Competition Market Analysis:

Based on an in-depth review of the NHL, there are three elements necessary for a team to survive and thrive. Much like for a three legged stool to remain standing, all three are necessary.

A fanbase as we have defined includes both individual and corporate fans. The individual fans when in sufficient numbers generate in-event excitement which further encourages and sustains the corporate participation to schmooze clientele who are also happy to come to games being fans themselves. This relationship between fan types necessarily underscores this broad definition of a fanbase in order for it to be self-sustaining.

Further, these three elements do not carry equal weight and as such our review then potentially differs with past NHL expansions. While new ownerships and new arenas can be put into place, fanbases aren't as easily coaxed in new cities. Based on the evidence, we believe that a fanbase can be grown by an NHL team. However the seed for growth is grassroots hockey involvement which must already be in place or quickly take root for a team to have a long term and sustainable future.

A fanbase as so defined then carries at least 70% of a market's anticipated future in that location, an ownership group (15%) and a suitable arena (15%) split less than half of that fanbase value. Each element receives a score out of five. So the best average possible is 5.0 in either the balanced or weighted scoring systems.

Quickest Owner Relocation (PDF)	Ease of Expansion (PDF)
Analysis by Score (PDF)	Analysis by Fanbase (PDF)

Southern Ontario offers one of the largest NHL markets in the world. That is why both Hamilton and Toronto are both simultaneously mentioned for teams, even with the Toronto Maple Leafs there. To be clear, we believe that Southern Ontario can thrive with an additional team, maybe even with 3 three teams in total. The fanbase is simply that large to support it. Copps Coliseum in downtown Hamilton is within the 50 mile territorial rights of Toronto's Air Canada Centre and Buffalo's HSBC Arena. The complex negotiations to share those rights will mean a windfall of new revenues for the Leafs and to some degree the Sabres, should they both allow it. Copps would require renovations to add more luxury boxes for its corporate fanbase. Should the rights negotiations prove unwieldy, it is entirely possible that a new rink could be built outside of the catchment to circumvent Leaf/Sabre claims and avoiding potentially significant renovation costs to Copps. The Kitchener-Waterloo area has been identified as one such location. However, having the Leafs onside for an expansion or relocation vote is very important, as existing clubs would be very leery to break the golden rule and undermine a fellow club. This is especially true in the case of a team relocation which provides zero financial incentive to other 29 clubs. On the coin's flipside, should expansion be on the table, look for individual club financial benefit to rule each of their votes. And these were just the preliminary concerns with attention now turning towards ownership. While Hamilton does have other potential owner candidates such as Ronald Joyce, the head of the Tim Horton's chain, or many other corporations, all discussion centers on James Balsillie, the co-leader of Blackberry maker Research in Motion based in Waterloo. It may be that his past actions have blackballed him in the rather exclusive club of NHL owners. His late backing out of the Penguins purchase and his selling Hamilton-based season tickets for the Nashville Predators even before the NHL board approved the transfer of ownership to him, cost him alot of emotional capital with what would be his future business partners. He is now seen as both the biggest enabler of a Southern Ontario NHL franchise, where ever he desires to locate it, as well as the biggest roadblock to it. Given his past unilateral actions and making almost every move a public event, it is possible that Hamilton will wait for a team longer than Mr. Balsillie has patience with the NHL.



The above scores are based on some assumptions. The ownership score is assuming that an ownership group comes together with the necessary deep pockets. The obvious leader would be Howard Baldwin who has a great number of years of experience as an NHL owner and knows the rest of the board of governors very well. In relation to the arena score, while passable for an immediate relocation, it does not meet even the Mayor of Hartford's approval. The mayor stated in early 2009, that a new rink would be needed to attract NHL interest in the former NHL and WHA city. However, as yet no firm plan is a done deal. Based on that history of strong support of both leagues, Hartford's fanbase is the least of the city's concerns in drawing the attention of the NHL.



The assumptions behind Houston's scores may be the easiest or hardest to justify. Is Les Alexander still interested in bringing the NHL into his Toyota Center to play along side his NBA Rockets? If so, his deep pockets would attract NHL interest very quickly. Trouble is, his last public venture into securing an NHL team was back in the mid 1990s when he was trying to scoop up the Edmonton Oilers. As for the arena, the Toyota Center is a great place to play basketball and can handle hockey easily without the usual pitfalls of jamming an ice rink into a basketball facility. Houston also is one of the larger TV audiences that isn't in the NHL. The only issue seems to be in the fanbase for hockey. If Dallas serves as a model for future success, Houston could be a fine NHL addition. Texans seem to love rough and tumble sports like football and rodeo, which fits rather nicely with the NHL. The only question is that maybe the Stars' support has been precisely due to a constant winning team on ice. Overall, we tend to believe that Texas and hockey go well together.



Let's start with the positive: the rink is absolutely magnificent for basketball or hockey. That is the lone bright spot. The city has been using the media primarily to vocalize KC's NHL interest. The fanbase is a very strong concern for the NHL. Reports indicating KC is one of the most overextended sports disposable dollar locales even before the addition of the NHL and NBA has been widely distributed. Another issue is that should the NHL drop a team into KC and the NBA then does likewise, it could be the NHL crying uncle first. Ownership is the other big concern as William "Boots" Del Biaggio holds the exclusive right to bring NHL hockey to the Sprint Center. This says volumes about the lack of ownership support. It is not clear whether his legal and financial troubles have pulled that right away from him. AEG as owners of the LA Kings and many NHL rinks, may in the end use that leverage to bring the NHL to KC. AEG as rink manager is contractually obligated to bring a major sporting tenant to the Sprint Center, sport unspecific. Basketball may ultimately be a better tenant for the Sprint Center in the basketball-crazed Midwest. It should be noted that any NHL owner wouldn't want to share any Sprint Center revenues with AEG. This means that AEG could be as much of a conduit to the NHL as a roadblock.




Las Vegas could be the riskiest of all locales. Glitz, glamour and TMZ-like 24/7 coverage of your sport and celebrities on the one hand or in-game gambling issues and NFL player style run-ins with the law on the other. If a team could make it in Vegas, it may be a marketing machine for the entire league. If it fails, it will be the biggest egg on the league's face as it could ever find itself. We tend to believe that the 'egg theory' is most likely for the NHL. The reason is simple: most of the 2 million people per month who visit Vegas aren't interested in attending a sporting match, as there are so many other distractions waiting to compete for the disposable income. The needs of the local population of 1.7 million are unique as a disproportionate number work evening shifts to sustain the primary industry. Think of Phoenix then take away about 2.1 million residents and add about a hundred times more entertainment competition and you have the idea what an NHL team would face, regardless if it was a floundering expansion team or a constant division champion. Some reports suggest Jerry Bruckheimer has cooled to the idea of being an NHL owner. If still interested, he would be the dream NHL owner: rich, influential with other monied people and of course tied to the Hollywood marketing machine. Could the NHL ever find a once-in-a-lifetime owner like this? Actually yes, twice in the last 20 years in fact. Both times it turns out it was more sizzle than steak as Disney flipped the Ducks unceremoniously and we all know by now what happened to Bruce McNall. Truly the dream owner can become a nightmare should the Vegas owner grow tired of his team. Lastly, grand AEG plans to break ground on a 20,000 seat arena was to occur in the summer of 2008. With the economy affecting vacationers, Vegas has put that idea on hold, making this discussion potentially unnecessary as the Thomas & Mack Center would not allow the NHL to put its best, glitziest foot forward into the desert locale.



Oklahoma City opened the Ford Center in 2002 costing just $89 million to build. By keeping the budget tight, it left out considerable amenities needed by pro sports like the NBA and NHL, since no tenant was forthcoming. By hosting the Katrina-displaced NBA New Orleans Hornets, the city raised its' profile enough to attract local billionaire Clay Bennett to buy the Seattle Supersonics and turn them into the Oklahoma City Thunder. In 2008, the city has approved tax hikes to add those amenities left out in the past including an NBA practice facility. Once these are in place, the arena should be able to generate NHL revenues. Both ownership and fanbase are very real concerns. While the city (540,300) and surrounding counties have around 1 million residents, there is concern that the marketplace can not sustain both the NBA and NHL. Realistically, after the NBA dust settles, Oklahoma City needs to be reassessed. NHL ownership hopefuls would be Bob Funk, who owns the CHL Oklahoma City Blazers and one of the largest staffing companies in the US, and Brad Lund, CEO of Funk's Express Sports. Funk underwent a 2008 divorce, so his desire and ability to back NHL hockey may have changed since his public overtures for the then-portable Penguins occurred. In a telling 2007 quote about market size and ability, Lund said "If the NBA is not going to be here, then I would think there would be corporate support for hockey." We agree that the city is too small for both the NBA and the NHL. It may have been too much of a stretch for the fanbase to support the NHL even without competing with an NBA co-tenant.



Portland's NHL aspirations starts and ends with Microsoft co-founder Paul Allen. Allen owns the Rose Garden and the NBA Trailblazers that call it home. He also owns the NFL Seattle Seahawks. Being rebuffed by the NHL to relocate the Coyotes to Portland in 2001 and steered away from the Pittsburg Penguins by the NHL, he may have cooled to the NHL for good. The rink is more than suitable as it was built in 1995 with 72 suites and hockey in mind. While Portland has seen teams in various leagues come and go quickly, the fanbase for hockey is there. While it will never be confused with Canadian fanbases or with those in established north eastern American cities, it offers a stronger potential than some other US cities vying for NHL teams. It should be noted that an AEG-controlled entity also manages the Rose Garden. AEG with interest in many NHL rinks does carry some weight with the NHL board behind the scenes. However, it is contractually obligated to find a main tenant in KC, so its' motivation for Portland might be muted. So if Allen has a change in heart, look for Portland talk to heat up. Otherwise, the WHL junior team called the Winter Hawks have no fear of being displaced.



Quebec City is another former NHL and WHA host that has proven over the years to support its' hockey team through thick and many seasonal performances of thin. The fanbase is its' strongest suit. With little beyond talk of replacing the rink, which coincidently is relatively unchanged from the day the NHL left town, there is no ability for Quebec City to draw the revenues necessary to support the NHL then and now. Although Aubut has occasionally made statements about the NHL's new CBA potentially opening the door to the Nordiques' return, it appears through public statements that Pierre Karl Peladeau, head of Quebecor media conglomerate is willing to own a team in Quebec City. Peladeau previously lost in his bid to purchase the Montreal Canadiens from George Gillett. However, until there is a commitment to a new arena, with a cost upwards of $400 million, memories of the baby-blue clad Statsny brothers are all that remain.



The KeyArena was first opened in 1962 and was remodelled last in 1995. The arena has over 50 suites and can seat 15,000 for hockey. But it has very few amenities to draw premium revenues such club seating service or club lounges. This prompted talk in 2004 to either replace or once again renovate the arena to help accommodate its' main tenant, the NBA Supersonics. Now that the Supersonics have left for Oklahoma City, there is less reason to upgrade the facility. While adequate for an immediate relocation for either the NBA or NHL, it is a roadblock to either league. The fanbase has a hockey history going right back to the turn of the last century. Its' proximity to other West Coast NHL teams and the size of its' TV audience are two strong considerations for Seattle. The trouble is that no owner has pulled for Seattle. That may or may not change given the departure of the NBA from Seattle. Microsoft co-founder Paul Allen draws most interest from observers as a potential Seattle NHL owner, since he is the owner of the NFL Seattle Seahawks. However, he tried twice to bring the NHL to the rink he owns in Portland. Given the state of KeyArena in Seattle and his ownership of the newer arena in Portland, thoughts that he might move his NBA team to Seattle and add an NHL team as well seem unlikely, as his arena in Portland would be left vacant.




Given the lucrative state the Canadian teams find themselves, particularly the Toronto Maple Leafs, it stands to reason that a second team in Toronto can tap into a fanbase well that would be least likely to go dry in the entire NHL. There is no doubt that the Maple Leafs would be affected especially in things like local TV and radio deals. In fact, the complications of brokering a deal between the new team and the existing one would be some of the most complex in all of sport, even if the new team built its own rink. With such a flush hockey market yet to be fully stoked, there would be an endless list of people willing to sell their soul to become the new team's owner even with an enormous sticker price. In effect, the NHL could auction a new Toronto team to the highest bidder. Just a cursory look into the Maple Leaf financials tells anyone that putting up $300 million plus for a new arena will have a short payback period. So while Air Canada Centre offers a great home to both teams, splitting those revenues may not be in the cards, depending on those complex negotiations with MLSE, the owners of the Maple Leafs, Air Canada Centre and the NBA Raptors. To be clear, MLSE is the main roadblock. If they kill any chance of a second team, they will suffer little pain long term. If they allow it to occur, MLSE will gain huge new revenues for sharing territorial rights with the new team.



The European fanbase is well developed with some of the strongest hockey histories on earth. Each country has its' own elite league system much the way soccer operates in Europe. So it seems then that the fanbase for the NHL would be easily set. However, comparing their status quo to what the NHL requires is quite a difficult gap to bridge. Currently regular seasons last at most 56 games. Fans would have to be prepared for around 50% more home games than which they are accustomed. Not to mention the elongated playoff marathon held every spring and front half of summer. Would European fans be interested in supporting any hockey that late into spring and summer? Also, pricing for most elite leagues is nominal compared to NHL ticket prices to sustain a team now. A review of existing elite league arenas dictates that Europe is not accustomed to having NHL-like attendances, with many buildings opened in the past 10 years with capacities under 8,000 fans. The point is that while finding suitably-sized arenas may be the easiest question to answer, the elite teams simply aren't drawing half of what it would take to support NHL hockey. This is true even in the larger cities that have buildings that can hold up to 12,000 or 13,000 people. So the fans will have to buy much more expensive tickets and buy many more of them in order for a team to be sustained. The same prerequisite applies for corporate sponsors and suite renters, assuming that the number of suites in the rinks are adequate. The differences in terms of scale are dramatic. So serious questions surround European fanbases' desire and ability to support NHL hockey.

Also consider that a lot of NHL players come from these existing leagues, so the effect on those clubs is important to the NHL's future. Should these cities redirect cash to support their new NHL team, it may spell the doom for that elite league or at least the clubs in the major hockey centers in that country. This would upstage events such as the IIHF-led annual Champions League as many of those hockey powerhouse cities would abandon it in favour of the NHL. Other clubs might be left isolated and may leave their elite league and join the KHL. These negative effects will create problems between the NHL and IIHF and would be very hard to avoid going in.

This page assumes several NHL teams in Europe just to justify TV deals and endorsements not to mention the extra travel costs to each existing team. Would European TV deals add as much to NHL teams as further sharing of the lucrative Canadian TV contracts would take away from the original 30 clubs? Television from one continent to the other will negatively impact TV revenues as the time difference will upset the viewers and networks. Such tradeoffs between further sharing revenue pools, assuming expansion to Europe, would show the NHL how bad a financial decision this would be. And we haven't even mentioned revenue sharing between North American clubs and the new European ones. Certainly a European cluster of clubs would be required to justify the travel and scheduling issues much like how eastern conference teams make a milk run of the west coast. This concept of the economy of scale means a much bigger risk to the NHL since relocating or expanding by one team is rather trivial compared to setting up shop in Europe with say 4 to 6 teams.

To further illustrate that point, we contend that putting only 1 or 2 teams in Europe would kill them right from the start. They would be in North America most of the season, playing up to 40 games after prime time in their home city. Imagine those Pacific start times back in Helsinki. European fans would lose connection to their orphaned team as the road trips would be days and weeks longer than current NHL teams face. Existing Western Conference teams would play at most 2 games with each European team then head back over the Atlantic. Assuming that Europe is part of the Eastern Conference, those teams would fly to Europe, take 1 or 2 days off, play 4 games in 5 nights with each European team, then fly home and require another day or two to rid jetlag. But the worst would be travel for the European teams jetting all over North America and criss-crossing the Atlantic at least 20 single trips or about 10 round trips per season depending on the schedule maker's tradeoffs between maintaining connection to the home fans and reducing jetlag.

After reviewing what would be an entirely new financial model for the NHL, let's assume the financial numbers make sense not only to the existing clubs but also to the prospective owners. Based on this unrealistic assumption, finding committed, deep pocketed owners would be easy in a place full of capital and hockey interest. We contend that is a larger assumption than dropping teams into most of the previously outlined cities interested in the NHL.

As an additional comment, if dropping NHL teams into Europe is in the NHL's long term strategic plan of containing the manifest destiny ideals of the Russian-based KHL, the NHL should realize that the cost of that battle far outweighs any gain it would realize. Another option that the NHL might consider with the IIHF is an NHL Europe or NHL2. However when you consider that the AHL is the premier development league for the NHL already and that the status quo in Europe is another aspect in developing future players, one realizes that this is already the case. If ensuring future players come to the NHL rather than the KHL, then there must be a better way to do so than to establish a European beachhead that can't be sustained nor defended using logic.