Bulls & Bears: NHL poised to expand, despite struggling markets

 

Tom Mayenknecht hosts The Sport Market on TSN 1040 and TSN Radio, where he regularly rates and debates the Bulls & Bears of sports business. He reviews the major winners and losers of the past week every Saturday

 
 
 
 
Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.
 

Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.

Photograph by: Vancouver Sun graphics, .

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VANCOUVER — Sorting out the major winners and losers of this week — with a bottom-line twist — in the world of sports:

BULLS OF THE WEEK

The National Hockey League is open for business. And we’re not talking about this weekend’s NHL draft, next Wednesday’s free-agency frenzy and all the trades in-between that combine to make this a big week for the marketing of hope in the now 30-team league. We’re not talking about the afterglow of a great two months of U.S. television ratings for its Stanley Cup tournament, culminating in near-record numbers for the final in the U.S. (noting audiences were down in Canada after the five Canadian-based franchises that qualified exited by the end of Round 2).

We are talking about NHL expansion, especially now that the league is officially on the record with a bidding process that will begin in July. Let’s first be clear that the NHL is only now “formally” considering expansion after at least three years of informally considering it and setting the stage for its latest growth spurt. The league knew what it was doing two seasons back in going from the symmetry of six divisions of five teams each to four divisions much better built for 32 than 30. It also knew what it was doing in granting a prospective Las Vegas ownership group the permission to conduct a season ticket pre-sale these past six months. It knew what it was doing on multiple informal visits to Seattle, another one of the target markets for expansion.

The NHL is our bull of the week because it is doing what every successful business aspires to do: expand its market footprint, operations and revenue streams. It’s a bullish time for commissioner Gary Bettman because he will be able to command at least $500 million per franchise in expansion fees, further helping to consolidate the average NHL club value of more than $490 million, according to the latest estimates by Forbes magazine.

BEARS OF THE WEEK

It’s not all roses for the NHL. In a time when it is achieving strong television ratings in the U.S., record league-wide revenues and unprecedented growth in franchise values, it is still left with a couple of sick puppies in its litter. Behind the glitz of the sexy Vegas talk is an Arizona Coyotes franchise at odds with its landlords at the City of Glendale, with both parties losing money hand over fist (a combined minimum of $30 million per annum).

Meanwhile, Bettman will preside again today at the BB&T Center in Sunrise, Fla., home of this year’s NHL draft, the Florida Panthers and their league-worst average attendance of 11,265. It’s difficult to build an extension to the mansion when a few rooms are on fire, and if the NHL is as smart as it thinks it is, it will tread carefully on expansion while getting its house in order. Hockey politics may dictate otherwise, but in terms of sheer hockey economics, it would also be smart to put Quebec City and a second franchise in Toronto at the top of its business plan (via expansion and/or relocation).

Tom Mayenknecht is host of The Sport Market on TSN 1040 and TSN Radio, where he regularly rates and debates the Bulls & Bears of sports business. He reviews the major winners and losers of the past week every Saturday in The Vancouver Sun.

 
 
 
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Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.
 

Tom Mayenknecht, host of The Sport Market on TSN 1040 and the TSN Radio network, regularly rates and debates the Bulls & Bears of the sports business.

Photograph by: Vancouver Sun graphics, .

 
 
 
 
 
 
 
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