I spent over 25 years in the NHL and was with the LA Kings when the Mighty Ducks of Anaheim received their franchise in 1993. The buy-in for a new franchise has changed dramatically since then.
Case in point, the National Hockey League Board of Governors voted unanimously to approve Seattle as the 32nd franchise in the 101-year history of the league. The team, as yet to be named, will begin play in 2021. The team had originally scheduled to open in 2020, but the additional time will enable Seattle to complete renovations on their arena as well as new practice facilities.
The Seattle Hockey Partners group paid a whopping $650 million for the privilege of getting a piece of paper welcoming them to the NHL. Seattle paid an entry fee 20-percent higher than the $500 million Las Vegas Knights paid just two years prior. Meanwhile, it will cost Seattle more than another $800 million to renovate the KeyArena and build a state-of-the art practice facility.
The fans rewarded the team by purchasing 10,000 season tickets in just 12 minutes!
A History of Hockey
Now, getting a franchise in the NHL has seen many variations. The Original Six teams in 1942–43 were Boston, Detroit, Chicago, Montreal, Toronto, and New York, and it stayed that until 1967. Expansion talks started in 1963, although many owners were not in favor of bringing other cities into the league. Only expansion by Major League Baseball and the National Football League helped fuel the expansion discussions.
In February 1966, expansion franchises were awarded to Los Angeles, Minnesota, St. Louis, Philadelphia, Pittsburgh, and San Francisco-Oakland, with play beginning at the start of the 1967 season. Of these six new teams, all are still in their original cities except for Minnesota and SF-Oakland. They each paid one Original Six member team a $2 million entry fee.
Disney on Ice
In early 1993, the Los Angeles Kings organization was in contact with the Walt Disney Company, who were looking to place a team in the NHL based upon the success of their movie “The Mighty Ducks.” The Kings brass were heavily courting then-California Governor Pete Wilson and WDC Chairman and CEO Michael Eisner in hopes they would see the value of having an additional NHL franchise in Southern California.
There was one catch though: Disney would have to pay an indemnification fee to the NHL and the Kings to waive the radius clause that prohibits another NHL franchise within 50 miles. The Honda Center in Anaheim is 35 miles from LA the then–Great Western Forum.
The NHL Board of Governors, of which then-Kings owner Bruce McNall was Chairman, approved the new The Mighty Ducks of Anaheim franchise in 1993. WDC paid a $50-million dollar entry fee, with the NHL and the Kings each receiving $25 million each. Little did anyone outside of the NHL realize that the Kings and McNall were on the verge of bankruptcy, owing over $236 million dollars after receiving fraudulent loans from six different banks.
The Seattle group is more solvent backed by strong ownership in billionaire David Bonderman (net worth, $2.5 billion) and Hollywood producer Jerry Bruckheimer (net worth, $900 million). Project funding for the arena also comes from the Oak View Group, which includes equity partners Madison Square Garden, Live Nation, and Delaware North — a concessions company owned by Boston Bruins owner Jeremy Jacobs.
So it’s suffice it to say that the almost $1.5-billion-dollar investment by the Seattle Hockey Partners might be a small price to pay if history can repeat itself, given the success of the Las Vegas Knights who went to the Stanley Cup Finals in their inaugural season.
Who knows? September 2021 is just around the corner.
To learn more about pursuing a degree in sports leadership at Johnson & Wales University College of Online Education, contact us at 855-598-1881 or email@example.com. You can also fill out the “Request Info” form on this page.