Tuesday, September 16, 2008

NHL inches closer to Vegas

A report in today's Sports Business Journal, citing inside sources, said Harrah's will no longer partner arena developer AEG on a proposed 20,000-seat arena behind the Las Vegas strip.

The Journal said a group of investors including Hollywood producer Jerry Bruckheimer, MGM Studios CEO Harry Sloan and Wall Street financier David Bonderman would instead partner AEG on the project that was announced in August, 2007.

The group's goal is to bring in an NHL expansion franchise to Las Vegas by October 2010.
The difference there is that with a Harrah's partnership, the arena could have been targeted by either an NBA or NHL franchise. This super group of well-heeled owners, however, is only interested in hockey, and once construction is underway, expect all stops to be pulled out to woo the league there.

This news comes the day before the NHL's board of governors convenes here in Toronto, and ESPN's Pierre LeBrun says expansion will be one of the main topics discussed.

I may have said this before, but I honestly believe the NHL in Las Vegas is all but inevitable at this point. There are too many parties interested in building an arena there for it not to get built, and no other major league sports tenants anxious to take the easy money. (The NBA appears leery of a move to Nevada given what happened at the all-star game there last year and the betting scandal involving referee Tim Donaghy.)

The location of the proposed rink is in a spot only a block or two from the Strip and Caesar's Palace, on Harrah's land where there's now only parking lots. The project has been estimated to cost up to $500-million and has already sparked something of a land grab in the area.

The original plan had been for Harrah's to lease the land and share in construction costs equally with AEG. Details of what the arrangement would be for the Bruckheimer group are not yet available, but you imagine it'd be similar.

We're going to see some movement on this soon. The fall of 2010 is not very far away, and the last thing AEG wants is another empty building to go with the one in Kansas City.

AEG has become one of the real power brokers in the NHL these days, and it's no secret how tight they are with Bruckheimer and friends. Just last year, AEG president and CEO Tim Leiweke said of the Vegas talk: "Jerry is like a brother. I will be there to support him anywhere he wants to go."

The only way I can see this all falling apart now is if the board of governors somehow votes against expansion into Vegas — and that's going to be a tough call to make given there'll likely be an absurd amount of cash, perhaps up to $300-million, on the table.

Step 1 will be word of a ground-breaking, which should come anytime now. Hold onto your hats.

UPDATE Here's more from the Las Vegas Review-Journal. It now appears the rink will be ready for 2011.
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29 Comments:

At 3:27 AM, September 16, 2008, Blogger Bohologo said...

The question for me is: just one expansion franchise? Or is there another shoe to drop, given the difficulties associated with an odd number of teams. Southern Ontario anyone?

 
At 3:33 AM, September 16, 2008, Blogger wrap around curl said...

Hockey in Vegas...why deity?! why?!

 
At 4:24 AM, September 16, 2008, Blogger William (Bill) said...

Hockey in Vegas. A terrific move for the NHL. The sports gambling public sure has helped the increase of interest in the NFL over the past few decades. And Vegas is the centre of that.

Can't wait to take a trip and catch the Oil there!

 
At 4:41 AM, September 16, 2008, Anonymous Anonymous said...

How well will they be able to support a fan-base though? The city has 550K people in it, with 1.77Mil in the greater metro area. I'd say that population (along with the millions of tourists) would sell out the 20,000 seat arena. But how loyal would the fans be in a desert? Would this be a novelty team for the area? Would a couple year slump cripple the team?

 
At 7:28 AM, September 16, 2008, Anonymous Anonymous said...

I could see southern Ontario as a bribe to the league for putting a team in Vegas.

As for fan base ... talent-poor, losing expansion teams don't draw very well anywhere if they don't improve, and improve quickly - the novelty wears off. If the team doesn't take off like a rocket, no matter how many tickets are sold, the arena is likely to be pretty empty.

And maybe AEG should have filled one arena first before trying to build another. Biting off more than they can chew, perhaps?

 
At 9:02 AM, September 16, 2008, Blogger FAUX RUMORS said...

This comment has been removed by the author.

 
At 9:03 AM, September 16, 2008, Blogger FAUX RUMORS said...

1) No way do the owners turn down easy money like that. The bigger/more inportant question is how the NHLPA reacts to expansion? Afterall they are now 'partners', right?
2) This might test whether this is actually true, and also how far Mr. Kelly intends to push to get his employers their share of the expansion fee pie.

 
At 10:09 AM, September 16, 2008, Blogger Brooklyn Hockey Boy said...

Wow....anyone wonder if the Las Vegas Wranglers (wouldn't actually be too bad of a name, but I wouldn't be against anything else) would hire Rick Tocchet as head coach? Just kidding...

 
At 10:20 AM, September 16, 2008, Blogger XsavagistX said...

someone kick Bettman in the junk already. he just lets corporate interest and buddies control where hockey goes until they end up in the papers looking like clowns. this is a league of favors for friends, not favors for the fans. great, so hockey expands to an area that doesnt care about hockey in the least and gets their hype crowd for a few seasons - once the NBA (oh, they will move in) or NFL expands there, bye bye ANY hockey fan (dollar) base. people stick with cultural bias. and sport betting on hockey is not going to do anything. football owns that demographic of gambling addicts. i might become extremely disinterested in hockey if they expand two teams to the south just for a cash grab. it just reeks of an NBA type marketing ploy. if they go through with this, any economic disaster that happens is justly deserved. they cant even run LA or that piece of crap town without importing huge amounts of water for morons to water their lawn and to keep golf courses going and they cant put hockey teams in Canada where their biggest demographic is (im not even from canada, its just the smartest place to be long-term)? thats just pathetic.

 
At 10:28 AM, September 16, 2008, Blogger J. Michael Neal said...

What a horrible idea. Have these guys seen what has happened to the Las Vegas economy lately? Not only is the tourism industry slumping, but vegas is one of the five worst hit cities by the housing crisis.

If a team gets put there, I hope that the franchise agreement comes with a clause stating that the owners aren't allowed to plead that they are losing money. A Vegas team not doing well? Hoocoodanode?

 
At 11:12 AM, September 16, 2008, Anonymous Keith said...

Given that Daly and Bettman have been floating expansion trial balloons for well over a year now, it seemed obvious that expansion to 32 teams was a foregone conclusion. a 4x8 or 8x4 division alignment is ideal.

The big question is who gets that 32nd franchise after Vegas. It'll either be Kansas City or Southern Ontario, imo. I would have leaned towards KC before the Del Baggio nonsense, but all of that might have finally opened the door for Balsilie in Hamilton.

 
At 11:14 AM, September 16, 2008, Anonymous Keith said...

Oh, and as a non-gambler, I never had any great interest in visiting Vegas. However, if they put a team there, I am on a plane for the first game the Flames play in Vegas. I'll then walk into Caesars Palace, put $10 on Black on the roulette wheel, then walk out, just to say I did it.

Prolly not even stay the night. Fly in in the morning, catch the game, fly out after.

 
At 11:51 AM, September 16, 2008, Anonymous Anonymous said...

Las Vegas team would be bad news for Chez Paree in Montreal as NHL players favorite place to visit.

Joking aside I can't understand people dissing LV but the promoting expansion in Europe?

 
At 12:42 PM, September 16, 2008, Blogger mike w said...

Ladies and Gentlemen, your Las Vegas Predators!

Sheesh. What a terrible idea.

 
At 2:12 PM, September 16, 2008, Anonymous ALeX said...

As a Canadian living in Vegas, I pray every night this will happen and I think the team would be successful here. The location proposed is great and the sports world here is starved for a professional team (anything to stop the freakin college sports talk on sports talk radio). With aggressive marketing & the strong corporate brands in town, this would be a great success.

The city is growing and still growing even with the economy. Even though the foreclosure rate is the highest in the country, who is really losing those houses? it's those house flippers from Cali & New York who thought they could make a living buying & selling houses in Vegas & Phoenix. Actual local residents with one primary residence are not getting foreclosed.

The expansion should be 2 teams to bring it to a nice 32 with two conferences of 16 (4 divisions of 4 or 2 of 8 teams?? that will be a tough unpopular choice whichever is chosen) with another team in Southern Ontario. Forget Winnipeg or Quebec City.

 
At 2:20 PM, September 16, 2008, Anonymous Gerald said...

Don't hold your breath, james. In this current credit crunch, I would suspect that project financing would not be available.

And before you suggest that project financing would not be needed, let me cut you (and others)off. Without project financing, no deal of this nature is done. The returns are severely impacted by putting all equity into any transaction, much less this one. One only gets a decent return by using the leverage of financing.

Not going to happen for a good long while. IMO.

 
At 2:41 PM, September 16, 2008, Blogger itchit said...

Let Bettman deliver one franchise to his chums at AEG in Vegas or KC. Then I hope Kelly and the NHLPA will follow through on demanding a profitable S Ontario team.
I pray Kelly has sharper teeth and a stronger will than Saskin et al.

-C'mon Hamilton.

 
At 4:14 PM, September 16, 2008, Blogger J. Michael Neal said...

Uh, oh. I agree with Gerald. Time to re-evaluate my position. . .

 
At 4:44 PM, September 16, 2008, Blogger James Mirtle said...

I think they'll get the rink built. It's been in the planning stages forever and the project's got backing from the city higher ups.

Will development be slowed in general due to the economy? Undoubtedly. But if guys like this need financing, they'll find it.

 
At 5:18 PM, September 16, 2008, Blogger knighttown said...

Tracking you down James for a quick note of apology. I used your info over on HF boards without a proper link. I saw Dashing Silver Fox had linked you already and thought the topic deserved its own thread. By the look of the responses, I was right! I fixed it now.

 
At 6:43 PM, September 16, 2008, Blogger MotherPucker.ca said...

Do they realize the division that they will likely be put into, and how many losses they are going to pile up? Or maybe its not about winning... its simply another attraction along the strip.

 
At 9:13 PM, September 16, 2008, Blogger Stevens8204 said...

Hockey will come to Vegas....and then maybe Hamilton.

There is just too much cash being floated around for the board and Gary to say no.

 
At 9:44 PM, September 16, 2008, Anonymous Scott said...

I can understand the fear and anger towards putting a city in Vegas, but as a huge hockey fan living here I'm incredibly excited by the possibility. I lived in NC when they moved hartford there and i thought it was a horrible idea (that didn't turn out too bad).

Vegas is a sports mad city that is clamoring for a professional team. Despite whatever is bad for the league, I'm selfishly praying every night for vegas to be named an expansion city. my name will be first on season ticket sign ups

 
At 2:10 PM, September 17, 2008, Anonymous ALeX said...

Today's paper had a follow-up article which said that Harrah's is not completely out but they would set up the company in a way that would not make the other gaming outfits uncomfortable.

They also said nothing has been filled with the city so it seems doubtful they could have it ready for 2010, 2011 is more realistic

 
At 8:00 AM, September 18, 2008, Blogger 7th Woman said...

If they build a new arena in Las Vegas, and we can't even break ground in Uniondale I will puke. Come on Nassau County! DO SOMETHING!

 
At 10:45 AM, September 18, 2008, Anonymous archleester said...

The ISLANDERS. Relocation bait if there ever was. No arena. No players, other than untested youngsters and an overrated, overpaid goalie. No future. Just a past. A very distant one at that.At least Phx , Atl, and Fla have some fans and a decent joint to play in. Atleast they have legitimate coaches and GM's and don't fire them after 40 days. Replace the "L.A." with "L.I." in the song "To live and die in L.A." and you'll have the Isles.

 
At 12:14 PM, September 19, 2008, Anonymous Anonymous said...

Vegas just doesn't seem like a viable place long-term:

1) The residents all work in a "3-shift" cycle, since most work for the hotels (or at least support the hotels in some way). How many people out of thier population are going to be either asleep or at work during gametime?? How many does that leave to watch the game? How many does that then leave that'll actually GO to the game?

2) Vegas is too tourism dependent. If people don't travel, will the seats become empty...moreso than at other current NHL venues?

3) Assuming they make the playoffs, how bad will the ice be in April? I can only assume that it'll be like skating in mud.

No, the real solution is to go to Seattle and Winnepeg. Miami had thier chance...and Seattle is a just a better place for the Panthers. Seattle has big corporate money (Microsoft, Costco, Starbucks) and no NBA team to compete with. Plus, they have a history with hockey AND a natural rivaly with Vancouver. It just makes more sense.

And the Phoenix experiment has failed. It's time to admit that it was a project gone bad, and bring them back to Winnepeg. They'll have a HUGE following and players love playing there. The economic system now allows them to be viable there.

Summary: No to Vegas; no to expansion. YES to Seattle and Winnepeg via relocation!!

 
At 7:29 AM, September 22, 2008, Blogger Peter said...

Interesting note: The arena is at the intersection of Flamingo and Koval, east of the Strip, which is the same intersection where Tupac got shot and killed.

 
At 9:01 PM, October 12, 2008, Blogger AccessVegas.com said...

With so many east coast transplants, an NHL team would probably do pretty well.

However, that location blows. It looks to have no parking which means no way for local's to get to (and enjoy) the game.

MGM Grand and Mandalay Bay both have plenty of parking, but Harrah's master plan for all of the land they own really doesn't leave a big area to build parking (especially with that they paid for all the land during the boom of the past few years).

Ted Newkirk
Managing Editor
Access Vegas

 

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