Bettman said the Board of Governors executive committee endorsed a term sheet agreed to with the Friedkins over the next six months. The total investment required between an expansion fee and the cost to build a new arena in one of those cities would amount to $3.5 billion, according to Bettman, who said discussions over the past two years largely revolved around Houston before Austin joined the conversation.

“That’s part of the process is to determine what would be best, both for the league and for Dan Friedkin and family,” Bettman said. “Both cities will require a new arena. It may be more feasible in one place than the other. And as we dig a little deeper and do the due diligence, we’ll figure out which makes the most sense.”

Friedkin is chairman and CEO of the Friedkin Group with a net worth of $6.4 billion, according to Forbes. The Houston-based consortium has investments in the automotive industry, entertainment, hospitality and sports, including stakes in European soccer clubs Everton and AS Roma.

No board vote was taken. That would only come if the sides involved move forward with an agreement.

While there is no guarantee the NHL adds a 33rd team, the move is a first step toward becoming the largest professional sports league in North America, surpassing the NFL. Bettman has said officials were listening to expressions of interest from prospective owners in places like Houston and Atlanta but until now not yet engaged in a formal path toward expansion.

“There was an update on Atlanta, there was an update on Arizona and there was an update on South Texas,” Bettman said. “But neither Arizona nor Atlanta are quite as far along in the process as the Friedkin opportunities.”

Montreal Canadiens owner Geoff Molson, who is on the executive committee, called it an important decision and said, “It’s just an exploration at this stage.”

In a statement released through Pursuit Sports, the Friedkin family said it had reached an agreement with the NHL for exclusive rights to a franchise in South Texas with a focus on Houston and Austin. It said it would be methodical in assessing the best option.

“Each city brings unique attributes that would make a new team a huge success — both have the infrastructure, passionate fan bases and economic strength needed to support a championship-caliber franchise for years to come,” the family said. “We have wanted for some time to bring an NHL team to Texas, and we are excited that the process has now begun.”

The league last expanded to 32 teams with the Seattle Kraken beginning play in 2021 after the Vegas Golden Knights started in the 2017-18 season. Before that, there had been 30 teams since 2000, when Columbus and Minnesota entered.

The recent success stories, combined with booming franchise values across sports, spurred talk of expansion in hockey circles, especially because expansion fees could exceed $1 billion. Seattle paid $650 million and Las Vegas $500 million.

From Florida to Texas to California and places in between, the NHL has enjoyed strong popularity across the Sun Belt and non-traditional hockey markets over the past four decades. Teams were added in South Florida and Tampa in Florida, San Jose and Anaheim in California, Nashville, Tennessee, and Las Vegas, while relocations put teams in Dallas, Raleigh, North Carolina, Denver and elsewhere.

Teams in those places have won the Stanley Cup the past seven years in a row and 13 times dating to Colorado’s championship run in 1995-96.

Board approves Penguins sale

Bettman said the board had approved the sale of the Pittsburgh Penguins from Fenway Sports Group to the Hoffmann family. The deal, reached a year ago, is worth $1.7 billion to $1.75 billion.

“It’s nice that the Hoffmanns got a good deal, and it’s nice that Fenway in five years doubled its investment,” Bettman said. “I still think it’s low, but that’s OK.”

In a statement released by the team, incoming NHL governor Geoff Hoffmann called it a defining moment for his family.

“The Penguins represent everything Hoffmann Family of Companies stands for: community, excellence and long-term thinking,” Hoffman said. “We look forward to building on the team’s success by providing support and resources to both (general manager) Kyle Dubas and the hockey operations team, as well as the established leadership group on the business side. We’re proud to represent this storied franchise and are eager to become an active, invested part of the Pittsburgh community.”