NHL Expansion Fee Soars to $2B As League’s Value Surges

The quiet part is now being said out loud regarding NHL expansion. 

Rumors have circulated for months about the strong likelihood of an NHL expansion team requiring a minimum $2 billion fee. Islanders co-owner Jon Ledecky confirmed that Thursday at the inaugural Front Office Sports Asset Class summit in New York.

“[NHL commissioner] Gary Bettman told our [Board of Governors] meeting that if there’s expansion, the minimum price will be a $2 billion fee, plus a $500 million to $600 million equity commitment for a new arena,” Ledecky said. “Think about that versus 1999, when Ted Leonsis and I bought the Washington Capitals and half of the Wizards for $200 million.” 

Just $85 million in that multifaceted pact 26 years ago was specifically for the Capitals. Ledecky sold his interest in the Washington teams and what is now Capital One Arena back to Leonsis in 2001, and then entered into a separate deal for the Islanders in 2014, gaining majority control along with partner Scott Malkin two years later.

“So in the course of just one generation, sports [franchise] prices have increased because the leagues that get it and understand the need to have this labor situation taken care of can really move forward aggressively together,” Ledecky said. 

The last NHL expansion team, the Kraken, entered the league in 2021 with a $650 million fee, meaning that the cost will more than triple for the next team. 

No Formal Process

Interest in NHL expansion, both among suitor markets and hockey fans, continues to rise sharply, particularly as the league is operating in a period of historic strength. The league is enjoying unprecedented revenues, labor peace with the NHL Players’ Association is assured until at least September 2030, and several major stars, including Connor McDavid and Jack Eichel, have solidified their professional futures in recent days through impactful new contracts. 

Among the candidate cities most frequently mentioned are Atlanta and Houston. 

The league, however, still hasn’t committed to any formal expansion process, and instead will review bids on a case-by-case basis. Speaking Wednesday after an NHL Board of Governors meeting, Bettman said even that type of activity is not imminent.

“If somebody knocks on the door, we’ll peek around to see who’s knocking and then decide what to do with it,” he said.