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Las Vegas is NHL's kind of town

After two-plus years of planning and community commitment, 31st team set to join League

by Nicholas J. Cotsonika @cotsonika / Columnist

LAS VEGAS -- The jokes are too easy: The NHL is gambling on Las Vegas. The League is going all-in on expansion. It's doubling down in the desert.

Yes, the NHL is hoping to hit the jackpot. But when the Board of Governors voted Wednesday to award an expansion franchise to Las Vegas for the 2017-18 season, becoming the first major sports league with a team in the market, it was not an impulsive, blindly hopeful pull at the slot machine.

It was a calculated business decision.

It was the culmination of a process that determined the time was right to add a 31st team, and Las Vegas was the right market, with a committed owner, a new arena in a prime location and a demonstrated demand for hockey in a metropolitan area of 2.1 million people and counting.

It was not a slight of Canada. The Board of Governors believes Quebec City represents a prime opportunity for expansion, but the Board deferred Quebec's bid largely because the weakness of the Canadian dollar does not provide a strong foundation. The Canadian dollar was stronger than the American dollar when the Atlanta Thrashers became the Winnipeg Jets five years ago, and that was relocation, not expansion.

The League wants better geographic balance, and this will put 15 teams in the Western Conference with 16 still in the East. And by adding one team instead of two, this will minimize the disruption of the existing 30 teams' rosters and create a more competitive new team via the expansion draft.

Video: NHL announces Las Vegas expansion franchise

Bottom line: It does not make sense to collect a $500 million expansion fee and add a team in the short term unless it will grow the game and the business in the long term, not when that expansion fee will be split 30 ways, the owners' share of future revenue will be split 31 ways instead of 30, and successful teams will have to help support the new team if it struggles.

Nothing is guaranteed, but all jokes aside, the Board of Governors believes Las Vegas currently presents the best odds of long-term success.

The NHL is in a much different place today, in more ways than one.

The League grew from 21 to 30 teams and stretched its geographic footprint southward from 1991 to 2000, adding nine teams and relocating three others. But until now, it had not expanded since then, and Atlanta to Winnipeg has been its only relocation.

The game has grown in places that were considered untraditional, and traditional markets are among those reaping the benefits. The Toronto Maple Leafs, an Original Six team in the so-called "Centre of the Hockey Universe," are expected to select Auston Matthews with the No. 1 pick of the NHL Draft on Friday. Matthews grew up in Scottsdale, Ariz. The son of a college baseball player, he got hooked on hockey because of the Coyotes.

The business has grown from $1.56 billion in hockey-related revenue in 1999-2000 to $4 billion today. The League has a labor agreement with a hard salary cap that splits HRR 50-50 with the players, and the agreement will be in place through at least 2019-20.

Video: Las Vegas owner Bill Foley discusses new franchise

Even so, the NHL moved slowly on expansion.

It was December 2013 when the Las Vegas group met with NHL Commissioner Gary Bettman and other NHL executives at a Board of Governors meeting, laying out firm plans for a new $350 million arena on the Strip.

It wasn't until a year after that when the Board said it would not object to a season-ticket drive to gauge the viability of the market, and Bettman made it clear at the time the League had made no promises and needed answers to lots of questions.

Among them: Would the team be supported by Las Vegas-area residents and companies, not just tourists and casinos? Would it work amid all the other entertainment options, with so many people working night shifts?

Prospective owner Bill Foley and his group paid millions for consultants, market studies and advertising campaigns. Their research showed there were 130,000 potential ticket-buyers in the Las Vegas area: 75,000 avid hockey fans and 55,000 others interested in seeing a game. Their drive landed more than 14,000 season-ticket deposits and sold out the suites.

"I believe it's going to be great for Las Vegas," Foley told me in February 2015. "If we're fortunate enough to get a franchise, it will give Las Vegas an identity other than being a tourist town with great restaurants and gambling and shows and so on. It will give the residents of Las Vegas something to really identify with that's going to be theirs. It would be terrific.

"And the arena's unbelievable. I mean, we're going to be so lucky to play in this arena."

The T-Mobile Arena opened in April on the Strip, where so many amazing, impossible things have risen where once there was nothing. All it needs now is ice and players to put on it.

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