Bill Foley made some smart decisions amassing his billion-dollar fortune in the mortgage industry, so what the puck is he thinking to lay out $500 million for an NHL expansion franchise in Las Vegas? Maybe he sees it as a long-shot bet on a city that’s ready to support a major league sports team.
But history isn’t on our side. Minor league teams have come and gone like hard-luck gamblers, including the Thunder and Wranglers in hockey, the Silver Bandits in basketball, the Outlaws in arena football and the Legends in indoor soccer. The Triple-A Las Vegas 51s (formerly the Stars) have been around since 1983, but average game attendance from 2010-14 was 4,569, lowest in the Pacific Coast League and far below the league average of 6,154, according to the PCL.
Blame it on the heat. Blame it on the plethora of entertainment. Blame it on a majority of the population whose sports allegiance lies in other cities. Only the Runnin’ Rebels have drawn consistently.
So why is Foley confident about the NHL succeeding in Las Vegas? For one, he took more than 14,000 deposits on season tickets, though he concedes not all of those will be converted to actual sales. Season ticket-holders put down 10 percent, and Foley says he has $8-$ 9 million in escrow. About 400 deposits came in the days just before the NHL Board of Governors unanimously voted to approve the expansion franchise June 22 at Encore. Las Vegas will become the NHL’s 31st team, joining the Pacific Division in 2017-2018.
“It was a fairly intense and complicated process. We think this is a tremendously exciting opportunity, not just for Las Vegas, but for the league as well.” – Commissioner Gary Bettman
“We did it,” Foley said during a news conference. “It wasn’t easy. Our great sports town now has a major league franchise. We’ll leave no stone unturned in our dedication and pursuit of hockey in Las Vegas, not just for our team, but for the community.”
Second, he’s got T-Mobile Arena, a $375 million joint venture between MGM Resorts International and Anschutz Entertainment Group. Designed with hockey in mind, it’s steeply banked so every seat has a great sightline, and the luxury suites are “unbelievable,” he says.
“Plus we have nightclubs and all kinds of food service. It’s going to be great for hockey, and every day is going to be a party.”
And third, in addition to more than 2 million residents, Las Vegas welcomes 42 million visitors a year, including “snowbirds” from hockey territory in Canada and the United States. Foley is convinced T-Mobile Arena will be packed for just about every game, with season ticket-holders comprising 85 percent to 90 percent of attendance.
“I don’t think he can depend on visitors coming here primarily,” says John Restrepo, principal of RGC Economics in Las Vegas. “That’s part of it, but the primary (fan) base is local and I don’t know the size of that. It’ll be interesting to see how it unfolds.”
The decision to expand in Las Vegas followed months of extensive study, negotiations and deliberations, NHL Commissioner Gary
Bettman said at the news conference.
“It was a fairly intense and complicated process,” he said. “We think this is a tremendously exciting opportunity, not just for Las Vegas, but for the league as well.”
Vegas has long been a mecca for championship boxing, the UFC and major NASCAR races. The NFL may be pie in the sky, but the NHL is here and now. So while we wait to hear Céline Dion sing the Canadian national anthem when one of her country’s NHL teams visit and look forward to scoring our first goal, Foley will set about creating a winning culture and an internationally recognized brand with the Las Vegas team.
A graduate of the U.S. Military Academy at West Point, Foley wants to name the team the Black Knights, which is the “good knight,” the one that protects the unprotected, he said. His Jacksonville, Florida-based company is called Black Knight Financial Services, and the company behind the NHL franchise is Black Knight Sports and Entertainment.
“I’m open-minded about the team name and colors, but I am the majority owner,” he points out. Any team name and logo would have to be approved by the league. Foley anticipates $4 million in revenue from sales of team jerseys, hats and other products in the first year.
Brian Gordon of Applied Analysis business advisory firm says Las Vegas is on the radar for all types of business and industry, and having an NHL team gives people one more reason to hop on a plane and come here.
“The biggest economic boost is likely sourced to incremental visitation, having people that may not have come to Las Vegas otherwise,” Gordon says. “These types of investments are what make Las Vegas known throughout the rest of the world.”
The NHL’s arrival marks a new chapter that may entice the NBA and NFL to follow, or it may be a cautionary tale of hubris or another footnote in the city’s history. How it’s written will likely depend not on tourists, but on Foley’s team and a community that has long sought to join the major leagues.