SEATTLE—This is the home of the NHL’s youngest franchise, the perfect setting for the league’s biggest power brokers to be meeting about the birth of new teams and the financial windfall further growth would provide them.
And yet, expansion wasn’t a formal topic on the agenda of Monday’s Board of Governors meeting.
What was discussed was artificial intelligence and its potential impact on the NHL’s business—from content generation to digital ticket optimization to game presentation. A presentation from the league’s apparel partner, Fanatics, was also given, and NHL financials and future salary cap projections were discussed.
Commissioner Gary Bettman and deputy commissioner Bill Daly will only be made available for comment after Tuesday’s meeting, but it’s anticipated they’ll confirm then that the players’ debt to the owners from the losses incurred during the pandemic has now been fully paid off, thus eliminating escrow and allowing for the cap to rise by five per cent—from $83.5 million to $87.7 million for the 2024-25 season.
Again, expansion wasn’t a front burner, but there are over two billion reasons it will become a more dominant topic in the near future, with Bettman confirming at the October BoG meetings the NHL continues to receive interest from prospective buyers in (and not necessarily limited to) Houston, Atlanta, Salt Lake City and Quebec City. The Stanley Cup-winning Vegas Golden Knights entered the league for $500 million in 2017, the Seattle Kraken joined two years ago for $650 million, and the next two teams joining could be doing so for over a billion dollars each to be distributed amongst NHL owners.
Relocation also wasn’t on the docket, but it’s a possibility that can’t be dismissed at this stage, with the Coyotes still searching for a permanent home in Arizona.
They’re currently playing at Mullett Arena, a college rink with a 5000-patron capacity, and they don’t have a solution in place for a new arena yet after the city of Tempe rejected their $2.1-billion development proposal last May.
“We are very disappointed Tempe voters did not approve Propositions 301, 302, and 303. As Tempe Mayor Corey Woods said, it was the best sports deal in Arizona history,” said Coyotes President Xavier Gutierrez then. “What is next for the franchise will be evaluated by our owners and the National Hockey League over the coming weeks.”
When asked by Sportsnet on Monday if he was confident a solution would soon be in place, Gutierrez refused to comment.
“It’s a good market, and if we can make it work, we’ll make it work,” Bettman said before the Stanley Cup Final in June. “We’ve had our challenges.”
How much longer the NHL can deal with them being unresolved is in question and will be a topic raised with Bettman and Daly following Tuesday’s meeting.
Pressure from the NHLPA on this front appeared to be mounting in June, when director Marty Walsh said, “If we don’t have, in the near future, a new location, we have to have a serious conversation. These players can’t continue to play in a college hockey rink as National Hockey League players. You just can’t do it. It doesn’t look right. It doesn’t feel right.”
Whether or not the possibility of relocating the Coyotes to another city is discussed at Tuesday’s BoG meeting—it’s not expected to be—it is still a subject of interest to NHL owners, who want to see revenues increase exponentially in all markets.
According to Sportico, the Coyotes continue to be the least valuable franchise in the NHL, accounting for $675 million of the $41.9 billion all 32 teams are worth combined. And while their business has estimated to have grown by over $200 million from 2022 to 2023, the revenue is far from being maximized the way it could be if the team were playing in an actual NHL arena.
The idea that it can grow significantly in a more traditional market is also anything but farfetched, and the potential economic uptick from a franchise sale and relocation could be considerable.
When True North Sports bought the Atlanta Thrashers and turned them into the second coming of the Winnipeg Jets, they paid $110 million for the franchise and an additional $60 million to the league as a relocation fee. That was in 2011, and fees would be exponentially higher now.
The Ottawa Senators weren’t relocated this past fall, but they were purchased by Michael Andlauer for much more than their 2022 Sportico valuation of $655 million. Andlauer ended up paying $950 million.
While expansion and relocation aren’t central topics to this week’s meetings in Seattle, they are subjects several governors in attendance are more than interested in.
Others expected to be discussed Tuesday are the 2024 NHL Draft and NHL participation in the next Olympic Winter Games.
The NHL is still hoping to have the Draft in Las Vegas but still needs to cement a location there for it. As for Olympic participation, Walsh recently said, “Players are very eager to play,” but the league will have to be assured by the International Olympic Committee and the International Ice Hockey Federation that certain expenses will be covered while they shut down operations for three weeks in-season.