NHL Realignment: Why It's Insane for the NHL To Set Itself Up for Expansion
When the NHL's Board of Governors approved the new league-alignment plan, the four-conference look raised a number of questions.
With 30 teams, it's impossible for all four conferences to have an even number of teams. Obviously, the future of the soon-to-be-former-Phoenix Coyotes could eventually change the conferences to a point, but two of the four will have seven teams, while two others will have eight.
Which has immediately opened some discussion about the NHL adding a team or two at some point.
And that would be a terrible mistake.
One reality that has to be understood up front is that the finances of the NHL are going to dramatically change when the first puck is dropped for the 2012-13 season begins.
In April, the National Hockey League and the NBC Sports Group reached agreement on a record 10-year television and media rights deal that lasts through the 2020-21 season. The deal, reportedly worth $2 billion, is a major step up from the previous six-year deal between NBC/VERSUS and the NHL; the league was paid only $75M per season under the previous agreement, while NBC split profits with the league and paid no rights fees. Those days are over, and every team in the league will see an increase in revenue from the new deal.
But how much of a difference will that make?
The new alignment will increase cost for every team as well. The new plan will have each team playing a home and road game against all 29 other teams each season. This will help the box offices for some teams that could use the draw of having big names like Ovechkin, Toews and Kane, Malkin and (hopefully) Crosby and others coming to their arena every year. But as Toronto GM Brian Burke pointed out, it will also increase the travel budgets for every team.
So there's good with the bad under the new deal. It's great for fans, but the financial implications are still to be determined.
According to Forbes Magazine's 2011 "The Business of Hockey" piece, 18 teams lost money last year. Early indications are that some teams that were on the wrong side of the ledger last year, like the Florida Panthers and Winnipeg Jets (formerly the Atlanta Thrashers), might make a move up. But some of the teams that were negative last season are surprising.
By NHL standards, the Capitals, Devils, Kings and Penguins are relative "large market" franchises that lost money last season. The Islanders and Ducks also play in major markets, and they lost money last year as well.
If 60 percent of the teams in the league are losing money, whether it's by creative accounting or inability to compete, how can the league consider adding teams to the mix?
Before the NHL even thinks about considering a 32-team league, they need a new Collective Bargaining Agreement. The salary floor, while great for the competitive balance of the NHL, is an aspect of the current CBA that will be the focus of a lot of discussion. Forcing teams to spend money has helped get 28 of 30 teams into the playoffs since the lockout, but it hasn't helped teams make money.
The NHL needs to adopt a new CBA and, like a glass of fine wine, let it breath for a while.
Give the new television contract and schedule adaptions a few years to work their way in; let teams get a feel for what expenses will be under the new system, and allow them the relative comforts of the new revenue they'll receive from the television contract.
A few years ago, Gary Bettman outlined what the league needs for a team to have a "home" as an owner—a stadium and fans supporting the team. Right now, there are teams in Columbus and New York (Islanders) that have significant issues in more than one of these areas, and Phoenix is still under league control.
If you can fix the existing issues and get a higher percentage of the 30 teams currently in the league making money, then and only then can the league realistically consider adding a 31st and/or 32nd team.
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