NHL Expansion back on agenda?

[Melrose Munch]

I was reminded earlier today by a media person who had previously looked into Houston and Fertitta and an NHL official referred to Fertitta as "all hat, no cattle."

Gee, I wonder why the NHL has the reputation it has...

 

[dj4aces]

That and the rights to develop the areas around stadiums which are increasingly becoming part of these deals in recent years especially when there's a new stadium involved. So if TF already has that then I get where he's coming from, but he also already has a proven extensive history of being one cheap motherf***er even more so than Dundon for all the memes about him, so it's probably just TF being TF.

That's exactly how I read the situation in Houston, and why I think the road to the NHL for Houston might go through Fertitta (after all, they need a place to play), but it doesn't necessarily mean he's gonna be the one to win the bid. It's kinda poor form to try to negotiate things in public view.

The league wants Houston for sure, but I don't know that the league wants Houston bad enough to tolerate that tactic.

 

[aqib]

In three years the Delta Center will be fully renovated and have 17-18,000 fully unobstructed seats with a hockey team in their fourth season.

Yes but Houston is ready now. Smith would have been more than happy to get an expansion team for 2027 to properly prepare. Again we're all reading tealeaves hear but Fertitta does not appear to be willing to pay the going rate for an NHL team.

 

[StreetHawk]

That's exactly how I read the situation in Houston, and why I think the road to the NHL for Houston might go through Fertitta (after all, they need a place to play), but it doesn't necessarily mean he's gonna be the one to win the bid. It's kinda poor form to try to negotiate things in public view.

The league wants Houston for sure, but I don't know that the league wants Houston bad enough to tolerate that tactic.

This is the reality of arenas. Not much different than the issues AZ ran into. Footprint opened in 1992 and Coyotes arrived in 1996. So, the suns controlled the arena revenues, so unless the suns owner bought the coyotes, they were not going to make it in Footprint long term even if it had hockey sightlines for all seats.
That's the major difference between the Jets moving there than what the Nords/Stars faced when they moved to Denver/Dallas. Those were old arenas needing to be replaced. And the revenues were controlled by the city, so the 2 clubs splitting the revenues on a new arena was going to be much better than what they were getting from the old arenas.

Unless Fertitta changes his mind, I don't see him getting an NHL team. NHL has held out this long in Houston, I don't think they take a discount to get into that market. But, is there another location outside Harris county that would make financially sense for someone to build another arena in?

 

[aqib]

I do agree with @aqib here,

But why should Fertitia pay what the NHL wants? Nothing is showing in the numbers that any NHL franchise outside the top 3 is worth 1 billion-plus.

We don't know all the numbers. We don't know what the teams are getting from outside North America, merchandice sales, gambling, etc.

The fact is that $1 billion+ is what teams are going for. The Senators went for almost a billion and Smith paid $1.2 billion. The Lightning's valuation is like $2 billion.

Fertitta shouldn't pay more than he feels comfortable paying but as long as his number is lower than the NHL's number he won't get a team. Its not a value judgement. I'm not saying he's an idiot or a bad person for not wanting to pay the asking price but if he doesn't want to pay it he won't get a team.

Paul Allen could have had a team in the past but he wasn't willing to pay the asking price even though he obviously could afford it.

 

[No Fun Shogun]

I don't think you have to be cheap to think that an NHL team's realistically not worth the asking price as of late. I've often said that Quebec City has seemingly been priced out, but that's not a knock against them. I think it's perfectly rational to not think that a billion+ dollars for an NHL team is an attractive investment option.

I get that team ownership is mostly for social clout and likely won't net you much profit overall until an eventual sale, but truth be told I honestly do think that the overall franchise pricing scheme across all sports is a massive bubble waiting to burst, and dollars to donuts it'll hit the NHL first.

 

[aqib]

I don't think you have to be cheap to think that an NHL team's realistically not worth the asking price as of late. I've often said that Quebec City has seemingly been priced out, but that's not a knock against them. I think it's perfectly rational to not think that a billion+ dollars for an NHL team is an attractive investment option.

I get that team ownership is mostly for social clout and likely won't net you much profit overall until an eventual sale, but truth be told I honestly do think that the overall franchise pricing scheme across all sports is a massive bubble waiting to burst, and dollars to donuts it'll hit the NHL first.

I never thought I would see MLS teams going for over $300 million but here we are.

Again, we don't see all the numbers of all the revenues the teams are getting. I saw a headline that league revenues in 2023 were $5.3 billion. Sponsorship revenues are climbing and you can expect the media rights fees to increase in the next round. So yeah I can see where the $1.2B is coming from.

Supply and demand is the only thing driving up team valuations.

That literally determines the value of everything...

 

[hockeyguy0022]

So Atlanta has no rink, and TF/houston isn't paying what the NHL wants. Portland is legit with the rink. Quebec is legit. AZ has no rink unless they go back to Glendale LOL or Reno suns arena.

Canada is basically priced out, but Hamilton is getting Renos right now, QC is 100%, Saskatoon is breaking ground in about a year, and has Sasktel centre currently.

Basically everything is 6-10 years away, at minimum.

So what are we talking about....

 

[Tawnos]

So Atlanta has no rink, and TF/houston isn't paying what the NHL wants. Portland is legit with the rink. Quebec is legit. AZ has no rink unless they go back to Glendale LOL or Reno suns arena.

Canada is basically priced out, but Hamilton is getting Renos right now, QC is 100%, Saskatoon is breaking ground in about a year, and has Sasktel centre currently.

Basically everything is 6-10 years away, at minimum.

So what are we talking about....

Atlanta will have an arena within 3 years of being awarded a team.

 

[aqib]

So Atlanta has no rink, and TF/houston isn't paying what the NHL wants. Portland is legit with the rink. Quebec is legit. AZ has no rink unless they go back to Glendale LOL or Reno suns arena.

Canada is basically priced out, but Hamilton is getting Renos right now, QC is 100%, Saskatoon is breaking ground in about a year, and has Sasktel centre currently.

Basically everything is 6-10 years away, at minimum.

So what are we talking about....

Atlanta as others have said will be build if a team is awarded. I don't think Hamilton is priced out but no one will apply if they know the answer is no. Ballsillie wasn't the only one trying to get a team there. Gaglardi wanted to move the Thrashers there but wound up with the Stars. The NHL has repeatedly poured cold water on every expression of interest from Southern Ontario. If the NHL was willing to go there investors would bid.

 

[StreetHawk]

So Atlanta has no rink, and TF/houston isn't paying what the NHL wants. Portland is legit with the rink. Quebec is legit. AZ has no rink unless they go back to Glendale LOL or Reno suns arena.

Canada is basically priced out, but Hamilton is getting Renos right now, QC is 100%, Saskatoon is breaking ground in about a year, and has Sasktel centre currently.

Basically everything is 6-10 years away, at minimum.

So what are we talking about....

ATL - correct no rink, but there are parties looking to build one but would need a confirmed NHL expansion team (ala Minn/CBJ) before the city would ok the plans.

Hou - all signs point to a disagreement between NHL and TF on price of a team.

Portland - Jody Allen is the trustee of the Blazers and Moda Center. Don't sense she is interested in adding to the sports portfolio because the terms of the will indicate all teams must be sold, but seems to be at her discretion, which can be now or many years from now. WNBA team that was just awarded to Portland has no connection with Allen.

QC - have rink but small market. Question about corporate sponsors.
Sask - see QC even with a rink, corporate support.

AZ - lease with NBA club runs to 2037. Ishiba the new owner, we won't know how serious he is until it gets closer to either the arena getting a Delta Center upgrade to accommodate NHL hockey or they build a new arena. Wait and see, but this is many years away IMO.

Houston/QC can begin the earliest because they have NHL arenas. Portland as well, but no signs Allen will buy a team as she's more likely to sell the Blazers than add an NHL team. And would not know if buyer would want NHL team as well.

 

[varsaku]

That literally determines the value of everything...

Potential for growth can also drive up the price despite having the same demand and supply. I guess you can make an argument that drives up demand, but for such expensive buy i don't think it really moves the demand much since the number of potential buyers are limited.

 

[Yukon Joe]

I get that team ownership is mostly for social clout and likely won't net you much profit overall until an eventual sale, but truth be told I honestly do think that the overall franchise pricing scheme across all sports is a massive bubble waiting to burst, and dollars to donuts it'll hit the NHL first.

It's one of those things - I too think that sports team valuations are a bubble, and will eventually come back to earth.

The thing is though - bubbles can last for a very long time. Take a look at Bitcoin, which is not connected to anything. The price has jumped around for quite awhile, but is still fairly high for something with no intrinsic value.

Or look at the most famous example (in my lifetime) - the dotcom bubble. People were saying for years that dotcom stocks were a bubble, yet the prices kept going higher. Until they didn't.

Or look at real estate - people have been saying for 20 years that real estate values were a bubble. While there have been some examples of the "bubble bursting" (think Arizona during 2008) real estate valuations have remainder extremely high. So perhaps it's just the new normal.

Or finally - back in 1999 there was a book - DOW 36000, published in 1999. It predicted that the DOW Jones industrial average would hit 36000 points within a few years. Famously this was untrue - you again had the dotcom bubble collapsing, plus the 9/11 attacks.

The thing is - the DOW Jones average is at 42,000 today.

So long stor short - investing $1.2 billion (or more!) in an NHL franchise isn't necessarily a crazy idea. It's just a really, really expensive bet.

 

[Takuto Maruki]

Gee, I wonder why the NHL has the reputation it has...

The guy has bagged on the league and it's efforts in the Sun Belt because he was passed up, because the NHL was relatively firm in its price, and Tillman wanted to get it on the cheap. How is this an indictment on the NHL, especially when they have had buyers in other places (including two groups in Atlanta) who were willing to pay the price set?

 

[dj4aces]

So Atlanta has no rink, and

There are multiple groups waiting for the league before they begin construction on a rink. They're not gonna build an arena to NHL specifications only to not have that anchor tenant show up. That's the end of that. At least one of them has stated in the press that a NHL tenant isn't required ...but they're not gonna build a mixed-use entertainment/residential arena district with out an anchor tenant.

Expansion will come to Atlanta, and if Fertitta wants the NHL, he's gonna have to pony up.

 

[StreetHawk]

Expansion will come to Atlanta, and if Fertitta wants the NHL, he's gonna have to pony up.

He probably doesn't want the NHL that badly. Already has the management agreement to the arena and Houston is a large market. If there is no one else that wants to do a similar ATL project near Houston, then there is no pressure point for him.
It's the reality of the sports world when it comes to NHL/NBA as they can and should share an arena, but the first to market holds the arena management agreement these days. Sometimes you get a Smith who covets an NHL team and others you end up with a TF who doesn't (from appearances).

 

[Melrose Munch]

The guy has bagged on the league and it's efforts in the Sun Belt because he was passed up, because the NHL was relatively firm in its price, and Tillman wanted to get it on the cheap. How is this an indictment on the NHL, especially when they have had buyers in other places (including two groups in Atlanta) who were willing to pay the price set?

Not supposed to piss off potential customers.

And now the NHL is talking out of both sides of their mouth about expansion, they moved Phoenix, and according to Forbes (which is all we have), only a handful of teams are worth 1 billion plus.


Where is he wrong?

 

[Melrose Munch]

He probably doesn't want the NHL that badly. Already has the management agreement to the arena and Houston is a large market. If there is no one else that wants to do a similar ATL project near Houston, then there is no pressure point for him.
It's the reality of the sports world when it comes to NHL/NBA as they can and should share an arena, but the first to market holds the arena management agreement these days. Sometimes you get a Smith who covets an NHL team and others you end up with a TF who doesn't (from appearances).

All true, but he wants an arena. Not sure Harris County will give him one without an NHL team.

 

[StreetHawk]

Not supposed to piss off potential customers.

And now the NHL is talking out of both sides of their mouth about expansion, they moved Phoenix, and according to Forbes (which is all we have), only a handful of teams are worth 1 billion plus.


Where is he wrong?

Forbes is typically under on their estimates. Maybe best to use the NBA rankings which has Dal and Hou at 7 and 8 overall on those rankings. So, whatever Dallas is worth in the NHL, pretty much slot Houston in that range as well.

 

[aqib]

Potential for growth can also drive up the price despite having the same demand and supply. I guess you can make an argument that drives up demand, but for such expensive buy i don't think it really moves the demand much since the number of potential buyers are limited.

Potential growth is what drives the demand. There are more media outlets now than there were a few years ago. Streaming has become a bigger component of broadcasting and everytime you add more outlets the rights fees go up.

 

[StreetHawk]

All true, but he wants an arena. Not sure Harris County will give him one without an NHL team.

Is there an issue with the Toyota Center than a renovation would not be sufficient?

It opened in 2003 and we've seen plenty of the other ones built in the 90's get renovated. I don't get why a currently 21 year old arena would need to be replaced. A reno should be able to give them another 15 - 20 years on top of their lease, which I would imagine was 30 years to 2033.

 

[dj4aces]

Not supposed to piss off potential customers.

And now the NHL is talking out of both sides of their mouth about expansion, they moved Phoenix, and according to Forbes (which is all we have), only a handful of teams are worth 1 billion plus.


Where is he wrong?

If one or more of the Atlanta groups is willing to pay, yet he's not, that's where he's wrong. While I do feel like the potential value (and the idea of a $1.2bn expansion fee) is above where it should be before a franchise has any players on its roster or a single victory under its belt, those willing to pay will win.

 

[TheLegend]

Yes but Houston is ready now. Smith would have been more than happy to get an expansion team for 2027 to properly prepare. Again we're all reading tealeaves hear but Fertitta does not appear to be willing to pay the going rate for an NHL team.

At the time the TED vote failed they weren’t. Stories about a new ice system at the Toyota Center in Houston didn’t appear until later.

That…. And Fertitta wasn’t willing to pay $1.2 billion.

 

[aqib]

At the time the TED vote failed they weren’t. Stories about a new ice system at the Toyota Center in Houston didn’t appear until later.

That…. And Fertitta wasn’t willing to pay $1.2 billion.

I meant the arena configuration is ready for hockey. Sure they needed an ice plant that would be done in one offseason.

The $1.2 billion is really the only factor. Everything else could have been worked around