New NHL team to Toronto takes another step

There's big news in today's Globe and Mail from columnist David Shoalts (as well as Jeff Blair, Roy MacGregor, Paul Waldie, Andrew Willis and Jane Taber) on the idea of another NHL team for Toronto, which I initially wrote about back in October. Then, it was informal conversations between NHL governors; now, it's moved on to a two-and-a-half hour meeting between deputy commissioner Bill Daly and a group of interested businesspeople. Sounds like it's getting more serious by the minute.

The primary problem involved in bringing a new team into southern Ontario is getting the Maple Leafs and Buffalo Sabres to go along with it thanks to their territorial rights. This is where location becomes a key issue, and it's more of an issue for the Sabres than it is for the Leafs. The Leafs already have a huge market to draw from with the massive suburban population of Toronto, and they're in incredibly good financial shape. There's an almost inexhaustible demand for their product (despite the downturn in their on-ice fortunes of late), so another team in the region is not going to kill them. Their main concerns are to keep the team from being placed in downtown Toronto (leaving them with a sizeable competitive advantage, as that's where the big money and the highest concentration of people are) and to get a suitably massive territorial rights fee.

In Buffalo, it's a different story. There's substantial cross-border support for the team, particularly from the Hamilton and St. Catherines areas. Tickets for Sabres' games are easier to come by and much cheaper than the equivalents for Leafs' games at the Air Canada Centre. Thus, a team in Hamilton (as previously suggested by one Jim Balsillie) would be a considerable blow to the Sabres' cross-border fanbase, and a team in Kitchener (as also mentioned in the Balsillie discussions) would be a similar, if lesser, blow. That's been the main sticking point in these discussions so far.

The new proposal suggests putting an arena in Vaughan, which is a suburb north of Toronto. This is considerably different from the Hamilton and Kitchener proposals, as the Leafs are now between the new franchise and the Sabres. Thus, in theory, most of the Southern Ontario fans who currently go to Sabres' games from Hamilton and St. Catherines would continue to do so. The new franchise would draw from Toronto proper and the northern suburbs. Of course, that doesn't take into account issues with the border or the novelty value of a new Canadian team, which would likely cause some of those cross-border Buffalo fans to switch allegiances. Moreover, I'd venture that those fans are much more likely to transfer than the died-in-the-wool Leafs' fans; the Sabres are more of a marriage of convienience than a true love for many in Southern Ontario who can't afford the prices of the Air Canada Centre. Still, in all likelihood, a new franchise in Vaughan would hurt Buffalo much less than one in Hamilton or Kitchener, and the market research cited by Shoalts suggests that a Vaughan franchise might not appreciably impact the bottom line of either Buffalo or Toronto. That makes a lot of sense, considering the number of people in the area and the massive love for hockey they display. See the map below for an indication of where all these different cities are.


View Southern Ontario in a larger map

Now we come to the specific problem of where to put an arena. Shoalts enumerates several possibilities in the article, and I've marked them on the map below. The first key one is on land owned by Victor De Zen, a perhaps somewhat-sketchy businessman (Shoalts mentions that he's facing fraud charges) who's interested in an arena deal, but not in owning a team. His land is at the intersection of Highway 427 and Highway 7, northwest of the airport. Other possibilities include the area around Woodbine Racetrack and the area around Downsview Airport. All of these would be somewhat accessible from downtown; the Downsview site is near York University, while there are plenty of ways to get to Woodbine and the new transit expansions around Pearson Airport would help with that site. The De Zen site is slightly more remote, but not incredibly so; it's not too far from downtown and it's close to several of the northern suburbs, plus its location just off the highway would also help. See the map below for these three locations, as well as Pearson Airport and the Air Canada Centre as references.


View NHL in Vaughan in a larger map

This would be a pricey move, and would take quite a while. At the moment, there are no firm plans for a new arena. It takes time to draw up blueprints, arrange financing and figure out construction details. Shoalts suggests that the cost of an arena alone could be up to $400 million, which is a hefty chunk of change. You then still would have to pay territorial rights fees to both the Leafs and the Sabres, and those aren't going to be cheap; the Sabres need all the fan support they can get, and the Leafs won't give up their ridiculously lucrative monopoly in southern Ontario for a mess of pottage.

The last payment for territorial rights that I know of was the Mighty Ducks, who paid $25 million to the L.A. Kings in 1993. That doesn't seem like much now, but it was half of their franchise fee of $50 million. If you go by the most recent Forbes valuations, the Leafs are currently worth $448 million U.S., a good part of which is due to their monopoly status. They'll want a lot of cash to give that up, and the Sabres will likely want a similar amount. Even the lowest-valued team on that list, the Phoenix Coyotes, has an estimated value of $142 million (perhaps less these days given the franchise's losses); going by the 50 per cent standard would suggest that a group trying to move Phoenix to Toronto would owe at least $71 million to each of the Leafs and Sabres. Shoalts figures that these rights could go up to $200 million (presumably $100 million to each club), but my thinking is that they could run even higher given the stature of the Leafs and the prestige and numbers of the southern Ontario market.

The final question is where the team would come from. NHL expansion at the moment isn't all that likely, which would suggest relocation would be the next logical option. There are plenty of interesting candidates in that regard, including the cash-strapped Phoenix Coyotes, the attendance-lacking Atlanta Thrashers and the New York Islanders, plagued by arena woes. Something has to be done about all these teams eventually, and Phoenix first of all; the team is hemorraging cash, has an owner looking to cut his losses and is being propped up by the league. That isn't a tenable situation.

The big problem here is that this is still Gary Bettman's league. Moving an American team north of the border would be a colossal loss of face for the commissioner, who has spent most of his time in power trying to sell hockey in the Sun Belt and vault it into major-sport status in the U.S. A second team in Ontario makes tremendous financial sense for the league, but it would also be seen as a retreat from trying to gain mass acceptance in the States. In many places in the U.S., hockey's still seen as a primarily Canadian sport, an image that Bettman has bent over backwards to try and remove. Other possible areas for relocation, such as Kansas City and perhaps even Las Vegas, would be available more quickly and wouldn't carry the stigma of adding another Canadian franchise. Thus, the league may not do anything more than look at this until they're desperate. It would be a terrible economic opportunity to pass up, but Bettman and company have always been more about saving face than making smart business decisions, so it wouldn't surprise me if nothing happens on this front for a while. We'll see how it turns out.

SuperSonic Flight

One of my favorite columnists, Bill Simmons, has been writing a lot about the impending demise of the Seattle SuperSonics. Simmons makes some excellent points about why this is an issue everyone, not just Sonics' fans should care about. In his own words:

"Here's why the Seattle situation should matter to everyone who cares about sports: After being part of the city for 41 years, the Sonics are being stolen away for dubious reasons while every NBA owner and executive allows it to happen, including David Stern, the guy who's supposed to be policing this stuff. I think it's reprehensible to watch someone hijack a franchise away from the people who cared about the team and loved it and nurtured it through the years. It belittles not just the good people of Seattle, but everyone who loves sports and believes it provides a unique and valuable connection for a city, a community, family members and friends."

This is a great point. Watching a team pack up and leave is never fun: ask fans of the Hartford Whalers, Quebec Nordiques, Brooklyn Dodgers, Vancouver Grizzlies, Minnesota North Stars, Baltimore Colts, (original) San Jose Earthquakes or Winnipeg Jets, to name just a few. The connection with a franchise is an important part of fandom─the most important part for many. Players come and go, but the franchise is supposed to be consistent. Unfortunately, the business aspect of sport (which is the tail that wags the dog these days) means too many owners these days forget the consistent support their fans have provided through the years and adopt a "What have you done for me lately?" attitude.

This case is made particularly disturbing by the circumstances. As mentioned above, relocation always hurts: however, there are cases (see Nashville Predators, Atlanta Thrashers) where things certainly don't seem to be working out in the current market. Those teams have their share of devoted fans, who would certainly be crushed if their team packed up and left: the problem is that they've only recently put down roots in their current communities and they can't seem to draw the numbers to stay viable over the long term. Thus, if they were to move, it would certainly be sad, but it's more understandable. In the Seattle case, the city has supported the team rabidly for 41 years, even though the on-court product has been less than stellar much of the time. They haven't been unreasonable, either: as was pointed out in the Seattle Post-Intelligencer, local and state officials seem to be willing to consider using public funds to help with arena renovations, as long as it's a less stupid proposal than owner Clay Bennett's demand for the city to fund $300 million of a $500 million arena in suburban Renton (aside: putting your arena in the middle of nowhere is a terrible trend that too many teams are capitalizing on lately. See Senators, Ottawa, and Devils, New Jersey for further details).

Bennett as an owner raises more red flags than "Jumping Jim" Balsillie and his ill-advised season ticket deposits for the Hamilton Blackberries. He's from a city desperate for a team to fill their expensive arena, he appears to be a pure money-grubber unconcerned with the fans or the traditions of a great franchise, and his so-called arena "proposal" was so blatantly ridiculous that it was sure to be shot down, opening the door for the relocation to Oklahoma. He's been targeting teams for relocation for years, and only bought the Sonics after a failed attempt to gain control of the New Orleans Hornets. In fact, minority partner Aubrey McClendon made it clear to the Oklahoma City Journal-Record that the ownership group had never even considered keeping the team in Seattle. "We didn't buy the team to keep it in Seattle, we hoped to come here," he said.

Yet, somehow, Bennett's attempt to loot, pillage and make off with a historic franchise has been overlooked by the powers-that-be. Congress is too busy talking about Jose Canseco's pool party and legislating drug testing to care, while NBA commissioner David Stern is a long-standing buddy of Bennett's, and has been pals with him for over fifteen years. Call me a cynic, but it seems minorly coincidental that the league isn't doing anything to stop this when the man who runs the league was the introductory speaker at Bennett's induction into the Oklahoma Hall of Fame a couple months ago, as Simmons's reader Elliott Smith points out. Conflict of interest, anyone?

There may still be hope. The Seattle Times and the Post-Intelligencer are both reporting that several local groups are trying to intervene, buy the Sonics and keep them in a renovated Key Arena. It may be a long shot, but there's clearly the local support needed on the part of the fans: read Simmons's mailbag if you don't believe me. These fans are truly passionate and their stories are incredibly moving. It's for people like these that sports exist, and it's because of devoted fans like these that pro sports leagues succeed: the NBA should remember where it came from, and the fans who helped it acheive its current prominence.

What's worrying, though, is the idea that this might set a dangerous precedent. Are sports leagues willing to give up on some of their most storied and devoted fans to keep the prospect of almost-entirely funded public arenas alive? The Sonics' situation suggests they are, which is why this is an important for any sports fan. Simmons perhaps explains it best: "This isn't a case that you can say, 'You know, I kind of understand both sides here.' There is only one side. An NBA team is getting hijacked and there's no way of sugarcoating it, defending it or justifying it. Again, if it happens to the Sonics, it could happen to your team. That's why you should care."