Las Vegas makes big bet on NHL expansion

You can be sure there will be the requisite glitz and glamour accorded most Las Vegas premieres.

But will the National Hockey League’s expansion into Las Vegas have staying power on the strip? Or will it follow the script of many Vegas shows: full of hype at the beginning before quietly going dark and fading away.

Remember this Kumbaya moment the NHL and Las Vegas franchise backers are enjoying with Wednesday’s news. By many sensible metrics, putting an NHL team in Las Vegas will be a giant struggle. But for $500 million US, the NHL will try again to force hockey into a market where the game has no history or culture.

Other franchises struggling

Despite years of promotion and effort, NHL teams in Carolina, Columbus, Arizona and Florida continue to tread water.  Last year, Carolina and Arizona had the fewest fans by a wide margin — nearly 400,000 fewer than teams at the top of the league.

Sure, there are fleeting moments of success, but these franchises seem to perpetually teeter on the brink of financial disaster. Would any sensible investor put money into any of these franchises?

The NHL’s other desert foray has been especially dubious. Now called the Arizona Coyotes, the team’s decade-plus in the desert has been a story of bankruptcy, civic disputes, shrinking attendance and waning interest. The franchise even turned NHL great Wayne Gretzky into a loser when he was coach from 2005 to 2009. After years, the team has finally found ownership stability, but the road to financial viability is a long one.

Will Vegas be different? Consider some numbers. About 600,000 people live in Las Vegas, which jumps to about 2.2 million when including the surrounding counties. Very few of them actually play the game. The most recent numbers from USA Hockey report only 1,305 players registered in Nevada in 2015-16.

But longtime Vegas residents and sports watchers insist this can work. The first advantage is the $375-million US, state-of-the-art T-Mobile arena. The 17,500-seat, 44-luxury suite facility sits just beyond the bright lights of the casino-laden strip.

Ed Graney has been the lead sports columnist at the Las Vegas Review Journal for more than decade. Graney points to Bill Foley, the billionaire owner of the new franchise, as a “guy who doesn’t get into things to lose,” someone with a business resumé replete with successes.

1st major sports league in Vegas

This is the first time one of the four major sports will have a team in Las Vegas. The city has had a few minor hockey teams, all which have struggled. The East Coast Hockey League team announced last year it would cease operations.  The city also had an International Hockey League team from 1994-99 before it folded because it had no arena.

Graney insists this time is different.

“The season-ticket drive showed me a lot,” he says. “I think he was hoping to get 7,000 or 8,000 commitments [and] he got 14,000, so I do think there are fans who are committed,” Graney says.  “When you have an owner like Bill Foley with his track record of success, put it this way: if it fails, then they couldn’t have done anything else.”

Graney says it’s important to note that none of the tickets have been sold to corporations or casinos. The 14,000 includes all partial and mini-pack offers.

“It’s people who have lived here their whole lives and they have always wanted major league professional sports,” Graney says.

Which doesn’t mean hockey is necessarily the first choice.

“I would be lying to you that if we were sitting at an NBA meeting, there would be a little more excitement, because this is a basketball town,” Graney said. “But it’s not. It’s hockey.”

Yes, steamy Las Vegas will have to settle for hockey. Success will be difficult and hard earned.

A small market

“The state-of-the-art facility aside, it’s by every measure  a small market, a very small television market and a lot of competing entertainment options,” says Maury Brown, who writes about sports and business for Forbes. “It could turn out very bad for them.”

Brown also says that attracting tourists to the hockey rink will be a challenge. “Will people on vacation want to hang out in a casino, go to see a show or decide to pick hockey? That will be difficult.”

There are other issues lurking, most notably the other major sports kicking Vegas’s tires. Brown says NFL expansion to the desert would hurt an NHL team.

“If the Raiders move there, I think it could be potentially disastrous,” he said. “You are already working from disadvantages. It will get back to the competitive nature of the team. If they aren’t doing well, which is hard as an expansion team, I think in five years you could see a team that is struggling.”

Given what we know, that could be the one safe bet in all of this.

 

Article Written by Jamie Strashin of CBC Sports

0