A model of professional sport franchises is introduced and used to explore the locational and other determinants of profitability. Particular attention is paid to the effect of location on attendance, market power and long run team quality. When estimated using data for the NHL in 1977-78 the model indicates that location has an effect on each of these and that their combined effect on profitability is effective in explaining prior and subsequent decisions concerning League expansion and franchise relocation. A number of other matters are also addressed, including League arguments for antitrust exemption and League policies to restrict expansion.