Mirtle: The NHL's Sun Belt ‘problem' has no easy solution. But does it need one?

New York Times

2 days ago

For years — even decades, you could argue — the NHL's Sun Belt franchises in the United States were mere cannon fodder for the league's established franchises.
It started with expansion into California in the late 1960s, but the Los Angeles Kings and Oakland Seals held winning records in just five of their first 30 seasons combined until Wayne Gretzky's arrival in L.A. in 1988. (The Seals relocated to Cleveland after nine years.)
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The NHL tried again in the '90s, pumping strangely named teams into what felt like weird places at a rapid pace: the Sharks in San Jose, Lightning in Tampa, Panthers in South Florida, Mighty Ducks in Anaheim, Stars in Dallas, Coyotes in Phoenix, Hurricanes in Raleigh, Predators in Nashville and Thrashers in Atlanta.
In what felt like overnight, the league went from having one warm-weather team, in Southern California, to double digits. For the most part, these new clubs lost a ton of games too. Between 1991-92, when the Sharks arrived in the Bay Area, and the 2003-04 season, only the Stars managed to post a top-15 record.
Fittingly, in 1999, Dallas became the first Sun Belt club to win the Stanley Cup. Then, after the Lightning won in 2004 to join the Stars, the league went through a full-season lockout, which led to a hard salary cap and revenue sharing, increasing the chances of success for its fledgling markets. Over time, these markets finally started to win — and win big: heading into next week's Stanley Cup Final, where the Panthers will be looking to repeat, nine of the NHL's last 20 winners (and four of the past five) have hailed from the Sun Belt.
Three of the conference finalists this spring — Carolina, Dallas and Florida — were warm-weather teams, following up on a 2023 playoffs when all four were in that group. In fact, nearly 60 percent of all conference finalists the last decade are Sun Belt teams.
It's all pretty incredible representation for a group of teams that currently makes up only 28 percent of the league.
In many ways, the rise of the NHL Sun Belt has been a good thing. Buildings are largely full in these markets. New fans are being created. And talk of relocating franchises, as happened with Phoenix and Atlanta (twice), has subsided. Some of the Sun Belt franchises — led by the Kings, Vegas Golden Knights and Stars — are now some of the most valuable in the league.
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The downside, however, has been threefold.
1. TV ratings are well down in the U.S., and network partners there are stressed about the matchups they've been given this postseason. With no Boston, Chicago, Philadelphia, Detroit, Pittsburgh or New York teams in the postseason — for the first time in NHL history — there hasn't been an easy, big-hockey-market win for ESPN or TNT all playoffs.
And with all of those franchises in various stages of rebuilding or retooling, Cup contention feels a ways off for most of the top U.S. markets.
2. Playoff revenues are simply higher in the more established markets, which drives more revenue league-wide and boosts the cap, player pay and overall outlook. More small markets playing the biggest games of the season means lower revenue growth.
Revenue in Original Six markets, for example, is roughly 35 percent higher than that of the nine Sun Belt teams.
3. Fans in hockey's more traditional markets are increasingly crying foul when it comes to a perceived advantage some of these teams have due to their more favorable state tax laws.
You hear this complaint a ton, especially in Canada, where there hasn't been a Cup winner for 32 years now. And there's no doubt that for some free agents, the combination of warm weather and a lower tax rate is a draw.
Many player agents will tell you, however, that this conversation is overblown, as players choose where to sign for many reasons beyond salary. This also wasn't an issue that was talked about when the three teams in high-tax California were among the best in the league for a decade and won three of eight Cups between 2007 and 2014.
The reality is that out of the top 10 U.S. teams in the first 10 years under the salary cap, only Nashville was located in a tax-free state. Why would it be an insurmountable advantage today and not then?
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Whether this Sun Belt market dominance poses a real problem for the NHL depends largely on your perspective. Over the longer term, it's likely going to be a positive. More people than ever are playing hockey and attending games in the U.S. as the sport's footprint continues to expand rapidly at the grassroots level, especially in the Sun Belt. And the U.S. national team is more competitive than ever, as evidenced by their roster and play at the 4 Nations Face-Off in February.
It may take a generation or two to pay off in things like national TV ratings, but the reality is the NHL has always been more of a local audience league than one drawing national interest. The fact the league can't compete for eyeballs with the NBA and NFL is not all on the successful Sun Belt teams.
One key factor that will likely affect this trend over the coming years is the rapidly rising salary cap. The pandemic-era NHL has dealt with a nearly flat cap for years, with the entire league bunching together in the same payroll band and Sun Belt teams rewarded to a greater degree.
Teams in more established markets with higher revenues are going to be far more likely to spend to a $113 million cap in 2027-28, however, which should give the New Yorks, Bostons and Chicagos a leg up in roster building over the coming years.
But a thing that I don't think gets talked about enough with this trend is that the Sun Belt teams are winning in part because they've simply innovated more than many of the more traditional markets. Excellent owners in places like Tampa and Vegas have hired differently, encouraging their front offices to think outside the box and be more aggressive than the norm. These management teams, in turn, have drafted better and unearthed more overlooked players, as evidenced by the fact that executives like Florida's Bill Zito and Dallas' Jim Nill are up for the GM of the Year Award basically every year.
I can see a world where this run of success for teams like Dallas, Florida, Tampa and Vegas pushes their competition in more traditional markets to step up their game. The Original Six and other Canadian and northeastern U.S. teams will always have their own advantages and a different type of pull for bringing in top management and players, whether it's coming to play at home close to family or to a place where hockey is ingrained in a more fundamental way.
Some of this, too, will likely be cyclical. For years, the Sun Belt clubs were derided as lesser-than by many fans in northern cities, something that was easy to do when they struggled to draw crowds and often fell on the losing end of games and playoff series.
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Now the tables have turned, and I don't see the league intervening in any artificial way to change that.
It may not be as good for business in the moment, but as the NHL looks to expand into Houston and back into Atlanta and Phoenix in the coming years, it needs a strong Sun Belt to keep those expansion fees up and owners (and their fans) believing they can win, too.