One missing on that list is the Seattle Seahawks → Oklahoma City Thunder. $30M relocation fee to the league & $45M payment to Seattle as a settlement.

“The owner said the $212.5-million offered by Balsillie would go to the team’s creditors. Then he should pay $250-million to $300-million on top of that as a relocation fee and to reflect the value of a franchise in Hamilton.”

That’s not how bankruptcy works and that’s not how relocation works, and this judge will destroy that argument., especially given his apparent knowledge of prior moves.

The going rate for a relo is $45 million – hsughrofl is correct on the SuperSonics relo fee. I’d expect indemnity to run about $50 million total, based on some back-of-the-envelope calcs on attendance for Buffalo and Toronto.

1) Loving how this guy is cutting through all the Bull spit the various folks are throwing out there. Get right to the point and don’t spin the facts. That can’t bode well for Mr. Bettman who thrives on double speak.
2) We wonder if the judge can set for the NHL what an appropriate relocation fee can be? Would appear to a non lawyer to be beyond what a bankruptcy judge proceedings can determine?

Correct me if I’m wrong, but hasn’t there been a “territorial rights” stipulation involving any team that would land in the GTA and that they’d have to pay the Leafs and Sabres some hush money to be able to play in their neighborhood? Is that in addition to the relocation fee?

One thing being overlooked in that list above is that none of the relocations were into a market already being served by the sport (which would be the case with a Hamilton relocation). I take that back, the Montreal to DC was exactly this scenario and there was a hefty fee attached because of Baltimore’s toes being stepped on. Even the most recent case (Seattle to OKC) involved a ‘new market’ from the NBA’s standpoint, not an existing market that may or may not be able to support a second franchise.

I don’t see how an argument can exist that the going rate is $30-45 million when you take that into account.

It is believed Balsillie would have to pay a $50M relocation fee, a $50M compensation fee to the Leafs and a $30M compensation fee to the Sabres in addition to his $212.5M bid.

He will likely win this case, but at a hefty price!! $342.5M!

The 1982 relocation of the Colorado Rockies to New Jersey required a territorial indemnification payable to the Rangers and television territory indemnification to the Islanders and Flyers, totaling $35m. While not technically labeled a relocation fee, it certainly was a cost associated with the move to that particular market.
http://msn.foxsports.com/nhl/story/9665158/Judge-wants-relocation-fee-out-in-open-
http://mirtle.blogspot.com/2007/05/look-at-nhl-territory-rights.html
http://puckreport.blogspot.com/2009/05/nhl-relocation.html

Interestingly, fees associated with expansion have never exceeded $80m (including territorial indemnities) though none have infringed upon hockey’s most valuable franchise, the $448m Toronto Maple Leafs.
http://www.forbes.com/lists/2008/31/nhl08_Toronto-Maple-Leafs_312012.html
http://puckreport.blogspot.com/2009/05/nhl-expansion.html

How long would it take to work that off, from a revenues perspective? I mean, it’s obviously not going to be clear-cut, but how many hundreds of millions of dollars do the Maple Leafs bring in in profits? Would that $500 million be forgotten in a matter of 3 years, or would Balsillie be in the hole for decades? (I’m guessing the former.)

http://www.buffalonews.com/258/story/699967.html

Now there’s some Hamilton political crackpot calling for a Southern Ontario boycott of the Sabres, just because they have remained silent during this whole ordeal so far.

Does he honestly think he’s going to accomplish this?

Lost in this whole mess are the AHL’s Hamilton Bulldogs. Apparently if a NHL team were to move into Copps, their lease expires immediately. I don’t know if they could find a new building to play in next year at this point.

There are 2 reasons you can’t account for the Washington Senators (and I can say this as someone living in northern Virginia) anomaly:

1.) As James already pointed out, that number includes MLB’s later selling of the team.

2.) Any money that may have been given to Baltimore is NOT a fair comparison to the Hamilton-Toronto situation. Baltimore is a very small market, and a large portion of its fan base was in the Washington suburbs (and arguably still is).

Toronto, by comparison, is the larger market (like DC), and Hamilton the smaller (like Baltimore).

The NFL’s Baltimore Ravens didn’t have to pay (to my knowledge) a territorial fee to the Washington Redskins when they moved into town, so why should Hamilton have to pay an exorbitant number?

Buffalo may have a small argument to be made, but the Maple Leafs are just grandstanding. Have we all forgotten that Toronto is the top revenue club in the league despite their horrible on-ice performance? Imagine the profits they’re capable of when they put a good team on the ice! Toronto’s a household name in hockey, and they have fans everywhere, much like the NFL’s Cowboys or Steelers. If they’d just put a good team together they’re revenues would be ridiculous.

*their revenues

an old article of James’ worth reading on the small/big market question, btw:

http://mirtle.blogspot.com/2007/11/big-small-markets.html

I love the Ian Pulver quote, btw:

“The fact that the Edmonton Oilers are a revenue-share provider, and considered a big market in the National Hockey League … that doesn’t make sense to me,” Pulver said. “The Edmonton Oilers are a small market who should forever receive money in any professional sports league. When the Edmonton Oilers become a revenue-share recipient for the right reasons, that will be a signal that the league is headed in the right direction.”

Teams that have moved into/expanded into another team’s ‘market’ and the original team has been just fine.

NFL:
-The Raiders moved into the 49ers market twice. San Francisco could have thrown a fit during the NFL-AFL merger and prevented Oakland from entering, but wound up being ok. The 49ers have won 5 Super Bowls.
-The Ravens moved into the Redskins market, years after the Colts had bolted for Indianapolis and Washington is the 1st-2nd most valuable football franchise. (will be 2nd this year thanks to the Cowboys new stadium)

NBA:
-The Clippers moved into the Lakers’ ‘market’ and the Lakers are arguably the most consistently successful franchise in sports.
-You could argue the Nets moved in to the Knicks’ ‘market,’ yet the Knicks are incredibly successful financially (despite sucking on the court), and may soon move closer again (Brooklyn, anyone?).

MLB:
-The Angels started in the Dodgers’ ‘market’, and yet both clubs have won the World Series since and both are financially stable.
-The Athletics moved into the Giants’ ‘market,’ and yet both clubs are successful and stable.

NHL:
-The aforementioned Devils move into the NY/NJ region.

Have we not all already established that Hamilton would draw fans from the Toronto metro area though? And that Toronto is not only a huge market when it comes to hockey, but that the Leafs have had the highest revenue for pretty much ever?

Sports clubs work in any sport in mega markets because when a market is gigantic it pretty much assures that at least a share of said market the size of a smaller market cares about one given sport.

A smaller ‘market’ that is hockey crazy and would only have to support 1 ‘Big Four’ sport (I do not count the CFL) and is next to the largest hockey-crazed market in North America should do just fine.

I’ve been making the argument for years that a smaller market in the U.S. around the same size as Hamilton could support one team in one ‘Big Four’ sport, and probably do so more successfully than a medium-sized market like Minneapolis that tries to have four ‘Big Four’ teams.

Salt Lake City has been proving this for decades in basketball (the SLC area has only recently begun to grow rapidly in the last decade, much like Hamilton and southern Ontario may continue to do soon), and Oklahoma City has a chance to prove it too. If Memphis didn’t suck so much, they could probably prove it as well.

Baseball and football can be tricky analogies since they’re the two most popular sports to watch, but baseball could someday be on par with basketball and hockey and thus more open to smaller-market clubs.

I guarantee there are more hockey fans in a metro area the size of Hamilton than there are in many U.S. markets, and even with the ‘capture-value’ Bettman and others see in larger markets, those clubs are still generally competing with 2-3 other ‘Big Four’ teams in their area.

It doesn’t matter if an area is twice the size of Hamilton if their hockey team is fighting with 3 other pro sports team for fan interest. True, if the club is successful, they may temporarily have more revenue-producing opportunities than a small-market team like Hamilton, but in their bad years we’ll continue to see revenue declines. An area like Hamilton, which is hockey-crazed and would only have to support one ‘Big Four’ team would be a more consistent contributor to revenue than a swath of Sun Belt teams whose ‘potential’ is counter-balanced out when their peers under-perform and don’t sell tickets.

I came to some interesting conclusions once I crunched some numbers for fun.

The way I reached these conclusions is as follows:
1.) I plugged the metropolitan area data for U.S. MSAs and Canadian CSAs from 2008 population estimates into an Excel spreadsheet.
2.) I tallied all the NFL, MLB, NBA, and NHL teams in a given market.
3.) I divided the population by the total number of teams in the market to test strength.
4.) I ran separate test for inclusion of MLS, and an additional test for the inclusion of both MLS and the CFL.

There are 27 markets since NYR/NYI/NJ share a market, as does LA/ANA. Both of those markets stay far ahead of most others though in population per team, so that’s more than fine.

Not including the CFL or MLS, Hamilton would rank 25th out of 27 NHL markets in Population per Team at 629,911.But that’s just the Hamilton CSA.

Now, if you included Kitchener, Guelph, and London, Hamilton ranks 8th out of NHL markets for Population per Team (when only including ‘Big 4’ sports) and is basically on par with Toronto. Under that scenario, the Hamilton/Kitchener/Guelph/London market has 1,728,875 people per team, just a nudge above Toronto at 1,704,383 people per team. When/if you include the CFL and MLS, Hamilton still ranks 19th out of 27 NHL markets (including Kitchener/Guelph/London) at 864,4375 people per team.

The inclusion of Kitchener, Guelph, and London is interesting, because though it boasts Hamilton’s market up to 1,728,875, it does so by only including CSAs that are not a part of the Toronto CSA and it does so by only including areas west of Hamilton (and therefore not interfering with Buffalo).

For those of you interested, the Toronto CSA is 5,113,149 and does include Mississauga.

Buffalo has problems because (no offense to Sabres fans) it’s Buffalo. Even without a team in Hamilton, Buffalo is 24th of 27 NHL markets in population per team, ahead of only Calgary, Edmonton, and Denver. And that’s including the CFL and MLS. Subtract those two, and Buffalo is 26th of 27.

Buffalo should probably be compensated, but the Sabres themselves have admitted as much in the past that Hamilton is not really their market. Yes, they have a small percentage of Canadian fans, but those mostly come from east of Hamilton, and Buffalo’s problems have more to do with the size of Buffalo than any team moving to Southern Ontario.

The Southern Ontario question seems inevitable to me, but if Balsillie must pay Buffalo something to soothe its pain as a shrinking market (which is occurring regardless of what happens with Hamilton), so be it. Toronto is just a crying schemer desperate to hold on to its outrageous market advantage. Even with a team in Southern Ontario, Toronto will likely lead the league in revenue, as there are more hockey fans in Toronto than anywhere else in North America. Should the Leafs put a good team on the ice, there’s almost no limit to what they could accomplish.

Anyone interested in seeing the numbers I crunched can e-mail me at erikgeib (at) yahoo (dot) com. I have 3 separate Excel sheets: the pro sports markets without a team in Hamilton, the markets with Hamilton as just Hamilton (and not London, Kitchener, and Guelph), and the expanded Southern Ontario market.

Full analysis is now online:

http://bettersportsleagues.blogspot.com/2009/06/long-term-viability-of-professional.html

Anyone who wants the full data sets (50 U.S. metro areas plus 10 Canadian CSAs) is more than welcome to e-mail me. erikgeib (at) yahoo (dot) com.

Those who read too much into what I’ve been arguing are either A.) dismissing parts of my arguments in favor of their viewpoints or B.) playing devil’s advocate [a popular online past-time]. Take it for what it is – fun. Relax, people.

Im pretty sure the readers of this blog are doing better research on this topic than the NHL.