I think I lied. Expanded revenue sharing via a luxury tax isn’t the only way for the National Hockey League to fix its core economic issues.

The reality that nobody in these negotiations wants to touch is that the league is too big. It grew too much in the mid-1990s, the John Ziegler expansion an obvious sign of greed. The best market to apply for a team, Hamilton, was passed over for Ottawa and Tampa Bay because both of those places had owners willing to cough up a $50M expansion fee.

If there was a clear moment in time the NHL had become too big, that was it. That was when owners realized that they could use expansion as a quick cash grab. When the possibility of two new expansion teams was brought up earlier this week, the thought was “expansion fees” and also “there’s no way this can be right.”

It’s a way to quickly inject the league with cash. Expansion and relocations fees don’t count against hockey-related revenue, so these work as a one-time payout. The name of the game is greed, at the expense of diluting the talent of NHL, further divvying up of the league’s star players and making fans even less likely to be able to watch them in person.

The dirty little secret from the mid-1990s and early 2000s is that the NHL was overall a bad product, and only the diehards had good reason to watch. The game was so slow and diluted that there was very little to interest the casual fan. Part of the NHL’s growth out of the lockout comes from the fact that the number of marketable stars was closer to par with the teams in the league. Before expansion becomes feasible, there needs to be the right amount of worldwide talent to load up those clubs.

Again, we’re not past the “strong speculation” phase, but franchise relocations or expansion are going to have to be a topic discussed sometime soon. Forget about the empty Sprint Center in Kansas City—Seattle’s getting a new arena. Markham’s getting a new arena. Québec City is getting a new arena. All four are places that could legitimately hold an NHL team.

That’s all well and good, but the NHL expanded too rapidly, and re-located to too many non-traditional markets that it’s only now that the minor hockey programs in those cities are beginning to pump out future NHLers. Certainly, that was the end game and it improves the overall product, but look at what it cost us: A season of hockey, potentially a second, and a stagnant era of hockey between 1995 and 2003 dominated by trapping, hooking, holding and fighting.

If we’re going to make use of those rinks, and we should, it should be in the interest of a tiered NHL. Jesse Spector has hit the idea of an NHL and a lower-tier NHL2. Currently, there are 60 NHL and AHL franchises in North America. Raise that number to 64, and you create a four-tier league with promotion and relegation between them.

The upper echelon, the National Hockey League, where 16 teams compete for the Stanley Cup, should be uncapped. There, the most successful teams at drawing revenue would be able to sign the best players the world has to offer for whatever they’re willing to pay. Keep in mind the NHL isn’t at this “50-50″ crossroads because Toronto and Philadelphia and the New York Rangers don’t want to spend money, it’s because other franchises in the NHL simply can’t afford to.

This is the only way you can really make expansion work. When I was growing up, the NHL expanded or re-located seemingly every year, which was real cool for a kid who was collecting hockey cards and getting to see all these new jerseys and looking up where all these new cities were in my atlas (Ottawa, where the heck is that?).

But it was a get-rich quick scheme, and the NHL would have gotten away with it, if it weren’t for those meddling players who merely asked for their fair cut. This got all player salaries to boom and created an unsustainable business model.

Does the NHL want to go back to that model? I’m not entirely sure, but the problem is, seeing as it would increase union membership and money in the NHLPA, and how expansion fees give ownership a few extra dimes that they wouldn’t have to share with their players, who really at the bargaining table is going to oppose any expansion?

It’s like a line I’ll keep going back to: “the game of hockey has no advocate at the bargaining table.”

Promotion-relegation make sense to me, as does an uncapped top league, but it doesn’t make sense for any of these people running this sport as a business. I kinda want it to be about the “hockey” again at some point, ya know?

Comments (21)

  1. one of the first snags I can see with promotion-relegation is that current AHL arenas are usually less than half the capacity of NHL arenas…

  2. One of the big things you’re missing about the league’s talent being “diluted” is that in the late 80′s and 90′s, we started to get a massive influx of talent from Europe that didn’t exist in the league prior to that…so it wasn’t as dilluted as one might think. The talent was just fine, but the rules were enforced in ways that slowed the game down. That being said, there aren’t any big hockey playing countries like Russia and the Czech Repulic left to draw from today that aren’t already being mined for talent. That means that future expansion will dilute the talent some, although US hockey has made strides in recent years as the kids from the Gretzky in LA age start hitting their late teens.

    As for the NHL2 idea, I don’t see that being anything more than a replacement for the AHL. I do think that NHL teams would do better to control their farms a bit more closely like Major League Baseball does (ie. own the NHL, AHL, and ECHL teams and place the coaches and systems in place that they want). Right now it’s pretty haphazard – some NHL teams own AHL teams (LA owns Manchester), but it certainly isn’t consistent or geographically ideal (I remember a time when Anaheim’s AHL affiliate was Portland, ME!).

    • One more note on the NHL2 idea. Do you think that the owner of the #17th and #18th most profitable team in the NHL will be willing to drop his property to a lower league, thereby diminishing the value of the product? I don’t.

  3. Man, how the fack do u not know where Ottawa is, you live in canada u dumb fuck

  4. The tier system in Europe works because it`s always been there. Right now though you have a group of teams that want to break off and form a superleague without the fear of relegation. Those teams are the ones usually found in the Champions League. As it stands in the English Premier League, the richest league in world soccer and one of the largest tier systems due to its 5 levels, the top teams automatically lose large sums of money dropping down to a lower tier, to the point where the league has to aritificially support the clubs by offering them parachute payments for the first three years in the lower tier.

    Applying that to hockey, a team ravaged by injuries that might find itself in the bottom 3 (because it`s always 3, an automatic winner and then a playoff of the following four teams to play for the other two places) could suffer serious damage to its financials. Then you have teams like Leeds United and Portsmouth which spent their way to the top leagues only to collapse and fall into bankruptcy shortly after their pinnacles. Having seen some hockey clubs outspend their income *cough New Jersey cough* this is a real fear for the implementation of the tier system.

    However to the poster who claimed that stadium sizes matter…they do not. Some of the clubs in the Premier League have stadiums that are 1/5 the size of Old Trafford of Manchester United. Old Trafford was made to its current size through investment over the years. It was not built as an 85000 seat stadium like the current Wembley stadium was, but added on to. Hockey arenas are not designed in that way so it would be more difficult to implement.

    • While I agree with most of what you say, I’m not very impressed by your knowledge of the English pyramid.

      First off, there are not 5 levels in English football, there are 24. Unless you are only talking about the Premier League and the Football League, in which case there are 4, not 5.

      It’s also not always 3 relegations. While the top 2 levels drop 3 teams, the third league relegates 4, while the 4th relegates just 2. As you get lower it gets more complicated, because the leagues start splitting into regional ones.

  5. Expansion, I’m always avocating contraction. Stop trying to make hockey popular in markets it will never be popular in.
    To many US fan bases only attract fans if the team is a Cup contender and some don’t come even if they are a cup contender. You should be in fan bases where, regardless of record, people will come.
    Anaheim(come if they are winning) Columbus(can’t blame the fan base, but its not a hockey market) PHX(surprise) Islanders(can’t blame a once strong fan base) Florida(can’t blame the fans, but it not a hockey market. NJ(terrible regular season fan base) maybe a couple others.
    Stick to areas where there is passion for hockey and make the game as good as possible. 24 to 26 teams. Take the player #s from what 700+ to 500+, think about the increased quality of every team and every line.

    • Anaheim has had entire seasons of sellouts (2008 springs to mind) and was near capacity many years. They had a couple down years (01-02), but so have most teams not in Toronto.

      Season Games Total Attendance (Avg.) Percent Sellouts
      1993-94^ 41 696,560 (16,989) 98.9% 27
      1994-95* 24 412,176 (17,174) 100.0% 24
      1995-96 41 703,347 (17,155) 99.9% 38
      1996-97 41 695,867 (16,972) 98.8% 28
      1997-98+ 40 682,735 (17,068) 99.4% 25
      1998-99 41 647,973 (15,804) 92.0% 9
      1999-00 41 592,874 (14,460) 84.2% 8
      2000-01 41 553,990 (13,512) 78.7% 3
      2001-02 41 492,089 (12,002) 69.9% 3
      2002-03 41 573,524 (13,988) 81.5% 7
      2003-04 41 614,504 (14,988) 87.3% 11
      2005-06 41 620,380 (15,131) 88.1% 12
      2006-07 41 671,916 (16,377) 95.4% 25
      2007-08~ 40 687,718 (17,193) 100.1% 40
      Totals 555 8,645,653 (15,578) 90.7% 260

      • DIdn’t have more up to date numbers, but in 2011-12, they were at 86% capacity.

        • Oh, also, New Jersey drew more fans (regular season, for fair comparison) than Winnepeg did – and the Jets sold out every game. The fact of the matter is that NJ has to compete against two other NHL teams (with several others not being all that far away either)…but they still drew 87.4% capacity during the regular season.

          Point is that a lot of these “unsupported” American teams actually do draw quite well. You’re aware that with 100% sellouts, Winnepeg was 25th in the league in attendance, right?

          • Ah, but these markets are losing $ or breaking even.

          • This is true…but that’s what happens when you give 57% of your revenue (not profit) to the players. No other league does that.

      • This isn’t a criticism of you specifically, but I really wish the attendance numbers were by both capacity and revenue. I mean, if a team really wants to fill the barn they can just sell all the tickets for 10$ each. But then an entire season would get less revenue than 3 or 4 Montreal home games.

        All attendance numbers are inflated. Teams that have poor attendance give away tickets to charities, or sell them at huge discounts to third party ticket sellers (some of which are owned by the team / team owners). When you look at a crowd and see that half the seats are filled, but the reported attendance is nearly full…well, you know someones fudging the numbers.

    • The Islanders are a completely different case. 20 years of mismanagement will drive any fanbase nuts. Chicago could barely fill half it’s arena before Toews & Co turned it around. I don’t think anyone would argue that it is a bad hockey market. Give the Isles a couple more years to mature, give them a new building (or sign on with the Barclays Center in Brooklyn) and they will be a healthy franchise. They have one of the best TV deals in hockey, if they can get more revenue from leaving NVMC then they are completely viable.

      • Yep, a good team will always draw. I know people like to dump on Atlanta, but they made the playoffs once in like 10 years and didn’t win a playoff game…would you pay for season tickets to see that? Carolina, conversely, had some good years and won a cup – they seem to be doing reasonably well.

  6. To me, it seems the NHL is stuck in a mobius strip. To grow, it must feed on itself. To get Big-4 money, it needs a lucrative national (American) tv contract, for which it needs more than 23 American teams. Expansion sows the seeds for more NHL fans in new markets, but expanding into more markets dilutes the game, theoretically making it less likely that new fans will watch. At the same time, new fans in new markets sow the seeds for more NHL talent coming up through local hockey programs, but that process takes years. Compounding this, is that a lucrative national contract that actually shows comparable numbers of games on American TV to the other big 3 could also theoretically increase hockey interest and fandom across the country. I don’t know what is ultimately best for hockey.

  7. Every time the NHL relocates a struggling American team to an enthusiastic Canadian market, it has many of the effects of contraction. The NHL has already lost Atlanta, and now it looks very possible it could lose Phoenix. These are huge American TV markets and the South, in general, is where the population growth in the US is happening. When time comes again for negotiations with the networks, they will all note that the NHL has swapped out Atlanta, a hugely valuable market, for Winnipeg, one that is worthless, no matter how many more CBC viewers there are on a Saturday night. Phoenix leaving for Quebec City makes it worse. By taking Southern Ontario and Quebec City off the relocation market with expansion, the NHL probably figures it removes the Canadian relocation threat. Worse comes to worse, a failing American team will be relocated to a different American market that still has value to American broadcasters, e.g. Seattle, Houston, or Kansas City, and not to ones that have no value.

    • I think you hit the nail on the head…the league doesn’t want to lose phoenix because it’s a massive TV market that helps them sell their broadcast rights for massive sums of money. The less markets like that, the less money the NHL will take in. We’re not talking about chump change: the last deal was for 10 years @ 2 BILLION.

  8. “But it was a get-rich quick scheme, and the NHL would have gotten away with it, if it weren’t for those meddling players who merely asked for their fair cut. This got all player salaries to boom and created an unsustainable business model.”

    This is a baffling understanding of how players ended up keeping 70-something percent of revenues in the early aughts. Martin Lapointe didn’t end up making $5 million and Bobby Holik wasn’t clearing $9 million per because there were two questionable expansion teams in Florida bidding salaries up.

    The players ended up with so much because the agents and NHLPA had tactics in place that guaranteed salary inflation, while the owners had no mechanism to limit its growth as a percentage of overall revenue. With no expansion, guess what changes in this equation? You’re only correct if your answer was “nothing.”

    Also, clutch and grab hockey had to do with the way the referees called the game. This was a product of how the old guard (your Colin Campbells and Brian Burkes) wanted the game called, not a product of pressure from the San Jose Sharks.

    Your ‘tiered league’ idea would have the effect of cutting franchise values for the 17th and lower teams into splinters of what it is now. It doesn’t take a genius to guess how well that will go over.

    And finally, 2 more teams wouldn’t dilute the talent pool as much as you think it would. While replacement player scenarios are crazy just for the fact that there aren’t 650 guys outside the NHL who can skate a shift of NHL hockey, that doesn’t mean there aren’t 60. There’s not some huge gulf between Robert Bortuzzo, Brian Strait or Nick D’Agostino (AHL players) and Ben Lovejoy (NHL player). The only real difference between the first group and the other guy is he had a better camp than they did the one year there was an opening.

  9. My answer is: because in twenty years, the presence of the new teams will mean the talent pool will be bigger. How many NHLers came from the philly area before 1967 ?

    Precisely that argument supports expansion to Seattle – and does not support expansion to Markham. It may apply to QC, but I doubt it. But a team in Markham will have zero effect on the depth of the GTA zouth hockey talent pool.

    The worst part of the Bettman expansions is that too many were a step too far, and then the new organizations were pretty useless.

    Denver was a good move, there was some hockey in the area. Nashville has managed to be competitive. Dallas won a cup. Tampa, Carolina, Atlanta, Columbus not so much.

    Which expansion markets now have thriving youth leagues ?

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