Promotion and Relegation for the NHL

I know it won't happen, but it is still a good idea.

“Just watch, the Maple Leafs will loose to the Habs tonight and then we will both be sad.” The fact that my friend Josh, a Leafs fan, could say this to me, a Habs fan, in late February suggests that the NHL has a problem. Any system that encourages fans to actively cheer against their team seems flawed on a basic level. But, Montreal is historically terrible this season, the playoffs are already out of reach and the team needs an injection of talent; so here I am cheering for the loses to pile up and Montreal to improve their draft lottery odds. Based on Sean McIndoe (Down Goes Brown) of The Athletic’s ten stages of cheering against your team I am on stage 3 right now. 

Now, cheering for your team to lose and get a high draft pick is not unique to hockey. The practice of fielding uncompetitive teams and loosing to get a better draft pick even has its own name: tanking. This practice of tanking is ubiquitous across North America pro-sports. For reference, take a look at the Indianapolis Colt’s “Suck for Luck” campaign and the multiple “Trust the Process” signs and t-shirts at Philadelphia 76ers games in the mid 2010s. Tanking maybe even caused the current MLB lockout. Pro-tanking sentiments even extend beyond fans to management and ownership, although when executives or an owner admits they want their team to loose, it is often an example of saying the quiet part out loud, as Mark Cuban found out to the tune of $600 000 dollars in 2018.

Tanking though, despite its ubiquity is a problem. Other than playing spoiler, Montreal has 25 or so meaningless games until the end of the season. Even as a fan, when I watch those games, I feel bad every time they win. As much as I love watching hockey for hockey’s sake, fans want to watch meaningful games.

Plus it is pretty clear that teams also are perfectly happy to lose games after the playoffs become only a dream. Every year at the trade deadline some teams are “sellers” which functionally means they make their team worse by selling off expiring contracts for future assets. The problem is that the competitive balance of the league is distorted when some teams essentially throw in the towel at the sixty game mark.

My solution to this problem is promotion and relegation (pro/rel). Now, I recognize that pro/rel will never happen in the NHL or any other franchise-based sports league, but normatively, I think it should become a part of the North American professional hockey landscape. I am going to spend the rest of this column arguing why it is a good idea, practicality be damned. 

First though, let us look at how this model could work in North America. There are already clearly three tiers of pro-hockey in North America with the National Hockey League (NHL), The American Hockey League (AHL) and ECHL (formerly the East Coast Hockey League, now just the ECHL). All these leagues have teams in Canada and the US and are relatively cross-continental in team distribution. The NHL has 32 teams, the AHL 31 and the ECHL 27, for a grand total of 90 teams. With a little redistribution, that produces three leagues each with thirty members.

For determining relegation, the bottom team from each of the Western and Eastern Conferences would go down while the top teams from each of the AHL’s and ECHL’s Eastern and Western Conferences would earn promotion. Teams could then play out the playoffs for the championship trophy. I would suggest that basing promotion or relegation based on regular season results makes more sense as it rewards consistent performance over a whole season and prevents a fluke team from gaining promotion and then losing every game in the league above next season. The only reprieve for teams would be that, unlike in European football, this system would, to start, be a closed system. So the last place teams in the ECHL do not get booted from the entire league system.   

Such a reorganization would also require a drastic reorganization in how the farm team system works. Rather then sending players down to the AHL or ECHL, teams would have to have another avenue for developing players. For a solution to this problem, we can look to European football. First, teams could take advantage of the loan system to send players to a team in the lower leagues. NHL teams already do this with CHL players and, to a limited degree, European prospects. However, the loan system would not have the same flexibility as the current farm team system. Hence, the NHL could create a reserve league similar to the Premier League 2 in England. Each NHL team would have a reserve team that would play against club’s other reserve team. It would also make it much easier for players returning from injury to play conditioning games with the reserve squad.

Introducing a reserve league would not even be that much of a stretch. Many NHL teams are already going in this direction by acquiring their AHL affiliate and placing them in close proximity to their parent team. Montreal, Toronto, Winnipeg and Vancouver all have their farm team in the same metro area (Abbotsford is functionally Metro Vancouver) while Ottawa’s team is only a three hour drive on the 401 away. In fact, Edmonton and Calgary, with their affiliates relatively far away in Bakersfield and Stockton, California respectively, are now exceptions rather than the norm.

Finally, hockey as a sport is not incompatible with pro/rel. The Swedish Hockey League (SHL), arguably the third best league in the world, has promotion and relegation, as does the Swiss League (NLA), the Finish League (Liiga) and, at least some of the time, the German League (DEL). In many ways, the KHL is the outlier with not having relegation from the league for last place teams.  

Okay, so it is possible, but why is any of what I outlined above a good idea?

Well, all other initiatives to prevent tanking have failed. The NHL tried to address this issue by introducing the draft lottery in 1995, partially in response to reports that the Ottawa Senators were throwing games to get a better pick. However, from 1995 until 2012, no team could fall more than one place or move up more than four spots, so coming last in the league still guaranteed you the second overall pick. Starting with the 2013 Entry Draft the NHL made various moves to discourage tanking while still giving terrible teams a reasonable chance to improve by drafting good players. You can read about these changes in extensive detail here.

Regardless of whether teams have a 25% or 20% of getting the top pick, the changes have not worked to discourage tanking. When generational talents such as Connor McDavid are available, it simply makes sense to do all you can as a team to increase your odds of securing him. Sure, the Oilers are still a playoff bubble team with McDavid, but imagine how bad they would be with say, Dylan Strome or Pavel Zacha instead.

Now, there are other plans that could address the problem outlined above. Sean McIndoe suggests the “golden ticket” plan, which he outlines here. It is a good idea. However, I support the idea of totally scrapping the draft and rewarding clubs for developing players through their academy/youth programs. I will write more about that idea at some point in the future but for now, I want to focus on solutions that do not reinforce the centrality of the draft, which McIndoe’s proposal does.

It is also clear that pro/rel would effectively prevent any team from tanking. The threat of losing their status as an NHL club would far outweigh any benefit of a top draft pick. Furthermore, if the NHL kept the draft and gave the top picks to the teams that earned promotion to the top league, not only would you reward winning, you would also remove ANY incentive to loose games.

Second, the threat of relegation means that each team plays many more meaningful games. The fight to avoid relegation is often one of the most intense during any football season for obvious reasons. Yes, fans are nervous but often rally around their team to try and help them ensure safety. This season in the English Premier League my team, Everton, is sitting one point above the relegation zone. The past two games at their home ground of Goodison Park the supporters have created an intense atmosphere to try and help their team. No bags on their heads, no cheering when the other team scores a goal, just fans trying to help their team win.

Furthermore, from a financial perspective, meaningful games improve team’s bottom line. While clubs like Montreal and Toronto can sell-out every game regardless, a team like Ottawa would probably really benefit from playing important hockey games in March this season.

Related to the idea that relegation actually helps teams near the bottom of the ladder, is that promotion and relegation helps solve problems like the current situation the Phoenix Coyotes find themselves in. After essentially getting evicted from their home rink, Phoenix is now going to play the next three seasons (or more?) at the University of Arizona’s rink which seats 5000 people and is built for a NCAA team, not a top-tier professional team. Many players, most notably Brad Marchant, have expressed opposition to this move, as it will limit hockey revenue for the Coyotes and thus the league. Since the salary cap is based on how much revenue teams bring in, Phoenix moving to a tiny stadium keeps the cap lower. Yet, the NHL is also reluctant to abandon the Arizona market entirely. So what does the NHL do?

University of Arizona arena where the Coyotes will play for the next 3 seasons.

Here promotion and relegation solve the problem. Based on their performance this season Arizona would be relegated. But suddenly, a 5000 seat arena is much less of an issue in the AHL than in the NHL. Essentially, promotion and relegation allows teams to sort themselves based on resources.

Similarly, if an owner experiences financial difficulty (or say you allegedly break securities law by failing to report insider trades of your company’s stock) and does not want to sell the team, then relegation provides a safety valve. Rather than having a team only spend to the cap floor year after year, they will drop down the pyramid to a level where the owner’s financial resources are more in line with league averages.

In both of the scenarios outlined above, fans actually benefit from relegation as well. Phoenix may not draw a large number of fans, but there are die-hard Coyotes supporters in the desert. Rather than completely losing their team as Atlanta did, the Coyotes would simply be playing in a lower league. Yes, it wouldn’t have the prestige of the NHL, but these fans would still get to cheer for their team playing professional hockey.

Furthermore, the NHL would also benefit, as they would not be seen as abandoning fans in a given market by ‘stealing’ away their team. Look at Quebec City (or hell, all of Canada) to see how much bitterness remains, even years later. Sure, Winnipeg got their team back but I don’t think Gary Bettman will ever be forgiven. Hell, the NHL Commissioner stealing Canadian hockey teams was even the central plot point to the greatest Canadian movie ever made.

One of the common objections to the idea of pro/rel in North American sports is that owners would not be willing to spend hundreds of millions in franchise fees to get a team, only to see that team be relegated out of the league the next year. Certainly, there is truth to this argument. The NHL would essentially loose out on all future expansion fees. However, the possibility of widespread investment in the sport should more than cancel out the loss of expansion fees. Potential NHL owners would be incentivized to acquire lower league teams and invest in these teams and the associated hockey infrastructure. Thus, rather than having all financial resources concentrated in the top tier of professional hockey, AHL and ECHL teams and their communities will benefit from well-financed ownership groups. Rather than buying your way into the NHL club, owners would have to prove that their team belongs.

Furthermore, this model also removes the requirement that lower league teams be located close to their parent club. St. John’s, Newfoundland or Fairbanks, Alaska are simply too far away from any city with an NHL to be a reasonable location for an AHL club. However, proximity to an NHL team should not be the main criteria for determining whether a city hosts a pro hockey team. The fact that Winnipeg has an AHL team in addition to the Jets is exclusively because the Jets play in Winnipeg. In an ideal world, it probably makes more sense for Winnipeg to have an NHL team with a reserve squad while a mid-size city like Saskatoon or Regina plays host to an AHL team. Ultimately, basing the distribution of pro hockey in North America based on community support is much better for the long-term future of the game.

Ultimately, I think pro/rel would be good for hockey in North America. However, what is good for hockey is not necessarily what benefits the NHL owners. Rather, it introduces a large degree of uncertainty into the NHL’s business model. Plus, no more sweet sweet expansion fees for the current owners (Combined Las Vegas and Seattle paid $1.25 billion). Promotion and relegation were parts of European leagues well before the introduction of big money into football. It is telling that when designing a league from scratch, Major League Soccer (wrongly) rejected the promotion/relegation model. Similarly, the Kontinental Hockey League (KHL), which Russia essentially designed from scratch, also abandoned pro/rel.

It is worth considering the idea though, even if it will never be implemented. If only because such thought experiments serve to show how the policies that best grow hockey both in North America and globally are often opposed to the financial interests of the NHL. It should also serve as a warning for advocates of a professional women’s league who see the NHL as the solution. The NHL will do what is best for its owners, regardless of what is actually good for the game.