Should the NHL expand, relocate, or contract?

It is expected that the NHL will announce expansion of the league, presumably by two teams, at some point in the not so distant future. Markham and Quebec are the anticipated locations, with arenas being built, and an expansion draft to follow.

Seattle is in the mix for an NHL team as well, but I expect that is the league’s fallback position for the Coyotes at this stage.

I’ve heard many arguments that the league should relocate or contract by two or more teams. Cities like Nashville, Florida, Phoenix or other non-traditional hockey markets are usually cited as being unfit for inclusion in the NHL. Concerns range from the financial viability of the current teams in those markets to a dilution of talent amongst what is believed to be an already dwindling pool.

So, this leads me to wonder two things: Is it better for the league to expand, contract or relocate? And is the talent pool of the NHL actually that small?

There is no shortage of people, especially in Canadian cities, who would somewhat offhandedly say that the league should fold two teams and have a dispersal draft. This usually revolves around two key ideas: that the market in question cannot, and will not, improve to the point of being a viable location, and that the talent pool is already too diluted due to the number of teams in the league.

On the first point, the logic seems to be that those markets can’t survive right now and should just be cut loose. Forgive me for being curt about this, but that is a pretty shallow way of looking at things. Fifteen years ago the same argument could have been made, and probably was, by members of the Board of Governors of some American NHL cities around the league regarding the teams in Edmonton, Calgary, Vancouver, Winnipeg, and Quebec. At the time many American NHL franchises were contributing money to a currency equalization fund that acted as a fiscal lifeline to their poorer Canadian counterparts. Had this fund not existed it is entirely likely that there would have only been three or four teams in Canada at the time of the 2004-2005 lockout, rather than six.

The reality was that the economics of the time made NHL teams in those markets tenuous at best, and disastrous at worst. Two of the teams relocated and it sent a deep psychological shock into the subconscious of the nation. Personally, that experience has given me a deep sense of empathy for any fan whose team is in danger of relocating.

So it seems to me to be a little out of place, or even crass, to turn the argument of viability around on to some struggling teams in non-traditional markets when the economics briefly turn in the other direction. Granted, the fan base does not exist to the same extent in many of these areas as it does in Canadian cities, and the franchises often have to work twice as hard to get half as far. But so did the Oilers, Canucks, Sens and Flames when the loonie was on par with the peso and Canadian teams were passing the hat around the community in order to keep the creditor wolves at bay. And there is nothing to suggest that new locations, regardless of geography, can’t become good hockey markets, given enough time.

What today is a struggling market may grow to become a strong NHL partner in the future. Nashville was laughed at as an expansion franchise. It seemed an absurd venture, doomed to fail. During the Predators’ first few years in the league, every newspaper article I read about the home team’s visit to Nashville invariably spent more time talking about the Grand Ole Opry than the product on the ice. The market was treated with little, if any, real respect. Yet today, due in part to the herculean work of David Poile and his staff, Nashville has one of the loudest, most involved and informed fan bases in the southern U.S. NHL markets, perhaps in the league. They may not be many, but they are devoted, and the arena sells out. Those fans could put some Canadian fan bases to shame. With that kind of following corporate sponsorship, the proverbial other financial shoe needed to drop, will eventually follow. 

It took nearly ten years after the Gretzky trade to Los Angeles for the first player born in California to be drafted in the first round of the NHL Entry draft. Yet the involvement in hockey of players like Jonathan Blum, Jason Zucker and Emerson Etem is alrgely attributed to Gretzky’s time in Los Angeles.

Perhaps Nashville’s playoff run two years ago may have inspired a local seven year-old to lace up skates, rather than football cleats. We may not see the results of that introduction for a generation.

A market may, at first glance, appear to be a mismatch for hockey, but the game grows on people. Pulling out of a market because there is no initially apparent fan base that will automatically spring forth to attend games en masse, or that it doesn’t "look" like a hockey environment is short-sighted and self-defeating.

Another reason that the league will expand rather than contract or relocate: money. Let’s face it, the owners want more money, and expanding to Canadian markets isn’t going to create another so-called “welfare” franchise. Not to mention that each owner would get a nice fat cheque as part of the entrance fee.

Relocation means taking a team out of a market and finding it a new home, something the NHL is loath to do due to their heavy reliance on municipal partnerships. There are some minor examples of teams moving to a suburb or nearby community, such as the Devils moving to Newark, or the Coyotes to Glendale, and more recently the Islanders to Brooklyn. However, those are minor in comparison to the more dramatic moves such as the Atlanta Thrashers moving to Winnipeg. The league has shown tremendous reluctance in recent years to shuffle franchises around the map, as it tends to undermine fan loyalty and long-term corporate sponsorship, two critical pieces of the NHL’s revenue plan.

Expansion creates new ownership, a significant amount of media buzz, lends the league a greater amount of credibility when dealing with media partners, and brings in approximately $300 million or more in expansion fees per franchise to the owners.

I think the league can financially survive expansion, based on business practices and a gradual improvement of their overall revenues over the last two decades, from $400 million in 1990 to roughly $3.3 billion in 2012, would seem to reinforce this belief. It must also be recognized that the league’s current divisional structure is somewhat outdated and can create a hardship on some teams when it comes to travel. The way cable and satellite packages are available now, and with the emergence of new rivalries spawning through playoff series, the old paradigm of divisional play and local rivalries is in need of a rethink. The response from the league is to move to four conferences, but they desperately need two more franchises in order to square that proverbial circle.