NHL to expand to two other cities: The cost to join revealed?
The latest phase of NHL expansion seems to have reached a pause. With the addition of the Vegas Golden Knights in 2017 and the Seattle Kraken in 2021, the NHL joins the NFL as the only two major North American sports leagues with 32 teams.
Salt Lake City was the most recent potential expansion candidate. Still, instead of getting a new team, the Arizona Coyotes were relocated to become the Utah Hockey Club, effectively filling that spot.
Predicting the Next NHL Expansion Fee?
Although the NHL may not expand for a while, the following expansion fee is worth pondering. Before debating potential cities or revisiting the ongoing speculation about Quebec City, a more straightforward question arises: How much will the following NHL expansion cost?
The Kraken paid $650 million for their expansion entry, following the Golden Knights, who paid $500 million. Two decades earlier, the Columbus Blue Jackets and Minnesota Wild paid $80 million each in 2000. Compare that to the $2 million fee for the 1967 NHL expansion.
Recently, the NBA announced it is also exploring expansion, which could set the benchmark for future NHL expansion fees. In 2021, NBA commissioner Adam Silver suggested a rumoured $2.5 billion expansion fee might be too low, especially after the league signed a $76 billion media rights deal. If the NBA charges more than $2.5 billion, the NHL may look to adjust accordingly.
To put this in perspective, only two NHL franchises- the Toronto Maple Leafs and New York Rangers- are valued at more than $2.5 billion. When Michael Andlauer purchased the Ottawa Senators for $990 million, it sparked speculation about when the NHL would see a team sell for over $1 billion. We got that answer soon after when the Coyotes were sold to the NHL for $1 billion and flipped to Smith Entertainment Group for $1.2 billion. With hockey teams breaching the $1 billion mark, it's not far-fetched to predict that future NHL expansion fees could exceed that figure.
The Utah Case: Expansion or Relocation?
Utah's situation is particularly intriguing. Despite the Coyotes relocating there, the NHL treats Utah as an "expansion" franchise rather than a relocated one. Former Coyotes owner Alex Meruelo had the chance to secure an expansion team if he could build a new arena, which would have allowed the Coyotes' records and history to stay intact. However, Meruelo returned the rights to the NHL after his arena efforts failed.
Although the NHL describes Smith Entertainment Group's $1.2 billion purchase as buying the "assets" of the Coyotes, it raises the question: Is this simply a relocated franchise with a new label? When someone buys an expansion team, they build the organization from the ground up. However, in Utah's case, the team is already assembled, which could justify the higher price tag Smith Entertainment Group paid. The NHL could even argue that the premium they paid was to bypass the usual expansion draft and team-building process.
Future Expansion Fees
An interesting point is that expansion fees are often higher than typical team sales. As leagues add more teams, the overall value of franchises can be diluted, which could drive up the cost of expansion. It's likely that before the NHL expands again, a few more team sales will occur, and any new media rights deals could further affect the overall value. When the NHL is finally ready for its next expansion, it's safe to assume the fee will surpass recent team sales, potentially marking a new milestone for the league.
Source: PuckProse
Predicting The Next Potential NHL Expansion Fee
| POLL | ||
Should the NHL expand to 34 teams? | ||
| Yes | 88 | 55.3 % |
| No | 71 | 44.7 % |
| List of polls | ||
