January 2, 2016 - 5:55 pm
Bill Foley is not normally a patient guy.
“But in this case, I have to stay patient,” he said.
That has been Foley’s mantra since July 20, when the billionaire businessman filed his formal application for an NHL expansion team. He’s been waiting even longer for the NHL to grant Las Vegas a franchise in order to begin play in 2017.
Foley is ready to pay a record $500 million to attain a franchise. He has been joined by the Quebecor group, which is taking a similar path to bring the NHL back to Canada’s Quebec City. They have been vetted by the league’s 10-member executive committee, which is overseeing the process.
“We’ve been very transparent with them throughout this process and I believe it’s going to happen,” Foley said last month after league meetings in Pebble Beach, Calif., where the NHL did not come expansion decision. “I just don’t know when.”
Meanwhile, work on the team’s proposed home, $375 million MGM-AEG arena, is roughly 75 percent complete. The arena, which sits behind New York-New York and Monte Carlo, will seat 17,500 for hockey with almost 14,000 people putting down season-ticket deposits while selling out the suites. Foley already has opened an office in Summerlin, taking over the former Donald Reynolds Foundation building near TPC Summerlin.
The reasons for the delay are varied and complex. NHL Commissioner Gary Bettman doesn’t want to repeat mistakes made in prior expansion waves. Some owners are unsure if it’s worth splitting TV money with two more teams, despite a $1 billion windfall for the league. And NHL Players Association Executive Director Donald Fehr wants to protect jobs during an expansion draft.
Foley has been asked to be patient. Yet he said the wait might be over this month.
Quick work in short time
Foley has accomplished a lot in a short time, even if it feels like the process is taking forever.
A little more than a year ago, Foley asked Bettman if he could gauge Las Vegas’ interest in hockey by staging a season-ticket campaign.
Fans would be asked to put down a refundable deposit of $100. He also put together a group of local civic and business leaders, the “Las Vegas Founding 75,” who were charged with the task of finding 100 people to commit to buying season tickets. Among the more notable names were the Maloof brothers, Joe and Gavin, who had owned NBA franchises in Houston and Sacramento and who would be Foley’s minority backers, boxing champion Floyd Mayweather Jr. and poker star Daniel Negreanu.
On Feb. 10, Foley, Bettman and other NHL officials kicked off the drive at the MGM Grand. More than 5,000 deposits were secured in the first 24 hours, and the number nearly tripled in a few weeks.
Foley did this without going to the hotels and casinos. That would come much later. That, more than anything, left a positive impression with the NHL owners, showing hockey fans were fueling the drive.
When the NHL returned to Las Vegas in June for its awards show, Bettman announced the NHL was going to initiate expansion process.
On July 20, Foley and Quebec City had submitted their applications. They went through a three-step vetting process and, on Sept. 29, Foley made his 20-minute presentation to the executive committee, which made no decision.
Last month’s meeting in California also yielded no decision after Foley said he provided the NHL with additional information.
Bumps in the road
The holdup appears to be more than the NHL’s cautious approach.
Some owners in the league, which last expanded in 2000, aren’t sure they want the NHL to grow from 30 teams, even with an extra billion dollars they wouldn’t have to share with players. A day after Foley made his presentation for a team to the executive committee, Boston Bruins owner and expansion committee chairman Jeremy Jacobs told reporters he wasn’t sure the league should expand.
“I don’t know if there’s an appetite among all the owners to expand right now,” said Jacobs, who also praised Las Vegas’ bid. Jacobs said he was impressed by Foley, the season-ticket deposits and the new arena.
Then at the Pebble Beach meeting the owners agreed to continue to study expansion while Bettman said internal issues needed to be addressed.
What are the issues?
First is competitive balance. The Eastern Conference has 16 teams and the Western Conference has 14. Adding two teams to the West would solve the problem. But Quebec City, the other team vying for an expansion team, isn’t a geographic fit.
There was hope that Seattle, a market the NHL covets, would apply. However, arena plans in Seattle are earmarked first for an NBA team. Despite financing discussions, Bettman said the league is not waiting on Seattle, which reportedly has two arena plans in the works.
Some believe the NHL might keep Quebec City on hold and only award an expansion franchise to Las Vegas. It would give the Western Conference a 15th team, though the league would have an odd number of teams (31). There is a precedent when the Nashville Predators joined in 1998 as the 27th team.
By adding one team, the 30 owners wouldn’t have to share as much TV and marketing revenue. The Globe and Mail in Toronto has reported the NHL amassed $3.7 billion in revenue in 2014 and revenue sharing has been a major topic in the executive committee meetings.
Then there’s the concerns over Quebec City’s bid, including its market size (760,000, which would fall past Winnipeg as the smallest in the league) and the weakening Canadian dollar. With a three-month old, 20,000-seat Videotron Centre facility, Quebec City is speculated as a landing spot for an existing NHL franchise that can be relocated.
Bettman has said on numerous occasions that there are no franchises that are looking to move. Officials from the Florida Panthers and Carolina Hurricanes, which have struggled financially, said their teams are staying and the Arizona Coyotes, which have been battling with the Glendale city council, are exploring arena options in the Phoenix area.
NHLPA wants a say
If the owners decide to grant Foley a team, how will he stock his roster? How would an expansion draft be set up? How many players could a team leave exposed? And if a player has a no-move clause in his contract, is he eligible to be taken by an expansion team?
That’s where the NHL Players Association comes into the picture. When the league’s current collective bargaining agreement was signed in 2012, expansion was not part of the deal. Deputy Commisioner Bill Daly told the New York Post last month the NHL likely would have to negotiate expansion terms with the union involving player movement.
Fehr said in Thursday he has no problem with expansion. Yes, the Donald Fehr that baseball fans know all too well from years of labor disagreements.
“As a general rule the players are in favor of expansion because it creates additional revenue and additional jobs,” Fehr said. “If you were to be in a situation where expansion had a detrimental effect on revenue and it was impacting salaries, then it wouldn’t make sense.”
Fehr said he doesn’t believe the current agreement that allows players to have a no move clause in their contract would change were there to be expansion.
“If a player has a no move, then it’s a no mover,” he said. “I would anticipate it would be the same if there is an expansion draft.”
Then there’s the question of the salary cap. When the NHL last expanded in 2000, there was no hard cap. The cap stands at $71.4 million. By 2017, the cap could be close to $75 million. If Las Vegas was to get full cap space to fill a roster, that could give Las Vegas a competitive edge in signing free agents over teams that are either at the cap limit or over. There’s also questions of where an expansion team would be allowed to pick in its first entry draft.
That’s why it’s taking longer than expected. Bettman has said it was never about just writing a check. But Fehr said the game is healthier financially and the timing appears right for expansion.
“Ultimately, it’s up to the NHL whether or not it wants to expand,” Fehr said. “Once that decision is made and if it is decided to proceeedd (with expansion), I’m sure there will be a number of issues that will need to be discussed. But I’m pretty sure that whatever issues that come up I hope can be resolved with little problem.”
Foley is hoping the board of governors will award him a conditional franchise at its Jan. 30 meeting before the NHL All-Star Game in Nashville, Tenn. But with no hard timetable, the NHL may elect to wait until later tis spring or early summer before making a decision.
Much left to do
Expansion would require approval from at least 24 of the 30 teams.
“I hope we’ll hear something in the next 30 to 60 days,” Foley said last month. “There’s so much to do.”
That to-do list includes starting construction on a practice facility, hiring a president and a general manger and adding a sales and marketing staff. He has said the team’s colors will be black, gold and gray, similar to the colors worn at his alma mater, the U.S. Military Academy. There has been buzz that “Black Knights” would be the nickname, though it’s not set in stone. Foley also is waiting to line up sponsorships, broker local television and radio deals and find affiliates in the triple-A American Hockey League and the double-A ECHL.
Bettman said last month a decision can be made in time to let an expansion team start in 2017.
“These are all issues that the board is going to discuss before we can bring it to a vote,” he said in Pebble Beach. “It’s a business decision and it’s being treated in a business-like fashion. Can they make it to 2017-18? Yes. Will they? I don’t know.”
Again, Foley is anxious, but forced to be patient.
“I feel we’re in a very good position at this point,” he said. “We’re respecting the process and hoping for a positive outcome.”
Sept. 28, 1999 — Las Vegas Mayor Oscar Goodman meets with NHL Commissioner Gary Bettman about possibility of league putting a team in Las Vegas; Bettman says bid would need ownership, arena and proper market size; plans are tabled due to lack of suitable arena
September 2013 — Joe and Gavin Maloof meet with Bettman about trying to bring hockey to Las Vegas. Bettman tells them to look up Bill Foley, a billionaire businessman who has similar vision
November 2013 — Foley and Maloofs meet and agree to work together on bringing NHL to Las Vegas
May 1, 2014 — Ground is broken behind New York-New York and Monte Carlo hotels on privately financed $375 million arena by MGM and Anschutz Entertainment Group that would seat 17,500 for hockey
Dec. 8, 2014 — NHL gives Foley approval to launch season ticket drive in Las Vegas to gauge interest in hockey
Feb. 10, 2015 — With Bettman in attendance, Foley officially launches season ticket drive at MGM with goal of 10,000 deposits; more than 5,000 deposits sold in first 24 hours
March, 31, 2015 — Las Vegas season ticket drive surpasses 10,000 deposits
May 1, 2015 — Foley confirms he has a lease agreement with MGM-AEG to play in new arena beginning in 2017
June 24, 2015 — NHL announces it will open formal expansion process
July 6, 2015 — Las Vegas season ticket drive surpasses 13,000 deposits
July 20, 2015 — Foley confirms he has submitted his expansion application to the NHL. Quebec City also applies. Expansion fee to be a record $500 million per city
Sept. 29, 2015 — Foley makes his formal presentation to NHL Board of Governors executive committee in New York
Sept. 30, 2015 — Boston Bruins owner Jeremy Jacobs, chairman of executive committee, says not sure if NHL should expand
Dec. 7, 2015 — Owners meet in Pebble Beach, Calif., with no decision on expansion; study on issue ongoing
Jan. 30, 2016 — Owners are scheduled to meet at NHL All-Star Game in Nashville, Tenn., for update on expansion