A Markham NHL Team: Pipe Dream or Reality?

It wasn’t a shock when the Atlanta Thrashers moved to Winnipeg in 2011. The Thrashers struggled for years in Atlanta and were surrounded by relocation rumors for seasons. And it’s not a shock to hear the Phoenix Coyotes are struggling at the gate: they’re one of the NHL’s least profitable teams.

What’s a shock is a new potential owner coming up short, leaving them in limbo again. What’s a shock is the NBA’s Sacramento Kings new owners announcing plans to move to Seattle. What’s a shock is a the report on Puck Daddy from last Thursday suggesting the NHL has a plan to expand to two Canadian cities.

And what’s especially a shock is the prevailing attitude in Markham, where just a few days ago, Markham city council voted down a motion to stop construction on a new arena. Supporters of the 20,000-seat GTA Centre speak in hushed tones, with phrases like “once in a lifetime opportunity,” or “about as good as it gets.” They’re operating on the assumption that once it’s built the NHL will come knocking, be it for a relocation or a new team.

But in so many words, counting on a Markham NHL teams seems a little like counting one’s chickens before an arena is hatched. There are too many questions surrounding the health of the league, the viability of adding more teams and some prime spots to compete for teams.

Let’s start with the biggest question of them all: will the NHL expand once again? The NHL already has 30 teams, the same number as the MLB and NBA. Only the NFL has 32 teams. It helps that the NFL is far and away the most popular of the four, but their unique revenue-sharing agreements also help a lot too. In the NFL, revenue taken from TV deals is split equally between all 32 teams. Considering how the NFL takes in close to $2 billion a year, that’s a lot of money for each team. The NHL doesn’t have anything like that going to each team.

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So it’s no small wonder the NHL has teams that don’t turn a profit. Going by a recent Forbes valuation, 13 teams lost money last year. For comparison’s sake, the NBA has eight and both three baseball teams and three NFL teams lost money. In so many words, the NHL is not the healthiest league out there. So why would they add more teams? Counting on an already overextended NHL to expand once again seems like foolish logic.

After all, the act of building a nice, new shiny arena doesn’t guarantee a new NHL tenant. Take Hamilton’s Copps Coliseum: built close to 30 years ago to attract a pro hockey team, it’s never done more than host the occasional neutral-site game back in the 90s. These days, it’s home for an AHL team and occasionally junior hockey championships.

And that’s better luck than the Sprint Center in Kansas City. It was opened a little over five years ago at a cost of over $276 million. And despite being readily available for NHL tenants – it has six “five star locker rooms,” whatever that entails – it’s barely been on pro hockey’s radar, hosting a handful of preseason games. And even then, the games barely drew: a little over 11,000 for a Phoenix/LA Kings game and under 10,000 for Kings/NY Islanders match.

Still, if the NHL isn’t likely to expand, it doesn’t mean teams aren’t available. In the past few years, the then-Atlanta Thrashers were sold and moved to Winnipeg. The Phoenix Coyotes still don’t have an owner. And the company that owns the Los Angeles Kings is for sale, too. Even the Toronto Maple Leafs, one of the NHL’s most profitable teams, were sold last year.

It’s not hard to imagine that eventually, the Coyotes will be sold to someone. And what happens then? Do they stay in Phoenix, where they draw the fewest fans of any NHL team? Or do they move?

In the NHL’s recent history, the only time a new arena has been able to lure a team involves those Islanders. In a few years time, they’re moving from Long Island’s archaic Nasseau Coliseum to the new Barclays Center in Brooklyn. But this is an odd case: the arena wasn’t built for a NHL tenant (it was meant for the NBA’s Brooklyn Nets) and is a small host for hockey, seating just 14,500. That’s a smaller number than almost all of the NHL’s current average attendance.

It seems like the NHL likes it when a potential owner shows a little discreetness. When the Jets moved back to Winnipeg, it came from a deal which was largely conducted out of the spotlight. Likewise for the Islanders deal. Compare that to the publicity-fueled plans of Jim Balsillie, who openly took ticket deposits during one attempt, and has failed on three occasions to buy NHL teams.

But even if Markham builds a new arena, there’s competition from other cities. Seattle has just lured the Sacramento Kings and is going to build a new stadium out by Safeco Field. This yet to be built arena is where a Forbes columnist says Phoenix is most likely to end up. After all, Seattle is the 14th largest TV market in the US, with two regional sports channels that could carry games, and there’s plenty of corporate support in town.

There’s also a new arena in Quebec City, the New Quebec City Amphitheatre, currently under construction with a planned opening date of 2015. While the all-important TV coverage is a little curious – would TSN set up yet another regional feed or would Sportsnet East land these games? What about French-language rights? – it’s nothing that would stop a team. And remember: this was the city mentioned most prominently in the Puck Daddy report linked above.

So even when Markham gets the arena built, they’re running against stiff competition for an NHL team. And I haven’t mentioned either the Leafs or Sabres, both of whom would likely demand a territorial fee. Just building an arena is a nice way to start talking about bringing more hockey to Toronto, but there’s a lot of work to be done.

Still, Markham might find a nice new tenant for their shiny, expensive arena. The Central Hockey League just expanded into scenic Brampton, a deal which includes renovations to the aging Powerade Centre. Can we hashtag #MakeItTwo?

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