When the Quebec Nordiques and Winnipeg Jets left Canada in the mid-1990s for Denver and Phoenix, respectively, it wasn't because NHL commissioner Gary Bettman dragged those teams across the border kicking and screaming. The simple matter was, no one in Canada wanted to own them.
Interest from potential owners is the single biggest factor that's changed for the NHL in Canada over the past decade. Mark Chipman and David Thomson seek an NHL team for Winnipeg, Quebecor CEO Pierre Karl Péladeau is knocking on the door on behalf of Quebec City, and Jim Ballsillie has made well-documented attempts to set up shop in Hamilton.
The investment climate has changed drastically from 15 years ago, because of the strength of the Canadian dollar and the country's economy. Also key, especially to the smaller markets of Winnipeg and Quebec City, is an NHL economic model with a revenue-sharing system and hard salary cap, affording owners a stronger degree of certainty and protection than under the league's former open-market system.
"We've studied it carefully and clearly the Canadian teams are not nearly at risk to the extent they were [under the prelockout economic system]" said Chipman, chairman of True North Sports and Entertainment in Winnipeg. "There's a very strong built-in mitigation mechanism. If there wasn't, I don't know if we'd be looking at the league as favourably as we are."
In terms of revenue potential, there's no question that adding a team in Southern Ontario - either Hamilton or the Greater Toronto Area - would be the strongest play. But three factors favour teams being placed in Winnipeg or Quebec City instead.
Arenas: Winnipeg offers a six-year-old downtown facility and Quebec City is campaigning for a $400-million 18,000-seat arena. Meanwhile, in Hamilton, Copps Coliseum requires at least $100-million in upgrades to reach NHL standards - $200-million, according to NHL commissioner Gary Bettman - and there are no known plans for a second NHL-size arena in the Greater Toronto Area, though there is land available in the northern part of the city at Woodbine Racetrack and Downsview Park.
Territorial rights: In Winnipeg or Quebec City, the NHL can steer clear of the tricky issue concerning the Toronto Maple Leafs and Buffalo Sabres, which hovers over Southern Ontario. Maple Leaf Sports and Entertainment's legal position is murky at best. But it's also one the NHL apparently has little appetite to test, even though league governors and players see Southern Ontario as a great business opportunity.
Competition: Over the past two decades the NHL was preoccupied with establishing itself in large cities, especially in the Sunbelt. The commissioner hints that strategy is changing. "A market [of]three or four million people might have an NFL team, an NBA team, a major-league baseball team and a hockey team," Bettman said. "I'm not sure that just because the market is bigger, it would be better than a smaller market that had no [other]professional sports, where the hockey would be the only team in town."
While Bettman did not identify franchises, he could certainly have been describing the situation faced by two of the NHL's sad-sack franchises, the Phoenix Coyotes and Atlanta Thrashers. Each faces competition in the market from the other three major pro sports, as well as college football and basketball. The Coyotes and Thrashers are the league's two most likely candidates for relocation, since neither is tied to a long-term lease.
"You cannot blame the commissioner of the NHL," said former Quebec Nordiques president Marcel Aubut, who is now president of the Canadian Olympic Committee. "He'll try anything to keep teams where they are in the NHL. He's very loyal to the people who invest … but at one point if it can't work any more, I think they are going to make a move. For the best of the industry, for the players, and they'll look to where the fan bases are big and strong. And where is that? It's right in Canada."
Research for this series showed the market for a Hamilton team or a second team in the GTA would offer more than enough support to sustain itself, even with the Maple Leafs nearby. There are 800,000 people in Toronto who identified themselves as passionate hockey fans and who have not seen a live NHL game in two years.
But the NHL is clearly leaning in the direction of the smaller Canadian markets.
"What we are looking at now is interest from substantial people who would like to own a franchise," Bettman said. "It's possible that with the right ownership and the right arena arrangement that we could have an additional team in Canada."
"Could Southern Ontario support another team? It's nothing we've studied. My own focus has been to look at the places where perhaps we could go back to the fans who once supported us before."
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