The NHL expansion process has reached its final and most crucial phase, in which hopefuls met face to face with the league’s executive committee to make their respective pitches.
Hours before the board of governors meeting in New York, Quebec City, represented by Quebecor president & CEO Pierre Dion and vice chairman Brian Mulroney, and Las Vegas, led by investor Bill Foley, made detailed presentations to NHL’s executive committee, which comprised of NHL executives and several team owners. The pitches boiled down to the specifics of each group’s business plans, from how they will pay the expected $500m expansion fee to the ways they’ll manage and exploit possible revenue streams.
Foley, in his presentation, pointed the fact that Las Vegas has secured almost 14,000 deposits on season tickets; it has a $375 million, state-of-the-art arena that is on target to be completed by mid-April and will seat 17,500 for hockey; and the city’s economy is healthy and ready to support the NHL.
Las Vegas has been shunned by major league sports in the past because of the pervasive presence of gambling in the city and concerns about the local economy, a transient population and an extremely competitive market for the entertainment dollar.
“We got asked a lot of really good questions, we had answers for all the questions,” Foley said. “It was a complete presentation. We talked about our commitment to Las Vegas in terms of the fact that I’m a resident there and living there, arena background, economics of the team, ticket drive, 13,500 tickets. So we feel it went well.”
Foley added that the members seemed impressed with the response from the fans with their season-ticket commitments as well as the progress on the arena, which is being built by MGM Resorts International and the Anschutz Entertainment Group. AEG owns the Los Angeles Kings and will run the arena in Las Vegas. Foley already has negotiated a lease to play in the building.
Quebec City faces entirely different issues being the Canadian dollar as the big obstacle. For starters, the $500m expansion fee balloons to more than CAD671 million at today’s exchange rate. And if a team eventually is placed in the city, there’s a chance that the exchange rate could have a crippling effect on its ability to pay salaries, which are due to players in American funds.
Mulroney said the lower value of the Canadian dollar will not affect Quebecor’s bid, adding that the group has done everything in their power to bring back an NHL team to Quebec City and the decision is now in the hands of the league.
Quebecor, as part of presentation, has brought a copy of the exhibition game at Centre Videotron between Montreal and Pittsburgh.
“They were very impressed with the videos we put forward, including [Monday] night’s game,” Mulroney said. “They saw the excitement and the beauty of the [arena].”
NHL Commissioner Gary Bettman said that NHL continues to explore the possibility of expansion but no firm timetable has been set for the process.
“We are in the process of gathering information. There have been no deliberations as to whether or not we want to expand, how many teams, or where. There’s much work to be done,” said Bettman. “The process will lead us in many directions, raise lots of questions that have to be answered, and at the end of the process, whenever that is, the Board will be in a position to consider, to deliberate and to make a judgment.”
Many have characterized the league’s interest in expansion as a cash grab but the money is absolutely part of the equation. The hefty buy-in is one reason why, the NHL formally opened the expansion process last June, with only two groups came to the table with completed applications. And the NHL wanted to weed out the tire-kickers by creating a narrow window for application and demanding to see the color of the applicants’ green right away, in the form of a $10m application fee, $2m of which was non-refundable.
Bettman said expansion requires a three-quarters affirmative vote from the Board of Governors, but the members of the executive committee would first have to make a recommendation to the group. The Board of Governors meets again Dec. 7-8 in California.
