Second NHL Team in Southern Ontario

Well the NHL is finally talking about putting a second team in Southern Ontario. Daly made the point that an objection from the Leafs would not stand in the way of such a move and MLSE responded by saying they would not stand in the way of such a move if it was shown to be good for the NHL and MLSE.

Daly also went out of his way to throw cold water on the idea of that team being located in Hamilton. His argument against Hamilton was that Copps Coliseum is not ready NHL ready. That argument is weak since it is the most NHL ready of any arena in the area and the cost to upgrade it to NHL standards is less then the cost to build a new arena.

The real anti-Hamilton stance is based on four points. First, Hamilton is the location that would most interfere with Buffalo’s fan base by drawing fans from the Golden Horseshoe. The second point is that Hamilton is not a known city south of the border and it would be another tough sell in the US. A minor third point is Hamilton’s friendliness with Balsillie and that a move into Copps may well require Balsillie as the owner. The fourth and major point is that Hamilton does nothing to increase revenues for MLSE.

Hamilton is a natural rival to Toronto so an NHL team there will not harm MLSE revenue. That however is not the point. The point is that a Hamilton franchise will do nothing to increase MLSE revenue. A one time territorial payment regardless of size is small potatoes.

What MLSE wants and will work out with the NHL is a strong new revenue stream in return for its support of the second franchise. Some mention a second NHL team playing out of the ACC. The problem with that is that the Leafs, Raptors, and a new NHL team all have overlapping seasons and that would not leave enough dates for other events.

MLSE thinks big and what would make more sense to them is a new development of condos, retail, restaurants, etc. surrounding a second GTA arena where the second NHL team would be the main tenant. That type of development would provide the immediate and long term revenue that MLSE expects and would increase MLSE and freeze out potential competition from another arena in the area.

Leading potential locations for this type of development are Downsview and Vaughan. Neither would be a threat to the Buffalo market and both would accessible to the GTA market. The NHL’s goal will be to maximize the payment for this franchise and the largest bids will come for a second team in the GTA. The second team will also likely be called Toronto since that has some name recognition in the U.S.

None of this is to say that a team in Hamilton or Kitchener/Waterloo could not succeed. The problem with those locations is that they will not maximize the revenue for the NHL, they will not add revenue for MLSE, and they would likely involve Jim Balsillie. Balsillie has burned many bridges with the NHL and it is difficult to imagine that he will be willing to work with MLSE and the governors to find a way into the NHL.

Another advantage to this type of deal is that it would work for a relocation of one of the southern U.S. teams that are currently in trouble. A troubled franchise has to be moved quickly so that local support is not further eroded. In this scenario the ACC could be used as a temporary home for a team while the new arena is being built.