Thursday, April 23, 2009

Vaughn is not getting an NHL team

This story speculating about a National Hockey League team being located in the Toronto suburb of Vaughn (to give the Leafs company on the golf course) has a number of flaws in its theory:

A group of business people wants to bring a second hockey team to the Greater Toronto Area, and the NHL took the group seriously enough to grant it an audience.

The unidentified group met with National Hockey League deputy commissioner Bill Daly in downtown Toronto last week, according to sources. The group proposes to build an arena at the intersection of Highways 427 and 7 in Vaughan, Ont., on land north of Pearson International Airport that's owned by businessman Victor De Zen.
Now don't get me wrong, I think a second NHL team in the Toronto area, or Hamilton or even London or Waterloo, makes very good sense. I have no doubt Southern Ontario could support a second franchise.

But I question how much business sense it makes to build a new NHL sized, 20,000 seat arena in Vaughn. The Air Canada Centre cost $265 million to build. That's a lot of money, and it will have to be privately financed. No way would governments put in any cash, nor should they. Heck, when the Senators built the Paladium/Corel Centre/Scotia Bank Place in Kanata, the Harris government even made them pay for a highway interchange.

But let's say the backers raise the private capital, on top of the cash to buy an existing franchise to move here as well as to buy off the Leafs and Sabres. Is another 20,000 seat arena located in the Greater Toronto area really economically viable? It wouldn't be sustainable just with a hockey team as the anchor tenant. That's only, what, 40ish nights out of 365. The ACC has the Leafs, Raptors, Rock, and a boatload of concerts. The Vaughn arena would need to find an awful lot of concerts and other lucrative dates to turn a profit. Are those events out there?

A more likely solution would seem to be, if the team is going to be resident in the Greater Toronto area, tenancy at the Air Canada Centre. They'd need to get a share of the concessions from Maple Leaf Sports, pay them rent, but this would also go a long ways to over-riding MLS's concerns about another franchise in the area. In Los Angeles, the NBA's Lakers and Clippers both share the Staples Center.

There would be a lot of complications and issues to overcome with an ACC tenancy, to be sure. But they seem more easy to overcome than the economics of a 20,000 seat arena in Vaughn.

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Herbie said...

I'm a resident of Hamilton so I've been hearing a lot of talk about the NHL these days. I agree with your assessment of the economics of an arena in Vaughan. One of the main selling features of the Hamilton deal is Copps Coliseum. It is a ready-use arena that can be easily expanded to 20,000 and luxury boxes.

I was thinking about using the ACC for another set of home games but, I later found out that the ACC is the second busiest venue in North America (Madison Square Garden is the busiest) so, finding 40 extra free nights might not be viable. Hence, the Hamilton option still keeps kicking around.

burlivespipe said...

Yeah, i think the ACC is a nonstarter; like Herbie said, availability is unlikely plus you'd be a second-class tenant, getting all the worst dates. Secondly, do you see how in LA it has affected the Clippers? They will never escape the Lakers shadow -- if they were playing out of Anaheim or another suburb, at least they'd have their own local identity.
I'm not against the Vaughn idea, but found Ballsalie's Waterloo-Kitchener pitch much more do-able. Hamilton is perfect but a new owner may never get the approval of two NHL kingpins. Of course its all outlandish thinking as long as weasel bettman is involved. Gotta protect those nashvilles, phoenixes and floridas...