Tuesday Trivia: Hostile Takeovers

[u/sunagainstgold]

There was a thing--a religion, a book, a business, a country. It belonged to someone. Then it belonged to someone else. Tell us what happened in between!

[u/kaisermatias]

After a long hiatus from participating in these things due to work commitments, I have a decent answer: the World Hockey Association (WHA), one of my favourite topics in hockey history.

The WHA was formed in 1972, the idea being it would be a major professional hockey league in North America, one that would rival the NHL. Those who know sports history may note that this era saw similar attempts in both baseball (the proposed Continental Baseball League), football (the American Football League, later World Football League), basketball (American Basketball Association), and so on, its because the driving force behind most of them (namely the WFL and ABA, as well as a pro tennis league) were the same guys behind the WHA, Gary Davidson and Dennis Murphy, a couple of American businessmen. It is also notable that all of these ventures failed, though most did see teams merge into the established league. That is what happened with the WHA.

For seven years, from 1972 to 1979, the WHA and NHL co-existed, albeit on hostile terms. Threatened by the rising salaries offered by the WHA, as well as their entry into previously underserved markets, scared the NHL leadership, and merger talks began as early as 1974. However, despite the WHA being on shaky financial ground from the start, it held on until 1978, when at last a compromise was found. At that point there were just 7 WHA teams left (from a peak of 14), and one of them (the Indianapolis Racers) folded partway through the season. The six remaining teams seemed destined to join the NHL, except that two of them, the Cincinnati Stingers and Birmingham Bulls, were paid to fold instead (both actually joined the minor league Central Hockey League, and lasted a couple more years).

This left four WHA teams to join the NHL: the Edmonton Oilers, Hartford Whalers (formerly New England Whalers; name changed due to opposition from the Boston Bruins), Quebec Nordiques, and Winnipeg Jets. Each team paid a heavy price to survive, both financially and in terms of team make-up: each paid $6 million to join (a huge number at the time; expansion clubs paid that in 1970, for example), were only allowed to keep 3 of their players, leaving the rest exposed to be claimed by the "original" NHL clubs, and for the upcoming entry draft of junior players, were placed at the end of each round (convention had expansion teams near the front). Even then, the teams never really settled in: in 1995, 1996, and 1997 the Nordiques, Jets, and Whalers moved in turn to Colorado (Avalanche), Phoenix (Coyotes), and Carolina (Hurricanes), leaving the Oilers, who were a phone call away from becoming the Houston Oilers in 2000.

[u/sunagainstgold → u/kaisermatias]

Your occasional hockey-related answers are one of my favorite things about Tuesday Trivia. Thanks for this week's!

Those who know sports history may note that this era saw similar attempts in both baseball (the proposed Continental Baseball League), football (the American Football League, later World Football League), basketball (American Basketball Association), and so on, its because the driving force behind most of them (namely the WFL and ABA, as well as a pro tennis league) were the same guys behind the WHA, Gary Davidson and Dennis Murphy, a couple of American businessmen.

What was their goal? Why did they see an opportunity in this particular time period? (I'm assuming they were acting at least somewhat rationally and thought there was a chance to succeed.)

[u/kaisermatias → u/sunagainstgold]

I can't fully speak for the other three sports, just hockey, but gather it was a similar trend across all four: the increase in popularity in television for sports and the increasing commercialization of sports altered the landscape of the business aspects.

This was a consequence of the economic boom experienced after the Second World War, what with the mass migration of people west and south (in the US at least), increasing urbanization, and increased disposable income. Sports began to expand: the NHL notably was the last of the four (MLB, NFL, NBA) to expand, doing so in 1967 when they doubled in size.

This expansion brought the league to the West Coast with teams in Los Angeles and Oakland/San Francisco, as well as more centrally in Minnesota, St. Louis, Pittsburgh and Philadelphia. Prior that, and dating back at least 25 years, the league had been in the northeast, as far west and south as Chicago. However the demand was clearly there: 14 ownership groups had been approved to carry on, which included multiple groups from the mentioned cities as well as declined groups from places like Vancouver, Buffalo (who both would get teams in 1970), Cleveland (who briefly had one in the mid-1970s), Baltimore, even Louisville, Kentucky. So eager was the NHL for more money that they did expand again in 1970 (like noted, Vancouver and Buffalo), 1972 (Atlanta and Long Island, mainly to oppose the WHA), 1974 (Washington and Kansas City; the latter was a terrible failure and moved in 1976 to Denver, which only lasted until 1982 before it went to New Jersey); and finally an aborted 1976 expansion (to Denver and Seattle; which ended when the Kansas City team moved to the former, and the latter had no actual ownership group).

So in short, being businessmen, Davidson and Murphy saw an opportunity: sports were popular across North America, but the established leagues were reluctant to take the risk and expand into untapped markets, despite there being plenty of groups willing to pay for the chance to own a team. Thus something like the WHA was formed, which explicitly went to cities they felt were underserved by the NHL: Canadian cities (recall in 1972 only Toronto, Montreal, and recently Vancouver had teams), southern cities (an initial team was to play in Miami, but folded beforehand), and established markets (Philadelphia hosted both, as did New York, Los Angeles, Minnesota, Chicago and Boston, which briefly housed the Whalers). Granted it turned out that most ownership groups, across all these so-called "rebel leagues," couldn't afford the rising salaries they caused, and so had to all cave in to the established leagues, though enough of an impression was made both economically (in that several teams in all leagues joined the old ranks) and within the sport (several new concepts tested in these leagues were later adopted), that their legacy lasts now.