The NHL is just returning from their Olympic break where game operations were suspended so that the players could represent their respective countries in Sochi.
In a relatively slow news cycle for the NHL at this point, one story did gain some traction, and that is the discussion by NHL executives with the media regarding the potential expansion of the league to Seattle.
This is not the first time Seattle has been mentioned relative to the NHL, the city was rumored to be a potential relocation target for the struggling Phoenix Coyotes franchise prior to the start of this season. I have covered the situation surrounding the Coyotes ownership changes and potential relocation to Seattle, so this will serve as a follow up story to a situation that I have a great deal of knowledge about.
The NHL has discussed the potential for expansion recently especially after the lockout hurt revenues in 2012-13. The expansion fee for a new franchise to enter the league would represent a significant revenue injection for the other owners in the NHL.
The western United States is a target area for the league at this point with the realignment causing the Eastern Conference to have two more teams than the Western Conference. The Pacific Northwest is seen as a having significant growth potential for the NHL, and the key market in the region is Seattle.
The potential expansion of the NHL to Seattle would add a large TV market (12th largest) which will provide greater leverage for the league in their next television rights contract negotiations, and greater revenue from TV advertising.
The addition of an expansion franchise in Seattle would also bring the NHL into another large population center as Seattle has the 15th largest metropolitan area population in the United States. In fact, between the TV market and the metro area population statistics, Seattle would be a larger market for the NHL than 10 other domestic U.S. markets where the league has current franchises in operation.
Heading North
A group of business, civic, and political leaders from Seattle recently traveled north of the border to Vancouver to meet with the front office and executives from the Vancouver Canucks to learn how the team conducts the business of professional hockey.
This trip is another indication that the expansion of the NHL to Seattle is becoming more serious. The business side of an NHL franchise is very unique, and this meeting was a very good idea, especially when members of the Seattle Sports Commission told the local media that some members of the delegation travelling to Vancouver had never seen a live hockey game before.
The rumored ownership team for the prospective expansion franchise in Seattle is Ray Bartoszek and Anthony Lanza. These two businessmen were also the principal people involved when the NHL considered relocating the Phoenix Coyotes to Seattle in the summer of 2013. The qualifications of an ownership group represent a huge hurdle in the decision for a league to award an expansion franchise, it appears that Seattle has a well-financed group in place.
The other big issue in the case for Seattle to be awarded an NHL expansion franchise is the arena situation, which is another huge piece to consider in this process. The NHL has stated that if it were to expand the league, the added team or teams would begin play in 2015-16. This time frame may give Seattle enough time to gain final approvals and construct the proposed new arena near the other two sports stadiums downtown.
However, that brings a new issue to the table, the funding for the arena is based on an agreement between the City of Seattle, King County, and investor Chris Hansen that calls for an NBA team to be the primary tenant of the new arena. Therefore, the public funding agreements would need to be changed should the city be granted an NHL team before they gain an NBA franchise.
The time frame for expansion is appropriate because it will take a couple of years to hire personnel to staff the front office and the business operations side of the team, organize a marketing campaign, and sell luxury suites or season ticket plans.
The expansion fee is expected to be very large with estimates in the media of close to $250 million. Then factor in approximately $500 million for the new arena, and Seattle is poised to make a huge investment in professional hockey.
I have reported on the potential expansion of the NHL before, and the league will most likely expand by two teams in 2015-16. The media speculation is that the NHL will most likely select Seattle and then either Quebec City or Kansas City with the other expansion slot.
The result of all of this, in the end, it looks like Seattle is going to have an NHL hockey team to cheer for in the near future.
(Credit to NBC Sports.com and Seattle Times for some background information)