's easy to say no.

[AlaskaFlyerFan]

Milwaukee is an intriguing hockey market. They have a huge AHL following. 

 

Huge?  I would say average.  They are consistently around #11 in AHL attendance.  

 

Gauging whether a city could/would support an NHL team on AHL attendance or following probably isn't a good measuring stick. Otherwise, we'd be talking about Hershey and Cleveland getting NHL teams.

[teenagemutantninjahertl]

Huge?  I would say average.  They are consistently around #11 in AHL attendance.  

 

Gauging whether a city could/would support an NHL team on AHL attendance or following probably isn't a good measuring stick. Otherwise, we'd be talking about Hershey and Cleveland getting NHL teams.

 

Have you been to Milwaukee? Cause I have. It's loud, it's exciting. They could improve attendance, for sure, but an NHL team would have higher attendance anyways. Milwaukee would have more attendance than Florida or Arizona.

 

Cleveland might be a good market, given that they have a good population and a stadium, except that was tried and failed.

 

Hershey could work too.

 

None of the cities are going to get a team, unless something radical happens.

[jammer2]

`  Don't know if anyone mentioned it, but perhaps the expansion fees are so high that it would scare away the pretenders. If you are worried about the 500 mill, the nhl is not for you! They don't want guys who are worried about turning a profit, they want people so outrageously rich that it's a toy for them, a matter of prestige.

[radoran]

Most new owners simply wait for a team to fail, buy it, and then relocate it where they want it. Only the dumbest of dumb owners will pay the NHL's expansion fee. You see what I'm saying right?

 

I don't disagree at all. The facts are, however, that the team being relocated has already paid the fee. Thus, a fee of some sort was required to enter the league in the first place. You see what I'm saying, right?

 

Effectively, the NHL has no leverage that they can apply here. They NEED owners, the prospective owners DON'T need the NHL.

 

The NHL has all the leverage in the world here. That's why the Hamilton Coyotes aren't owned by Jim Ballsilie.

 

Again, the point was whether the league "could" charge a franchise fee. It can. It has. It does. It will.

 

And it will approve any new owners and any new locations under whatever terms they can agree upon with prospective owners

[WordsOfWisdom]

I don't disagree at all. The facts are, however, that the team being relocated has already paid the fee. Thus, a fee of some sort was required to enter the league in the first place. You see what I'm saying, right?

 

 

 

 

The NHL has all the leverage in the world here. That's why the Hamilton Coyotes aren't owned by Jim Ballsilie.

 

Again, the point was whether the league "could" charge a franchise fee. It can. It has. It does. It will.

 

And it will approve any new owners and any new locations under whatever terms they can agree upon with prospective owners

 

Do we know if every team paid an "expansion fee" upon entering the NHL? 

 

I know what you're saying, and I realize the NHL is trying to charge this make-believe fee. I'm just saying only a fool of an owner would pay it.   

[radoran]

Do we know if every team paid an "expansion fee" upon entering the NHL?

 

Let me Google that for you.

 

Aside from, perhaps, the Original Six? Yes. And the Original Six created the league.

 

PHILADELPHIA -- Joe Scott, a businessman who helped found the Philadelphia Flyers, has died. He was 93.

Scott, one of Flyers chairman Ed Snider's partners when the team began in 1967, died June 23 of natural causes.

He built Scott & Grauer of Philadelphia into the world's largest beer distributorship. At age 58, while in retirement in Florida, Scott accepted an offer from Snider to help him launch the Flyers.

He assisted Snider in securing the $2 million franchise fee that guaranteed Philadelphia an NHL team. He went to six banks before one came through.

 

That's about $14M in today's dollars.

 

In 1996, Ed Snider sold the franchise to Comcast (and continued to run it) for $160M. An 80x return on his franchise fee.

 

The team value in 2009, according to Forbes, was $273M.

 

I know what you're saying, and I realize the NHL is trying to charge this make-believe fee. I'm just saying only a fool of an owner would pay it.

 

It's not a "make believe fee" - it's what every franchised organization in the world does. Every. Single. One.

 

Look! Haverford has an ice surface and people on skates - why can't they be in the NHL!?!? Because that's not the way it works.

 

To be clear, I think $500M is absolutely ridiculous. But it does work out to about $16.67M per team.

 

And, really, it's not all that bad if you can be, for example, a franchise that hasn't even made the Cup Final since 1966 and is the most valuable franchise in the league.

 

They were first sold back in 1927 for $127,000. One might say it was absolutely ridiculous for them to be charging a "made up fee" almost 10 times what the Maple Leafs were sold for in 1927 to get into the NHL. But it has seemed to work out for most if not all of the franchises that paid it.