Let’s talk about contraction

Contraction is a favourite concept of hockey writers around North America. For those who simply want to see higher-calibre hockey, it’s a beautiful dream – fewer teams means higher quality players at the highest level, something that can’t help but result in better hockey. Most recently, though, contraction has emerged as a preferred cudgel with which to beat the NHLPA.

As one nationally-read hockey columnist sees it, the NHL is in grave peril, with one-third of NHL teams losing money hand over fist and others failing to justify the financial investments of ownership. He writes that even if the NHLPA flatly conceded everything the league was asking for today, contraction would still be on the table and that we could be looking at as many as four franchises simply ceasing to exist.

It’s a glorious argument in a lot of ways. It’s not an argument that has any basis in fact, but it is rich in unsubstantiated chutzpah.

NHL contraction in history

That’s not to say contraction hasn’t happened in the past. It has – here’s the full list of NHL examples:

Put another way: in the last 70 years (i.e. since the Original Six era) the NHL has lost one team, the Cleveland Barons. The Barons were placed in Cleveland in 1976; their home opener drew 8,900 of a possible 18,544 fans. Aside from fan apathy, the team’s arena deal was miserable; as early as January 1977 the team was in danger of folding and only an emergency loan managed to keep the team afloat for the entirety of 1976-77. By the end of the following season the team was merged with the Minnesota North Stars.

(Interesting side point: the owners of the failed Barons – the Gund family – did not lose their appetite for NHL hockey; not only would they stay involved with the North Stars but they would eventually be awarded an expansion franchise in San Jose that they would own for a decade.)

Over the last 70 years, only one team in the NHL has folded outright, and that one during a period when the league was competing with the rival World Hockey Association and in a market where the team’s home opener was played to a below-50% capacity crowd.

In other words: contraction is a rare thing. A really, really, really, rare thing.

NHL contraction now

Looking at the historical record, for the NHL to be considering four teams for the chopping block, one of two things need to be true:

  • Four teams need to be in comparable straits to the 1977-78 Cleveland Barons or
  • The bar for contraction needs to be considerably lower.

That’s not to say NHL teams haven’t had financial troubles over the last 70 years. They have. But when they have, the answer has been – in nearly every case – to relocate, rather than eliminate.

It’s not like there’s any shortage of markets looking for NHL teams. As the Edmonton Oilers brass has made clear by flying to Seattle and Quebec City and Hamilton, there are arenas looking for a team.

Billionaire Don Levin – the man who many consider the front-runner for a Seattle NHL franchise – talked about the possibility of relocating a team to Seattle five days after the NHL lockout started. From ESPN:

He wants in on the NHL and sees Seattle as an attractive way to get there — but maybe not the way most anticipate. With the move of the Thrashers to Winnipeg last year and the uncertainty of Phoenix’s NHL franchise, moving a franchise would seem to make sense. But he’s done the research and that’s not his conclusion. "I can tell you there are not teams for sale that are available to move," Levin told ESPN the Magazine on Wednesday. Not the Coyotes? Or maybe one day the Islanders? "My understanding is that the Phoenix deal, [Greg Jamison] has come up with the money," Levin said. "The answer to the Islanders moving is never. They’re not moving out of that market. No chance that’s going to happen." Instead, Levin’s plan centers on expansion. And he’s optimistic it won’t be long after the CBA is settled that the NHL will turn to expansion as the next phase in growing the league. "I would think three years," he said.

Indeed, the expectation – an expectation nudged along by the NHL’s proposed realignment to four conference – is that the league will soon consider expanding, not contracting, and that a 32-team league is the plan at some point over the next collective bargaining agreement.

Okay, the, but why…

Why are we hearing about four teams being eliminated from the league? As I see it, there are two likely reasons:

1) Writers in hockey markets – particularly Canada – have always opposed the “sun belt” expansion. There’s been talk of contracting teams in those areas basically since the NHL awarded the expansion franchises.

2) For writers who identify with the league in the current lockout (I can’t imagine identifying with either side), talking about contraction is a good way to emphasize their belief that the NHL is in grave financial peril, and to emphasize that the players should just shut up and take whatever the league sees fit to give them.

In short: it’s a combination of wish fulfillment and argument that conveniently allies directly with belief. It’s not a justifiable argument based on the history of the NHL (and indeed, all of the major North American sports leagues) or its recent actions.

Recently by Jonathan Willis

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  • yawto

    Why an ice sport would be expanded into markets like Phoenix and Florida in the fist place is beyond me. Not that some people down there don’t love the sport, just not a huge game for the retirement communities.

  • DSF

    As an aside JW, I think one of the prime motivators for the hardline stance taken by the league in negotiations, is that the league does plan to expand to 32 teams at the earliest opportunity.

    Quebec and Seattle are the obvious targets since both have new arenas coming.

    That is not to say we couldn’t still see a couple of teams re-locate.

  • I agree its unlikely, but I’d like to see…

    OUT: Phoenix, Florida, Columbus… Anaheim… (NJ? DAL? TB? NSH?? STL???)

    IN: Toronto2, Quebec, Seattle… Hartford… (Portland/Houston/ Las Vegas)

  • RKD

    Gary Bettman isn’t saying it, but his goal is to expand to at least 32 teams. Depending on when the lockout ends the markets to watch the most will be Carolina, Tampa Bay, Florida, etc. If the Phoenix sale goes through they may not be as big of a concern.

    32 teams divide by 4 equals means the ideal 8 teams in 4 conferences – North, South, East, and West.

    Let’s see how bad the attendance drops after the lockout ends for the teams bleeding red ink.

    Gary would realign to Quebec and Seattle before contracting, both those cities have arenas already built.

  • Mantastic

    contraction is entirely posible with the bad business model that the NHL is built on. just like the world economy, the GMs are spending more then their means and there are fewer billionaires that are willing to put money into franchises, let alone bleeding ones.

    NHL should not be treated like other 1st tier professional leagues because they don’t come close to making those revenues. contraction would make the league healthier but would take very bad circumstances for that to occur

  • DieHard

    Ah yes, the Gund brothers.

    No idea what they had on NHL commissioner John Ziegler in order to let them move the Oakland Seals to Cleveland, somehow get ownership of the North Stars after the Barons debacle, somehow let them sell the North Stars to Norm Green (who moved them to Dallas) and get the expansion Sharks in the same deal that included a dispersal draft.

    You’d think there’s be a number of better ownership candidates available…

  • DieHard

    Given the economics we are and will be experiencing, I can see a couple of relocations and a couple of contractions. A league of 28 teams (mostly viable) would have 7 teams per conference/division. Top 3 teams in each and a wild-card week (best of 3 or 5) could be exciting. If/when the economies improve them expand to 32 teams. Hopefully within 7-8 years from now. I just can’t see expansion in the next few years.

    • Three questions:

      1) Which teams relocate, which teams are contracted?

      2) After having only one contraction in the last 70 years – under exceptional circumstances, too – what makes the current climate so awful that two teams will disappear at the same time?

      3) Why do billionaires and industry insiders alike believe expansion is in the NHL’s immediate future?

  • Mantastic

    Would it make sense to, instead of reducing the number of teams, reduce the number of games that they play? I understand there is a profitability issue, in that this league has very attendance based revenues – but if we were to increase to 32 teams, maybe we play 52 games instead of 82 (call it 4 games against your existing division, plus one game against the other 3 in the NHL’s realignment format)…I guess my question is: do we dilute the product of hockey by showing too many games? Would the players play harder or better if they weren’t playing as many games? Would insurance cost less due to less risk of injury?

  • Mantastic

    The NHL is, and always has been a shady operation. As a Nuck fan, i always think to the story of the 1968 expansion when Vancouver was the obvious choice to be the 7th NHL team, but the city was vetoed by owners in Toronto & Montreal who didn’t want to share the national broadcast. It wasn’t until 2 years later under the threat of the WHA that the door opened for Western Canada to have their own team.

    I think ur exactly right JW. After the owners sign a favourable CBA, they will expand the league to 32 teams. Makes sense. And if they relocate 1 or 2 in the process they will prob be better for it.

    A 32 team league with the majority of teams located in the “ice belt” would be the best thing for this sport. Unfortunatly knowing the way the league is run, by the time they get there nobody will care.

  • RexLibris

    Having lived through the Friends of the Oilers ticket drives and the Les Alexander period, I hope for the sake of whatever fans there are in the cities with troubled franchises that they don’t contract.

    I’ve had this argument with several people who feel that the talent available right now is too shallow to properly equip 30 teams. My argument is that the talent is just now catching up to the expansion to 30 teams and that contraction means removing the NHL presence from future talent pools.

    If the league, and the fans, want better hockey then why not grow the game and introduce it to other markets where kids can see it and try it out? My belief is that contraction would dramatically increase the amount of NHL-ready talent on each team for approximately ten to fifteen years. After that, the sport would have to consider re-expansion or probably risk irrelevance in North America.

    If the CBA is sound, then I would gladly have the league expand to 32 teams. It’s just a shame it didn’t happen sooner when we could’ve lost Souray as an expansion pick.

  • Mantastic

    Contraction would send the wrong message to potential investors. We are becoming a reality driven society in terms of entertainment. As the Big Network TV stations struggle to find audiences,there seems to be a desire for more and more product that costs less to produce.Like Sports. The popularity of UFC is based on the fact that Dana White used staging and theatrics and instilled a bit of old time showmanship to bring his product into the mainstream. The NBA was successful in the 80s-90’s because of larger than life personalities of Magic Johnson , Larry Bird and Michael Jordan.

    My point is that the NHL post lockout will be poised to expand its product because the economics will be there to sell to potential owners. With the TV rights to CBC HNIC soon to be negotiated and up for bid there will be a huge market for the rights to broadcast Hockey here in Canada.

    For the time being hockey is at a stalemate in terms of CBA negotiations.When the players and owners finally agree to a deal we’ll probably see a 8-10 year deal that will see the current owners looking to expansion as another source of revenue to add to their coffers.

    Canada stands poised. Arena building has begun in earnest in Quebec City.Markham awaits permits and suchlike. On the outside may be markets like Hamilton and Saskatoon.

    A new NHL will emerge in the coming years. The desire for Sports product for cable providers will fuel expansion once again. It is my belief that Phoenix will rise from the ashes. and that teams like Columbus and Dallas will find their way through. Its a matter of time before expansion is announced.Its not “IF”.Its “When”.

    32? More like 36.

  • would it not make more sence for the league and owners to contract first then expand?

    I dont see any benifit to the league to relocate there is no money in it.

    listening to Staufer today he had good points for contraction, really good points, basically if I was a fringe/average hockey player right now, I would sh!ting my pants at the threat of contraction.

  • stevezie

    Are memories that short or are our unable to see a connection between present tense sunbelt teams and Canadian teams of the nineties? It was in the lifetime of the average Justin Bieber fan that the Oilers couldn’t draw 10 000 people to a hockey game.

    Sometimes relocation is unavoidable, like in 1996 when no one wanted to own the Jets. Every effort should be made to keep teams from moving.

  • stevezie

    “32? More like 36”

    You nailed it Michael. The real money is in making the US broadcast rights more valuable.

    I would bet that is job #1 for old Gary. And planting enough teams in non traditional markets and keeping them going long enough to get a grassroots thing going (like kids playing hockey similar to Dallas’ situation) is the only way to get more $$ out of US broadcast rights.

    Canada is likely pretty much maximized already, so expansion here would be all about franchise fees.

    • stevezie

      The original expansions were done with the thought of increasing market share in the U.S.. Place like San Fransisco and the Golden Seals.Cleveland and Kansas City.Colorado Rockies? Atlanta and so on.This was done before modern cable/satellite/ Sports Specialty channels. They failed because the markets were so isolated geographically that it failed to draw any interest beyond a few fans in the local market.

      That has changed.Dramatically.NHL Network.24hour Sport Specialty Channels are the norm. The desire for content is a number 1 priority for these channels.wether that is Football,Hockey,Nascar or beach Volleyball it about providing content to the viewers.For the BIG 4 Processional sports its about exposure and market share.More viewers equals greater ad dollars equals more money for broadcasting rights.

      How do you do that? You ensure that you are in markets where your product can succeed and can draw the most amount of viewers.Secondly you ensure your league is in every market that has enough ad dollars to attract more tv broadcasting dollars.

      thus the fight to keep Phoenix where they are at.Thus keeping the Islanders in the New York market. Thus the need to expand into the southern markets like Dallas and Nashville.

      Expansion will happen into the U.S. again. Adding Seattle,Houston,Kansas City and Indianapolis would be huge for the NHL. You need to bring in more of the American mainstream market.

      Canada is a no brainer.Quebec City and Markham will scratch a cheque for whatever amount the NHL wants.

      The end result is that NHL will grab a bigger piece of the Television pie. The idea of contraction is more threat than it is reality based.Relocation as we have seen is more what we have seen as NHL policy. The NHL will be poised to welcome between 4 and 6 teams in the next 10 years. I’d put money on it.

  • stevezie

    It,s never hard to tell when a game is being broadcast from a non hockey city.The camera never pans the crowd because there is no crowd.

    So ,when Bettman claims there are teams that will fold under the current CBA ,he is exaggerating.Imagine that

    • stevezie

      Its really bizarre you mention this because its something we all know and yet when we look at the “reported” NHL attendance figures in 2011-2012 its amazing to see how many seats are actually filled on a nightly basis.For example.Winnipeg sold out every last ticket and yet they ranked 25th in attendance at a capacity of 100%. Yet we look at the Florida Panthers and they drew 16628 fans per game? Really? The Oilers drew 16839 fans at 101 capacity. There is something that smells here and it isn’t turkey in the oven. You “cannot” get me to believe that the Florida Panthers get 16628 fans into watch on average. I am not a PHD or MD or any other kind of D but this I do not believe for a nanosecond. Its a gate driven league. How many of those tickets are bought up by the clubs so they can get the leagues subsidy? We know in Canada that is never the case. Florida? Tampa Bay?

      The amount of crap that the NHL and the NHLPA feeds us would make a pig jealous.Another intance where reality meets fiction.