Quote:
Originally Posted by nfotiu
Isn't this all about protecting the 600 million in franchise fees for a new franchise?
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It was before, but I'm not sure there is much appetite to expand again in the short-term, unless they want to capitalize on a 2nd team in TOR.
600/30 = $20M each (no idea if it's split equally).
A new franchise may help with a very modest in some league wide revenue sources (National TV deals, sponsorship/partnerships, licensing, etc.), but it also means that pie is divided 31, 32, or 33+ ways.
For simplicity let's say all the National TV deals are worth $1B/year. In a 30 team league, that means $33.3M each. 32 teams = 31.3M each. 33 teams = 30.3M.
Of course half of that goes to the players, so it's closer to a $500k per year hit, but if the other league-wide revenue is say $500M then it's more like $750k per year. Therefore over 26 seasons you might 'lose back' the $20M you gained from expansion.
Of course it's a bit more complicated than that, and the expansion fee generally outweighs the pie cutting, but there is a tipping point and you actually have to be able to get that $600M+...
Relocation fee may mean $200M without any real downsides at all.