NHL Expansion

ImageReports came out this week that the NHL is possibly looking into expansion in the near future. My question is why? What makes Gary Bettman and the rest of the NHL executives think that expansion of a league that remains buried in sports coverage is ready to expand? Sure analysts tout the long-term CBA deal in place and the increased television money. But is it really a good time to expand or should they simply look to continue and strengthen the league first?

The biggest driving force you keep hearing in regards to expansion is the increased television revenue coming in for the league. True NBC and its affiliates have made a larger push for the NHL, which brings in more money. And we all know that is what this is really about, money. But the ratings are not all they appear. Read recents reports and they talk about how NHL ratings are up 33% over the 2011-12 season. That is quite impressive, but why are they skipping over last year? Well because the increase is not as drastic. According to USA Today NHL ratings are up over last year at this same time but only by 11%.

I have a few questions for those who hail the increased ratings. Is this increase due to an actual increase in interest or could it be fans are just coming back to the league from after the lockout? Also the increased viewership, isn’t it possible that the increase is directly linked because NBC is pushing the content more which obviously leads to more viewers. Again is there true growth or is it a matter of throwing a product out there and hoping viewers stick. I understand marketing and how it works. By putting the content into more homes they can develop a wider fan base. But is this “growth” solid enough that warrants expansion?

Here in St. Louis we have seen first-hand how the NHL is still struggling. The Blues organization is weighed down by some poor financial decisions (venue lease, concessions, parking, etc.) and despite putting one of the league’s top teams on the ice their attendance is still lagging and the team is struggling to turn a profit. I read an interivew recently that said the NHL salary cap could reach $70 million as soon as 2014-15. This puts the numbers right back to where it was at before the lockout. Sounds good right? It means growth for the league. But these numbers are buoyed by tv contracts. Sure teams like Toronto and New York will have no problem meeting the cap numbers. But the Blues and others? Those organizations will be at a great risk as the cap rises.

And this is really where my point of contention comes for NHL expansion at this time. Until the league can prove that it is stable and that interest is truley growing, it should not risk expansion. The league wants expansion because there are some very rich people interested in buying into the league. The owners would love that because of the PROFIT. The league possibly could also see expansion as an extenstion of their marketing plan. Moving the league into new territories (Seattle or Las Vegas). However how did that work with Phoenix and Florida?? I think the NHL is jumping the gun here. The NHL needs to wait and see how things work after the league has been stable for a minimum of five years before looking to put further teams at risk. I am an NHL fan and believe it is the best live sporting event to watch. However I simply do not see the solid numbers that support possible expansion. This is a turning point for the NHL. Will they continue their growth or shoot themselves in the skates?

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