Thoughts on San Diego?

[Ciao]

So I think that's true - but that it's up to the league to run it's own affairs - which includes its own constitution and by-laws.

So if the league wanted to amend its own constitution to remove the 50 mile rule it's free to do so.

If the league however just wanted to pretend the 50 mile rule didn't exist and put a team in Hamilton without consent ot Toronto / Buffalo - I think there's a good chance of a lawsuit. It wouldn't be under competition law however, just under plain-old breach of contract.

It's worth noting however (and some people already have) that the NHL is an extremely small and exclusive club. There are only 32 owners, many have been in the league for decades, and they meet multiple times per year. There's zero chance that a majority of the league decides to say "screw the Leafs - we're going to put a team in Toronto no matter what they say". That's probably double true when you consider MLSE ownership in Bell and Rogers give hundred of millions of dollars to the league every year. You just don't screw over your colleagues and business partners like that.

I think this is the correct answer.

I'm amused that Americans somehow think that Canadian courts are bound by American anti-trust law. It doesn't apply here.

 

[Tawnos]

I said it "stands to reason" because...

You can reason that the NHL would follow it's own rules, right?

Buffalo and Toronto have overlapping 50 miles.
New York and Philadelphia have overlapping 50 miles.
Boston and Hartford used to have overlapping 50 miles. (That's one's different because of the merger).
Ottawa and Montreal don't have an overlap from city center to city center, but do from city border to city border.

Hence, stands to reason that overlapping is okay as long as the cities are over 50, and the arenas aren't in the overlap.

OR the NHL just doesn't follow their own rules, at which point arguing over rules they don't even follow is moot.

Even if the rules were the same for the 60s and 70s expansions (an assumption I doubt) the current league constitution does NOT say that teams are owed indemnity in this situation. All it says is that a team can't be put in another team's territory without that team's consent. In other words, it's entirely possible that the Leafs, Rangers, Bruins, and Canadiens all agreed to those expansions without the need for indemnity fees.

There's other politicking within the owners group that was likely going on and those owners may have been swayed. Like it's easy to envision the Rangers ownership group acceding to the simple need to expand regardless. Same with the Leafs. Plus, provided the same rules even existed, you wonder if the Leafs ownership was kicking itself when the Rangers managed to pull an extra $5m out of the Islanders expansion just a couple of years after the Sabres. You already mentioned the merger making it a different situation, but that doesn't mean the Bruins (and both the Rangers and Islanders) didn't have the chance to shut down Hartford as an option. It only means that they agreed to do it, likely to grease the skids of the merger.

In Ottawa's case, the league did a whole expansion process for two teams, demanding a $50m expansion fee up front, and at the end of the process only two cities were willing to pay that much. The Canadiens likely were in a position of getting the $2.38m share of the expansion fee or getting nothing at all if they demanded more.

That's a long answer to essentially say that you don't really know the league didn't follow its own rules. It's entirely possible (and likely) that they did, it just didn't need a larger expansion fee to make those situations happen. Which leads back to the topic of San Diego. How likely is it that the Kings and Ducks will allow a team in San Diego without an indemnity? I don't think either is going to reject the idea outright, like I suspect the Leafs do with GTA2 and maybe even Hamilton. But the indemnity is a potential barrier to expanding there. Would the Kings and Ducks just accept a larger share of the expansion fee instead?

 

[Martin Veillette]

The obvious 3 favorites for the next expansion are Atlanta, Houston and Phoenix. San Diego is a possibility too.
But I think the real dark horse is : Austin, TX
Fastest growing city in America. No other sports pro team around except for the MLS that is doing really well. San Antonio is not far either.

 

[Yukon Joe]

I think this is the correct answer.

I'm amused that Americans somehow think that Canadian courts are bound by American anti-trust law. It doesn't apply here.

So Canadian courts aren't bound by US anti-trust law.

But the NHL, being an organization headquartered in the US, and with 25 US-based franchises, sure as hell is.

 

[Yukon Joe]

The obvious 3 favorites for the next expansion are Atlanta, Houston and Phoenix. San Diego is a possibility too.
But I think the real dark horse is : Austin, TX
Fastest growing city in America. No other sports pro team around except for the MLS that is doing really well. San Antonio is not far either.

So Atlanta is the definite front-runner because there's a couple groups trying to get an arena built. Houston at least has some smoke since there is an arena that would work and an owner that's shown some mild interest. Both are also top 10 markets in the US.

But to your San Diegos and Austins... I mean anyone can look at a map and look for cities of a certain size and up. But you have to go further. Is there an arena? Is someone trying to build an arena? And most importantly - is there someone out there willing to bay $1.2 billion in order to own a NHL team in that market?

I haven't heard anything about either city.

I mean I can throw out Kansas City, Portland, Omaha, Oklahoma City, Milwaukee, you name it. But unless someone wants to pay enough money to own a team there it aint happening.

 

[awfulwaffle]

The obvious 3 favorites for the next expansion are Atlanta, Houston and Phoenix. San Diego is a possibility too.
But I think the real dark horse is : Austin, TX
Fastest growing city in America. No other sports pro team around except for the MLS that is doing really well. San Antonio is not far either.

It's the fastest growing metro, not city. And I'm not sure if it's sustainable. Oracle is leaving, Tesla laid off 2,700 workers. It's growth was tied to the TX tech boom, but it's clear that these tech companies realize that TX isn't as great as it's advertised.

 

[Tawnos]

So Atlanta is the definite front-runner because there's a couple groups trying to get an arena built. Houston at least has some smoke since there is an arena that would work and an owner that's shown some mild interest. Both are also top 10 markets in the US.

Fertitta's renewed interest is also arena construction based, because he believes that having a hockey team in the building will give him more clout with the city.

 

[aqib]

So Canadian courts aren't bound by US anti-trust law.

But the NHL, being an organization headquartered in the US, and with 25 US-based franchises, sure as hell is.

Isn't there usually a clause in legal agreements about which jurisdiction's law applies?

 

[Yukon Joe]

Isn't there usually a clause in legal agreements about which jurisdiction's law applies?

Yes but that's more an issue of contract law. You agree that your contract is bound by the laws of a given state, and that dispute need to be handled by that state's courts.

But competition law is a regulatory law. You can't just opt out of it by signing a contract. Just as an extreme example, if you're American and I'm Canadian, and we sign an agreement to go commit a crime (stealing something and then crossing the border) we can't in that agreement include a clause that we are only bound by the laws of Canada.

 

[aqib]

Yes but that's more an issue of contract law. You agree that your contract is bound by the laws of a given state, and that dispute need to be handled by that state's courts.

But competition law is a regulatory law. You can't just opt out of it by signing a contract. Just as an extreme example, if you're American and I'm Canadian, and we sign an agreement to go commit a crime (stealing something and then crossing the border) we can't in that agreement include a clause that we are only bound by the laws of Canada.

How does competition law reconcile with franchise agreements. Like McDonalds can't stop me from opening a burger restaurant across the street from one of their locations but (to paraphrase Judge Baum) I can't buy a McDonalds franchise in Nebraska and move it to Midtown Manhattan across from one of their other franchises.

 

[Yukon Joe]

How does competition law reconcile with franchise agreements. Like McDonalds can't stop me from opening a burger restaurant across the street from one of their locations but (to paraphrase Judge Baum) I can't buy a McDonalds franchise in Nebraska and move it to Midtown Manhattan across from one of their other franchises.

So regular disclaimer: I'm a lawyer, I don't practice competition law, and I'm not licensed anywhere but Alberta.

As I understand it - when you buy a McDonalds franchise, it's tied to a specific location. You can't just transfer it anywhere you like without McDonald's corporate approval. You don't purchase "a McDonald's franchise" - you purchase "the McDonalds franchise for 1010 Main Street".

 

[Headshot77]

OK so thank you for engaging.

So a lot of these details are very opaque when it comes to pro sports (likely because teams don't want to publicize how much they gut subsidized).

As a general principle though - you can't run an NHL team profitably if you have to pay market rents for your building (outside a mere handful of teams - maybe). Hell that was the issue that caused my beloved Jets to leave back in the 90s. The model seems to be that you control the arena so you get all the revenue - from concessions, concerts, whatever else - plus you might also get revenue from neighboring property - plus hopefully get a break on taxes.

So that's what I think the issue is with San Diego. You'd never be successful owning an NHL team if you had to pay rent to Kroenke.

Now who knows - maybe they can set something up where it's Kroenke's nephew or whomever who owns the team, thus getting around the "you can't own two teams" rule while the team can still benefit from getting all the arena revenues. But that's the issue. And since Kroenke already is going to get all the revenue from the new arena, plus he already has an NHL team, I'm not sure he'd be interested in setting up a scheme where a family member owns a NHL team.

Stan Kroenke's wife owns Wal*Mart. She could easily buy a team if the NHL allowed that.

 

[Lt Dan]

What....

Easy 1:30 drive up insterstate 5 from SD to Anaheim, same state.

1:30 is very very good time I did that drive yesterday and it took me almost 3 hours

As far as being in the same state...east coasters need to see this map more often

 

[super6646]

On a personal note, I’d love to see it. Probably my favourite city to visit in the entire US. Great weather, not too big of a city but still has a somewhat cosmopolitan feel, actually somewhat competent public transportation, friendly ppl, etc etc. Plus they helped Calgary out when we had a main line pipe burst; can they find a way to make me love them more?

I’d certainly plan a trip to see the flames play there if they ever got a team.

 

[Malaka]

Wisco before SD.

 

[aqib]

So regular disclaimer: I'm a lawyer, I don't practice competition law, and I'm not licensed anywhere but Alberta.

As I understand it - when you buy a McDonalds franchise, it's tied to a specific location. You can't just transfer it anywhere you like without McDonald's corporate approval. You don't purchase "a McDonald's franchise" - you purchase "the McDonalds franchise for 1010 Main Street".

Yeah if you buy an existing one. Going forward if the building needs an upgrade or you lose your lease or the existing building isn't suitable for their new format you have some leeway but you need their ok.

 

[No Fun Shogun]

Wisco before SD.

I'm all for closer rivals for the Hawks and more Central Time Zone teams, but the only thing that's a sure thing is that cities that have someone willing to pay a billion+ for an NHL are before those that don't.

Any Kohls cash up there wanting to bid? Would love to see it.

 

[Tawnos]

The problem in Wisconsin is that Milwaukee is the only metro large enough to host a team but going by typical situations, it's not large enough to host both NHL and NBA. It's possible that the embedded hockey history in Wisconsin would give them the ability to overcome that. I'm really curious to see how this goes in SLC, because it could show that it's possible to have NHL and NBA in a smallish medium sized city provided there's something unique to the city's relationship with hockey.

Like San Diego, it's another overlapping home territory situation so there's the possibility that putting a team there would cost extra.

 

[No Fun Shogun]

I would agree that Milwaukee (and Indianapolis) are both near, at, or beyond the oversaturation point if an NHL team gets added, but that's all semantics. All you need is one person that wants to pay a boatload, and either would be at the top of the NHL's expansion list.

Given that we're at the point where it's a ten-figure entry price to get a new NHL team, I already think that financial sense is out the window for incoming owners, tbqh.

 

[Tawnos]

Milwaukee maybe, because of that hockey history in the state. Indianapolis would not be on the top of the league's expansion list even if an owner emerged. This is not semantics. There's a reason that Denver was the smallest city to host both leagues until Utah came along. You need the larger population to overcome the two leagues cannibalizing each other's revenue.

The X factor has to be for the NHL team, because they're always going to be the ones with the smaller revenue stream. Utah has the X factor of winter sports. Vegas, if or when it gets an NBA team, will have the X factor of its entertainment industry. What's Indianapolis' X factor for hockey that would allow it to support both? There isn't one.

 

[No Fun Shogun]

The X factor is, and always had been in this process, the expansion fee. If a loaded Hoosier wrote a billion dollar check to the NHL today, Bettman would be announcing an expansion to Indianapolis tomorrow (maybe Monday, who wants to work over the weekends?).

And note, I am not suggesting that expansion to Indy would be a good economic move. But a billion dollars is a billion dollars, and the NHL had no issue touting Cincinatti and even Omaha as parties that had expressed interest in the past. I get that Omaha is untapped and Cincy doesn't have a same-season competitor, but Omaha is tiny compared to Indianapolis and Cincinnati is on the decline and much more limited in reach compared to Indy drawing from their entire state.

All it takes is someone with money, and the NHL is on board is all I'm saying.

 

[Tawnos]

I understand what you’re saying, but I think you’re entirely wrong in saying that the only thing the NHL cares about is the expansion fee. The viability of the market and where it fits in the NHL landscape are equal parts of the equation.

Omaha and Cincinnati were brought up as places that have shown interest in a show of politeness. That doesn’t mean the NHL is taking those locations seriously behind the scenes. They know that someone thinking about a team in one of those places is a potential owner in a viable market.

 

[HisIceness]

I think the only realistic option in the Midwest would be Kansas City, simply because they have the arena and no NBA tenant is a plus. They'd have to compete with the Chiefs for fan interest but it seems Patrick Mahomes would be a fan, and a potential investor.

I've heard from people who have gone to the college world series that Omaha is a great town. Not sure their corporate status but the metro population is just barely at a million.

Cincinnati would have an instant geographic rival, could revive the Stingers name too.

 

[Sgt Schultz]

Lincoln is about 50 miles from Omaha, and it has almost 300k people, itself. How much would they support a team in Omaha? Good question.

As far as corporate presence, everybody knows Berkshire Hathaway, although their HQ staff is around 25 people. Would the corporation be a supporter with dollars in some way? I dunno, ask Warren Buffett.

Union Pacific is HQ'd there, as are Mutual of Omaha (duh), Werner (nationwide trucking company). and Gallup. I think there are several other insurance companies that have major operations there. Does any of that ensure success? Nope, but there is money there.

I'm not advocating for Omaha. In fact, it would be tough to advocate for it over KC. But, it is not as obvious of a "hell no" as it would first seem.

But, as I said in this or the Coyotes thread, I am not at all convinced the NHL is looking at anyplace other than Atlanta and Houston (34 teams as opposed to 36). If one of those is "rarin' to go" and the other not, or both are and somebody in Phoenix steps forward with $1B and an arena under construction, then the door is open.

 

[Night Shift]

Ehhh too many teams