Gary Bettman has been quoted as saying that Quebec City needs to build a new arena before he can ever consider the possibility of a team going there. This is a curious statement, given that it’s utterly inconsistent with past relocations and expansions. The NHL has seen three relocations during Gary Bettman’s stint as NHL commissioner. Hartford moved to Carolina in 1998. The Hurricanes played in Greensboro for their first two seasons while an arena was built in Raleigh. The Jets moved to the America West Arena in Phoenix, which was completely unsuitable for hockey and stayed there, hemorrhaging money, until an agreement was reached to provide them with a new arena in Glendale, where they have since hemorrhaged money. The Nordiques moved to Colorado and played in an old arena with a small capacity until 1998-99, when the Pepsi Centre was opened.
Expansion teams have been similar – Columbus built a rink after they were awarded a team, Atlanta did the same (although plans may have existed and, in any event, the arena is privately owned by the owners of the team) and Minnesota didn’t have rinks at the time that they were awarded their teams.
Nashville is a bit of a different story – they built their arena before they had a team and then cast about looking for one. They took a real run at getting the Devils and only failed in their hunt because New Jersey was able to use the threat of relocation to leverage a better deal out of the New Jersey Sports and Exposition Authority. They got a list of things including a $12MM renovation of the rink, the right to sell more advertising in the rink, guarantees of minimum revenue streams from suites, club seats and advertising, an annual incremental increase in the percentages the Devils get from concessions, parking and luxury suites, rising from 34.2 percent of gross revenues to somewhere between 40 and 50 percent by the end of the lease and a share in the value of naming rights for an arena.
So that’s seven expansion or relocated teams during the course of Bettman’s reign, with only one of them having a newish facility in place at the time that the team was awarded or permitted to relocate. The other teams were granted or permitted to relocate on the basis of promises or expectations of appropriate arenas to come.
Building an NHL facility is, of course, no guarantee that a team will come. Just ask Hamilton, where the Copps Coliseum, built for the purpose of attracting an NHL team, is now derided as being out of date and unsuitable for NHL hockey. It is, however, in the NHL’s interest for NHL calibre arenas to be built without any commitment from the NHL because it provides them with a bogeyman to use in negotiations with current landlords. The threat of Hamilton was used in Edmonton to help extract government money for renovations to Northlands Coliseum. The threat of Nashville was used in New Jersey. In effect, when one government builds an arena without a tenant, what it’s really building is a weapon that leagues can then turn around and use against current landlords.
The NHL’s options in terms of NHL calibre arenas that don’t have tenants and aren’t located in the territory of other NHL teams are a little thin at the moment. With all due respect to the 15,015 seat MTS Centre in Winnipeg, the Sprint Center in Kansas City might be the only one and it suffers from being in a market in which NHL hockey would probably be about sixth on the radar in a small town that already has two professional sports teams.
If Canadian politicians should have learned anything from the loss of the Nordiques and the Jets, as well as the destruction of taxpayer money that is taking place in Phoenix right now, it’s that the NHL and its owners play hardball. The minute $450MM of public money is poured into a building in Quebec City without a commitment from the NHL to play there (with a lease that locks the team in, strucutured in such a fashion as to essentially render the team immovable), they’ve handed a pile of leverage in negotiations to get a team over to the NHL. With every season, the arena becomes more dated. When it comes to negotiating terms for the lease, politicians likely won’t look at the arena investment as a sunk cost but, rather, something that needs to be completed by installing an NHL team. It’s a recipe for a lease in which the authority that owns the arena ends up getting absolutely hammered.
The NHL’s history tells us that teams can be moved or granted on simply the promise of a new arena. Building an arena, in and of itself, guarantees a city nothing. It does however, wreck one’s leverage when it comes to negotiations to get a team. There’s good reason for the NHL to want an NHL calibre arena in Quebec City and to make whatever noises it can that don’t amount to a commitment in order to get one built. The temptation to do so should be resisted, if one is actually interested in getting an NHL team on terms that aren’t punitive.
To be clear, I don’t blame the NHL for using every ounce of leverage that they can to extract money from government. Free money is free money, after all. I think it borders on immoral for governments to spend a dime on professional sports though. If I was made benevolent dictator of the federal governments of North America tomorrow, the second thing I’d do (after nationalizing the Oilers, firing everyone and building a Red Army type empire), is tax all government subsidies to professional sport at 100%, removing the incentive for states, provinces and communities to pour money into professional sport. I’d also get rid of laws permitting people to write off tickets.
The net effect, I think, would be a world in which the athletes still made good money, albeit a lot less of it, but tickets would be a lot cheaper, as the guys who built cars in Oshawa would no longer be subsidizing the tickets of downtown lawyers in Toronto. The owners of sports franchises would be incentivized to locate in communities where they could convince the most people to spend the most money on their team, rather than the community with the stupidest combination of state/provincial and local government. By pouring so much government money into professional sport and providing so many tax breaks for those who pay money to consume it, we have, in effect, created an industry that has far more money in it than it otherwise would, which comes out of the pockets of taxpayers.
As you might expect, I think a publicly funded arena for Quebec City is almost certainly insane. The government’s own report says that it will be a money loser, unless you ignore the capital costs. It’s not surprising that the premier of the most debt ridden province in the country thinks that that means it will be profitable. If you’re going to justify building it, as Jean Charest proposes, on the basis that a city like Quebec City should have an 18,000 seat arena and you acknowledge that it will be a money loser, it seems to me that there needs to be some explanation of what Quebec City will get with an 18,000 seat rink that it doesn’t get from Le Colisee.
I’m genuinely unsure as to the answer to that question. I wouldn’t think Quebec City gets a lot of big English bands on tour – the only one I see on Ticketmaster for Le Colisee is Muse – but it’s located out in the middle of nowhere with a French speaking population, so I can’t see that the facility is really the problem or the reason for any shortfall in that area. If you leave the NHL and the Olympics aside – you can get the Olympics with the promise of a facilities too although, as Graeme Hamilton notes, a Quebec City Olympic bid has more significant problems – what’s the marginal gain that Quebec City residents will get in terms of entertainment? I would suspect that it’s vanishingly small.