Business of Hockey

Just for fun: a promotion/ relegation model for the NHL

Happy Friday, BSB faithful!  The Rangers will take on the Blues on Saturday, but that’s not what I am here for today.  We all know the Rangers suck and are rebuilding/re-tooling/limping toward the finish line, etc.  Tomorrow night won’t change anything there.  So, to keep some levity in an otherwise morose time in Rangerland, I want to engage in a hypothetical exercise.  Yesterday on Twitter, Tyler Dellow posited a notion of the NHL moving to a 40 team, dual-league relegation model, similar to the way European soccer leagues operate.  As a break from the normal Rangers-related content around here, I thought it would be fun to explore the feasibility of this idea.  Let’s take a look…

First, some background.  The system itself is commonplace in Europe.  The basic idea is that you have a large set of clubs eligible for multiple leagues within a country’s professional structure, with merit-based promotion or demotion between the leagues.  For our example we are using a two-league system. Each league, call them “A” and “B” for our quick analysis, contains 20 teams and each team plays all others a set amount of times.  Soccer typically plays less league games with all the international play and league/European cup tournaments, which is why they only have a 38-game season, with each team playing each other twice; once at home and once away.

For the NHL, you would have to expand this to something closer to the 82 game season we see today.  If you double the math, you get a 76 game season, with each team playing all others four times; two home and two away.  You would lose a couple games worth of revenue, but with less teams, each game becomes that much more important and in theory, create more individual revenue.

In Europe, instead of playing for playoff seeding, they play for admission into the European cups, like the UEFA Champions League or the Euro League, in which teams from different leagues and countries play for continental titles.  This won’t factor into our analysis here, as the NHL would obviously never scrap the playoff model, not to mention other country’s leagues aren’t nearly as strong as the NHL, as opposed to soccer where leagues from England, Italy, France, Spain and Germany are all fairly comparable.

At the conclusion of every season, the bottom three teams in the “A” league (or four in Tyler’s example) are relegated to the lower “B” league and the top three from the “B” league are promoted to the “A” league.  This system incentivizes lower league teams to strive for success in the standings, allowing access to the greater revenues and media exposure of the higher league, while also motivating the bottom of the league to win to avoid relegation.

So, would this work for the NHL?  I think it would require some wholesale changes that would be difficult practically to implement given the current environment, but also highly unlikely due to a draconian unwillingness to make fundamental changes to an illogically constructed league on the part of the NHL.  It’s still fun to imagine what this would look like, so let’s continue on, the NHL’s obdurate attitude be damned.

Well then, what major differences would we have to account for?  I suppose the first thing we can start with would be the overall economic system.  Soccer, for the most part is pure free agency.  Players typically aren’t drafted or traded for; they are purchased.  Many are signed directly to academies where they train as young players and play for the club’s developmental teams (not wholly dissimilar from baseball’s minor league structure, but soccer’s are typically based on age).  More established players are acquired via a transfer fee, a monetary value paid by the purchasing club to the player’s current club to release the rights to that player.  The player then negotiates a new contract directly with their new team.  This tends to solve one of the biggest problems is trades as we know them, comparable value and team need.  In soccer, whichever team pays you gets the player, and you go out and buy his replacement from a club that fits your needs.

This would dovetail directly into the conversation of Draft order for the NHL.  After the implementation of the salary cap in 2005, I would be incredibly surprised (even in my fictional world where any of this this is possible) if the NHL ever did away with the Draft system of talent acquisition.  I think this is something of a problem that takes care of itself.  Most NHL draft picks take at least a year in the minors to develop into NHL-ready players.  You could have your “B” league losers nabbing the top picks, which could help create additional movement between the leagues on a year-over-year basis.  It would also give the team’s the ability to market their new acquisitions in their sweater right away, and creating marketing opportunities, and therefore revenue, for the lower league around Draft time.

Free agency would still favor the bigger clubs as attractive options.  However, certain destinations like Edmonton, Winnipeg, Columbus and Arizona are tough free agency draws, as it is.  I don’t think any systemic changes will prevent free agents from preferring New York, Montreal, LA, Toronto and Chicago over those cities.  After spending a couple years in the lower league and loading up on draft picks, a Winnipeg might come through promotion in a really good place, talent-wise and actually be in a better position to recruit free agents based on their organizational strength.

You would also have to re-work the model of controlling a player’s rights.  In soccer, a player is basically paid an entry level three-year contract, but after that it is a market value contract with five-year term limits.  Depending on a player’s development curve, big clubs tend to come calling with 18 months or so on that original five-year contract and pay big transfer fees to the developing club.  It’s that type of cash infusion to the selling organization that can help smaller teams with quality development models improve their brand and financial standing as time goes on.

What about the salary cap?  Well, this could get really interesting.  I think you could have a lower cap in the “B” league, which would encourage teams who are being relegated to sell off their more expensive players prior to relegation.  You could see a lot more trades and cap maneuverings based on this type of system.  This would also allow recently promoted teams a big chunk of extra cap space in free agency once they engage in the “A” league offseason.  If you really wanted to get crazy, you could implement the loan system they have in soccer, where the newly relegated “B” league team would loan the player to an “A” league team for a period of time and share the cap hit if the relegated team did not want to lose the rights to the player.

One of the biggest challenges to this type of model would be geography.  The greatest distance between current NHL clubs would be the Panthers and the Canucks.  They find themselves approximately 3,500 miles apart, give or take.  In contrast, France is the largest European country with a top league using this format.  It’s two most distant teams for this year are Monaco and Guingamp, with a distance of approximately 850 miles separating them, which is roughly the distance of the Rangers traveling to Nashville.  For a more extreme example, take a look at England.  It’s two farthest clubs are Newcastle and Bournemouth.  They are abut 350 miles apart, or the equivalent of the Rangers heading over to Pittsburgh.

So, why would this be an issue, when teams travel now and for more games?  First, you have a balanced schedule under this type of system, so you aren’t playing more games against your closer geographic rivals.  Second, is the current conference alignment.  What happens if you have four Western Conference teams all relegated in the same year and four Eastern Conference teams get promoted?  It could cause massive travel headaches due to geographic imbalance.  In Europe, the worst-case scenario really isn’t a big deal, but in North America, it’s considerably more challenging.

How about the playoffs? I would personally scrap the conference system as a whole and have one big league table.  Also, since you are going from 31 teams to 20 for each league, less teams should make the playoffs.  Dellow suggests an eight-team playoff format, but since half the league currently gets in, I would go to a 10 team and give the top two teams a bye as a reward for finishing at the top of the standings.  Since there is no additional revenue coming from Champions’ League or Euro League participation, it’s a nice incentive to fight for those spots.  Keep the best of seven, rise and repeat in the lower league. For promotion, I would have the playoff champion automatically promoted, and if that team isn’t the top team in the league, the top three regular season records would be included with the playoff winner.  Motivation for both regular season success and winning in the playoffs, especially for teams with lower records.

Which of course brings us to how to get the league up to 40 teams.  With the addition of Seattle, the league will be up to 32 teams.  So, we need eight more.  AHL teams tend to be placed in smaller markets, with a few exceptions, so direct promotion of current franchises wouldn’t work for a number of reasons.  The biggest issue being ownership groups of AHL teams simply don’t have the same revenue base or overall wealth to compete with NHL clubs.

We could start with cities that have been on the shortlist for a franchise; Kansas City, Quebec City, Hamilton (but only if they are called the Mustangs) Portland and Hartford.  Now you only need three.  I would look for markets with track records of success with professional sports, like Houston and Milwaukee.  You could even throw in a non-traditional market like Indianapolis or New Orleans.  There are a few AHL cities that could work, like Charlotte, Providence or San Diego, so you would have plenty of options for creating those additional franchises.

What about talent dilution? The NHLPA would obviously be thrilled about adding an extra 185 or so jobs with more teams but might find the new economics effecting 12 of the current (or soon to be current) clubs to be disappointing.  I think a common theory dismissing the attractiveness of this plan would be the dilution of the talent pool.  NHL players are the top 1% of the top 1% of the players in the world.  Adding 185 extra players would presumably have an effect on the overall quality of the product.  I would look at it as an opportunity for finding market inefficiencies as analytics continue to evolve.  When there is less proven talent available, you have to get creative in how you not only construct your roster but deploy your players in different situations.  Whether that would actually happen or not, who knows, considering the rigidness in which NHL coaches and front offices operate, but it would be an opportunity.

Obviously, this type of change is never going to happen.  Never ever.  I do think it would be a really cool concept for realignment and adding some accountability/motivation to be competitive at all times.  There are definitely some issues to iron out and logistics you would have to keep a close eye on, but I think it would be doable.  At this point, league owners would fight tooth to nail to keep their franchises out of a model that saw massive losses in revenue as a consequence of poor performance, but it would just be so much fun.

The best part of implementing massive changes like this would we could finally go to a “3-2-1-0” points model, where you see three points for a regulation win.  Man, this would be so much better than the current NHL.  What do you all think?

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  • “we all know the Rangers SUCK” Tsk Tsk A true Ranger fan never says our rebuilding Rangers suck…

  • This idea is beyond idiotic. The NHL has been around for 100 years, there are more than enough teams already. The idea that fans can’t sit thru the end of a playoff-free season is ludicrous; nobody needs instant gratification this badly. Relegation is a punitive idea, to satisfy fantasy-sports enthusiasts.

    • It’s not about instant gratification, it’s about making the season overall more meaningful. The English Premier League is the most watched sports league in the world and it uses this system. English association football has been around since the late 1800’s, so history isn’t really relevant.

      • Actually, history is quite relevant when you’re talking about the NHL, or any other enterprise that’s been in existence for a century. What’s really irrelevant is that the premier league uses this relegation system, their championship/playoff system is boring and wouldn’t translate to a continent that’s used to having tiered playoff systems based on regular-season achievement throughout its major sports leagues.

        The very idea of relegation is massively punitive. It doesn’t reward merit, it rewards teams that are willing to outspend other teams. Lastly, this league has enough teams. To bring in 10 more would be preposterous, unprecedented, and ultimately damaging to the quality levels of the on-ice product.

        • What isn’t relevant to me in this notion that certain things must be preserved at all costs, when the fringes are altered in meaningful ways all the time, which in the aggregate, makes fundamental changes that no individual decision maker would approve of.

          Also not persuasive in the notion that the set up in Europe is boring. It is massively popular world wide; they must be onto something. I’m also not suggesting the NHL should get rid of the playoffs and go to a seeding championship system.

          The idea of relegation being massively punitive is the whole point. If you incompetently run your organization, you will be punished. The Rangers in the 2000’s spent huge amounts of money to be terrible, so I’m not buying the theory that it only encourages spending.

          To your point about teams, technically, you are shrinking the amount of teams for the top tier league. The bottom tier is basically the AHL on steroids.

          • Again—the European football championships are boring compared to the NHL. And they rely on the participation of the Spanish League, the Italian League, the German League, because their fans want to see some level of championship tournament, where the best teams compete against other excellent teams. To suggest that the Stanley Cup playoffs are somehow less entertaining than watching unmotivated European footballers competing for a trophy they don’t care about is laughable in the extreme.

            I don’t care how many people watch a sport, popularity proves nothing about intrinsic value. Lastly, the “huge money” spent by the Rangers in the 2000s was really spent in the 1990s. The NHL has been a hard cap league since the 2004-05 lockout. Baseball is the true parallel here to European football, it’s uncapped and dominated by a tiny number of incredibly wealthy teams. If you call that competition, I’ll stick with the NHL in its current imperfect state, thanks very much.

          • Houston won the World Series last year. 5 years ago they were losing 105 games and had a ZERO tv rating.

            Your bias is showing.

          • I agree with much of what you said, but you’re way off on Major League Baseball. That league has demonstrated that a greater number of teams are competing for championships in any given year vs. most other major sports leagues. Look at the NFL and NBA, where only a handful of teams have won championships in the past decade. Your “uncapped equals dominance” argument is extremely antiquated.

  • Repeating it again doesn’t make it true. It makes it your opinion. One that is not shared by the vast majority of the globe.

    Once again, I’m not suggesting we get rid of the NHL playoffs and adopt a Premier League model for determining the Stanley Cup Champion. I’m simply suggesting an alternative league structure that would reward teams for success and punish them for failure, rather than the other way around.

    Also, baseball has a much healthier economic landscape than hockey does, so I’ll take their system over the parity = mediocrity model of the NHL.

    • Sorry if I sound harsh, Justin—I normally love your writing on this site. But this article pushes a number of my buttons. As a (very) casual Euro football fan, I think the lack of individual league playoff championship tourneys take out the single most enjoyable aspect of sports for me. And I know it’s popular among sports analysts right now to decry the playoff format/seeding/tournament at the moment, but that is a trend that I truly hate. One aspect of athletic excellence is the type of consistency a great team demonstrates over the long haul of a regular season. But another equally important aspect of sports is the idea of beating the best to prove your own quality. Rising to the occasion of a short, intense, physically grueling playoff tournament says more to me about a group of athletes than doing consistently well over a long season. Relegation after a regular season doesn’t allow for any of this stuff. And there’s many reasons beyond front-Office incompetence that lead to teams being relegated. Oftentimes it’s as simple as how much money is spent on payroll. And to me that’s not athletics, it’s more rich person/1 percenter BS intruding on simple quality-based competition.

  • Off topic

    Tell me other teams are not tanking

    Yeah…..OK then

    On topic
    1 more team and after that wait 5 years and do 4 team expansion and call it good
    KC, Houston, Quebec and Baltimore/Hamilton/Cleveland

    to prevent tanking….the 2 teams finishing last will be the last 2 teams drafting

    Option 2 Incorporate European teams into the NHL

    For me end it after Seattle gets in…that’s enough for me

  • Talk about nothing to write about on a slow Friday with the NYR going nowhere. Almost would rather read an article on the Knicks (OMG No).

  • Every word is like an unnecessary stain on silence and nothingness. – Samuel Beckett

    If that wasn’t enough of nothing, I give you:

    The Fugs – Nothing:

    Monday, nothing
    Tuesday, nothing
    Wednesday and Thursday nothing
    Friday, for a change
    A little more nothing
    Saturday once more nothing

    Sunday nothing
    Monday nothing
    Tuesday and Wednesday nothing
    Thursday, for a change
    A little more nothing
    Friday once more nothing

    Montik, gornisht
    Dinstik, gornisht
    Midvokh un Donershtik gornisht
    Fraytik, far a noveneh
    Gornisht pikveleh
    Shabes nach a mool gornisht

    Lunes, nada
    Martes, nada
    Miercoles y Jueves, nada
    Viernes, por cambio
    Un poco mas nada
    Sabado otra vez nada

    January, nothing
    February, nothing
    March and April, nothing
    May and June
    A lot more nothing
    July, nothing

    ’29, nothing
    ’32, nothing
    ’39, ’45, nothing
    1965, a whole lot of nothing
    1966, nothing

    Reading, nothing
    Writing, nothing
    Even arithmetic, nothing
    Geography, philosophy, history, nothing
    Social anthropology, a lot of nothing

    Oh, Village Voice, nothing
    New Yorker, nothing
    Sing Out and Folkways, nothing
    Harry Smith and Allen Ginsberg
    Nothing, nothing, nothing

    Poetry, nothing
    Music, nothing
    Painting and dancing, nothing
    The world’s great books
    A great set of nothing
    Audy and Foudy, nothing

    F—-ing, nothing
    S—-ing, nothing
    Flesh and sex, nothing
    Church and Times Square
    All a lot of nothing
    Nothing, nothing, nothing

    Stevenson, nothing
    Humphrey, nothing
    Averell Harriman, nothing
    John Stuart Mill, nihil, nihil
    Franklin Delano, nothing

    Carlos Marx, nothing
    Engels, nothing
    Bakunin and Kropotkin, nothing
    Leon Trotsky, lots of nothing
    Stalin, less than nothing

    Nothing nothing nothing nothing
    Lots and lots and lots of nothing
    Nothing nothing nothing nothing nothing
    Lots of it
    Not a God damn thing

  • Good idea would never happen.

    It’s too good a model. Only the nba is looking at emulating this to get the sport to grow.

    Building schools and recruiting people from a young age to foster talent.

    Having global tournaments between all the teams.

    Standardizing rules to some extent.

    Too good to work on hockey.

    Want to stop teams from tanking? Look no further.

  • I have no issue with exploring this as a pure hypothetical on a day where there isn’t much else to write about in Rangersland…but with that said, absolutely and unequivocally: please dear lord, no. No thank you. My ideal NHL configuration is the simple way: scrap divisions, East and West conferences, even amount of teams in each (ideally 32 total), no loser point, top 8 in points from each make the playoffs with conference record for tiebreak, goal differential if still tied after conference record. Easy-peasy.

  • Hey, give us $600mm and we can’t guarantee you a place in the top flight in year two.

    Putting asides historical origins and cultural inertia, you would never get an investor to give a dime when sports franchises are basically looked at as not only profit centers, but tax deferment vehicles along with play toys. They need stable platforms to park their assets in.

    In England, my club was sold for a pound and the promise that the new owner would sink at least $50mm into the club. He hired himself to build a new stand, realizes that this is a hard business, sold to Chinese investors who are using it to launder their money out of China.

    You can buy Sunderland for a pound if you’re willing to take on $130mm of debt the guy ran up unsuccessfully trying to keep the club up.

    In Scandanavia where they are actual clubs run by members, clubs go out of business quite regularly. Espoo Blues went bust 2 years ago, Vaxjo Lakers started after the old club went out of business. Malmo let their entire senior team walk with a month to go in the season because they were broke.

  • When they go to 32 teams, it would be worth exploring a season reduction to 76 games and add a best of 3 play in round for each conference.

    You would have round robin for the league and the division. That would be 3 games a week if you got rid of the mid season vacation week. There’s a possibility to make a regular season league champion awarded in February, followed by a division title battle, then teams 7-10 playing in to a seeded conference tourney. The league year would be the same, the vacation week would be for teams that are 1-6 in the playoff seeding.

    Scheduling 32 teams in a 82 game schedule has a ton of problems. You can’t even get to where you play in your division an extra game, just have 6 games that the only thing you could do is a NFL like gimmick where you would face the other divisional teams that finished in the same spot as your team did the season prior.

  • Justin, thanks for an interesting read. the uncivil responses were completely uncalled for by certain of your readers who are threatened by the concept of someone else’s opinion or thought experiment.

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