Wednesday, January 21, 2015

NHL expansion fee for Las Vegas could surpass $450 million


It's been a little while since the NHL's potential expansion to Las Vegas had made news, but with the prospective ownership group preparing for a ticket drive in early February, it should pick up. It's still early enough in the process to wonder if it will ever get off the ground, but there's more reason to believe Vegas has the best chance of any non-NHL market to get a team.

The biggest reason the Vegas team seems more probable than possible at this point is the projected expansion fee it would fetch for the NHL. According to Rick Westhead of TSN.ca, two NHL owners believe the expansion fee will exceed $450 million.
It's been a little while since the NHL's potential expansion to Las Vegas had made news...

    “It's going to be between $450 million and $500 million. I bet it comes in at about $475 million,” one owner told TSN, requesting anonymity because the league does not like owners to speak publicly about such issues.

    A second NHL owner subsequently agreed with the prediction.

    The estimate, if it bears out, highlights the NHL's growth over the past decade, a stretch during which the NHL has effectively doubled overall revenue to $3.7 billion.

Those are some massive numbers, but the large expansion fee won't necessarily guarantee anything for Las Vegas.

There are still a lot of questions to answer about a team's long-term viability in a relatively untested market. What the expansion fee does, is that it opens the door pretty widely for prospective owners Bill Foley and the Maloof family to step through and prove they can make it all work.

The intrigue in Vegas is definitely warranted on the NHL's part. In 2013, Vegas drew nearly 40 million visitors according to the city's Convention and Visitors Authority. The population as a whole is growing as well. It is obviously one of the great entertainment cities in the United States and remains untapped by major professional sports. If the NHL wants to be the first to dive in and give this an honest shot, it will at least be worth their while financially in the short term thanks to that expansion fee.

Consider that the last time the league expanded, bringing in the Minnesota Wild and Columbus Blue Jackets 15 years ago, the expansion fees were reportedly $80 million each. Seeing a number like $450 to $500 million for one team is attention-grabbing and may end up as franchise-sealing for Las Vegas.