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NHL In Seattle: Pricey Prospect For Billionaire Investors And Fans Alike

NHLVegasArena.jpg
John Locher
/
AP Photo
Construction works eat lunch by an MGM arena being built behind the New York-New York casino-hotel in Las Vegas. The NHL is one step closer to establishing expansion teams in Las Vegas and Quebec City. No local groups applied.

Investment groups in Seattle, Bellevue and Tukwila did not apply for National Hockey League expansion before the deadline recently expired.

But KPLU sports commentator Art Thiel says the prospect of professional hockey in our region is still alive.

Seattle Different From Vegas And Quebec City

Only two cities forked over the millions of dollars required to apply for an expansion team: Las Vegas and Quebec.

"Both of them have arenas under construction," Thiel said. "They built on spec – on the hope that they would get a team. So they were almost forced into this position. That’s their own doing.

"But it’s also important to understand the differences between those two cities and Seattle.

"In Las Vegas, that building is privately funded 100% by a partnership between the MGM Grand Casino and AEG (Anshutz Entertainment Group), which is one of the biggest arena builders in the world. So there are no public funds involved in that.

"In Quebec City, it’s exactly the opposite. It’s completely publicly funded because the people there are desperate to get the NHL back since they haven’t had a team there since 1995. And it would be the only pro sports team in town.

"The upshot is Seattle is being asked to build the arena from scratch AND pay the $500 million expansion fee. So, really, what’s happened is that even guys with great wealth who are interested in sports are looking at that and saying ‘A billion dollars to get this franchise going? I’m a little skeptical.’

Money Up Front

Thiel pointed out that the fee to apply for expansion was $10 million, $2 million of which was non-refundable.

"The NHL really overreached on that," he said. "But they got the two cities they were going to get. They were hoping to get more cities to keep the pressure on and keep the prices up. They didn’t get it."

No History Of Success

Thiel said the big question that rich folks are asking is: would the NHL be a viable business enterprise in the Seattle area?

"There’s no proven history of major league hockey success in the modern history of Seattle," he said. "So, they have to say ‘Can this $500 million project and a $500 million fee pay off?’

Thiel pointed out that it would have to be the fifth ticket in town.

"This is an anomalous market. Major League Soccer is financially successful here like nowhere else in North America.

"That’s the other pro sports team in town besides the Seahawks, the Mariners, I call the University of Washington a professional football team and then you’ve got the Sounders.

"So, the NHL, by definition, would be the fifth ticket in town. And they certainly didn’t want to be the sixth ticket in town if the NBA came first. That’s not happening, so they’re trying to seize the day," Thiel continued.

"I think any wise investor would say ‘Without a proven history here, how do we know this is going to work?’"

Pricey For Fans Too

Hockey is not only costly for investors, but fans as well.

"(Ticket prices are) just through the roof," Thiel said. "It’s the most expensive sport among all the major sports. I think an average seat in most NHL arenas would run about $175-$200.

"The reason the prices are so high is because the NHL gets far less television revenue so they have to make up for it at the gate. It’s a very expensive endeavor."

What’s Next?

"I think this is the end of a chapter but certainly not the end of the book," Thiel said.

"Lots of things change. There are people who are still interested in hockey. The NHL is certainly interested in coming to Seattle – a very robust economic market.

"These ownership (groups) come and go and different ideas come out. So I think there’s still hope. But this chapter is closed and there’s going to be another one probably starting as soon as tomorrow."

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You can find Art Thiel's work at Sportspress Northwest and Crosscut.com.

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