If Glendale finally fails and the NHL goes to Seattle – and I’m skeptical that they will because there’s no arena deal in place there and the existing facility only seats 11,000 – I am very, very doubtful that it’s because of the possibility of a big expansion fee from Quebec City down the road. People seem to keep saying that the NHL wants to preserve the Quebec market for this but it doesn’t make sense. Consider two scenarios:
Scenario A: Coyotes move to Seattle for $220MM, three years from now the NHL puts expansion teams in Markham and Quebec at a price of $350MM each. Total: $920MM.
Scenario B: Coyotes move to Quebec for $350MM, three years from now the NHL puts an expansion team in Markham for $350MM and Seattle for $220MM. Total: $920MM.
The mathematically gifted amongst you will have noticed that, ignoring the time value of money, the total amounts of money are the same in each scenario. There is a strong economic argument against the NHL letting the owners of existing teams relocate to new markets that are dripping in money. Say Phoenix was still owned by Jerry Moyes and worth $150MM. If he moves the team to Quebec and pays the NHL $200MM to let him do so, they’re dividing $200MM amongst 30 owners rather than dividing $350MM amongst 30 owners. You can see why they would want to prevent this.
That economic argument falls apart where, as here, the NHL has already dropped $150MM or so on the Phoenix Coyotes. So, unless I’m missing something, the argument that the NHL would want to preserve the Quebec opportunity for itself doesn’t make any sense at all.Email Tyler Dellow at firstname.lastname@example.org