Hockey Needs An Ethical Zamboni to Clean Up Its Ice

Opinion
Revised 08/18/03

Brian Ross
Sr. Editor

Have millions of dollars? Looking for an investment a bit more exciting than stocks or mutual funds? Did you play hockey as a kid? Watch hockey at an arena? Know someone who used to clean Brett Hull’s hotel suite?

Does extreme risk make your pulse race, your heart skip a beat, lower your need for Viagra®? Well, my friend, consider the opportunities of setting up a hockey team, or, if you are a true masochist, set up a league!

Of course, if you have millions of dollars, you more than likely didn’t come by them all being a real sucker. So you’ll probably want to check out the markets that you’re going to spend close to four million dollars of your personal wealth getting started.

You’ll want to get cozy because wherever you land you’ll need to spend the next two years planning, then three to five years spending money and working the community just to squeeze out modest break-even earnings.

But you won’t believe that, because you’re smarter than every other rich guy who loves hockey that set up a league before you.

Being the smart guy that you are, you will cleverly come upon the idea that the failure of leagues and teams in that golden gem of a city that you picked happened due to poor cost containment, or poor community relations.

Is it any wonder that anyone is hockey-challenged? The NHL is run by dinosaurs, led by the head Mastodon himself, Commissioner Bettman. He thinks that there really ARE people who follow the stars of hockey beyond hard-core fans and guys named Gil (pronounced Jeel for all of us non-francophiles.).

Bettman and the owners of major league hockey should be truly embarrassed. They have done a poor job of promoting the game, and developing mind share with journalists and fans alike. There is no hype machine that elevates players to Gretzky-like status, pushes rivalries, or does much to educate the hockey-illiterates of sports journalism to the cooler aspects of the sport.

If you want to tell me that a player like Gretsky comes along every generation or three, that is true. There are great players out there who could be bigger than they are now, if the NHL had the kind of hype machines that the NBA, MLB, and the NFL employ.

The NHL also dropped the puck when they failed to establish a full affiliation system with minor league hockey years ago. The IHL would probably still be with us had hockey endorsed regular relationships with the full minor league system.

Dollar Down on Hockey

Owning a hockey team, major or minor, in any city in America is a big gamble. Like all forms of wagering, there are ethical people who do it, and those who try to cheat the game. It is the latter who lay waste to the nascent hockey enthusiasm of communities, that are of particular concern to all who want their teams, leagues, and the sport overall to flourish.

Hockey has grown in leaps and bounds. It has failed in a number of places that it should. It has scorched earth in some promising places that should be hockey towns. The business as practiced in the minors has some of the weakest financial and ethical standards, which, left untreated, may irreparably damage the sport.

The Plight of All Hockey Starts at the Top

Hockey is the begrudged bastard child of professional sports journalism. Major outlets like ESPN would love to dump it into the media black hole with Arena football, and probably would if competitor Fox Sports didn't cover it.

Pull one hundred average Joes not holding a Molson in their hand aside on the street or at a bar and ask them: 'Who is the greatest player in hockey today?'

80% would say that they had no idea, 10% would muster up "Gretsky" and a few living around the Pond or the Garden might actually get one or two of the NHL's more name-pronounceable stars. (If those two locales mean nothing to you, then you are both hockey-challenged and basketball-challenged).

The Ice Farm.

The AHL now enjoys sweetheart status with the big league, but ties into the double-A and single-A communities are sparse and erratic.

Affiliating the minors would provide major league hockey not only with a better developmental system for players, but with the same kind of grass roots fan development that baseball enjoys. Even if you think that the founders of the the World Hockey Association are certifiable for going up against the NHL, establishing a minor league, the WHA-2, to develop talent is at least a head smarter than anything that the NHL has done with the development of the sport.

Establishing a full "farm system" similar to the one in baseball, also helps develop young players who bring balance to an already unbalanced salary scale.

Most importantly to us in the minors, affiliating the teams will strengthen good ownership and put more pressure on those leagues to develop higher standards for both their business operations and their community development.

Hockey's Greatest Ambassador

Football and basketball have the college system established on television and in the hype machine as part of their development (We'd still like to see the CBA and the NBDL get used better to process talented kids who aren't college bound and too wet behind the ears to show up in the NBA.).

Baseball has the developmental ladder of their minor league system to maintain local interest and build fan support around the major league clubs in smaller markets throughout the country.

To date, hockey's greatest ambassador has been its minor leagues. The AHL has strengthened AAA hockey. The ECHL has maintained hockey fervor in the industrialized Northeast, where there are more people who play and follow the sport. The UHL has maintained market presence largely in the Midwest. The Central Hockey League has done perhaps the most remarkable job of establishing hockey in warm-weather towns of the Southwest and Midwest where it was virtually unknown before.

The Scoundrels of Hockey

Presence should not be confused with legitimacy. Many of the hockey leagues and teams, past and present, are horribly operated. They allow owners without sufficient operating capital or front office expertise to damage the sport in markets that have great promise, usually to grow fast to get in on the big territorial land grab of the last few years. The scoundrels of hockey fall into two categories.

There is the well-meaning scoundrel, usually the enthusiastic hockey fan with millions, who gets into the game with good intentions and unrealistic projections. A year to three years into the operation, they are unwilling to spend enough to ride through the developing years storm and bring hockey to maturity in the market.

The darker figure is the carpetbagger owner. These guys have little more than the shirt on their back and a dream. They try to run the first few years on a line of credit and a line of bull. They hope that they will get enough lift from providing comp tickets and just being there to carry them through.

H-Bombs

Both types of owner are H-bombs (H for Hockey) on the towns they drop on to. They leave a path of devastation for the sport from which it is hard, or often impossible, to recover. Core hockey fans who lose season ticket money are reluctant to risk an investment in a new team, even in a well-run operation.

H-bombs burn the sport with city fathers, and with the arenas who would rather have a season of monster trucks and third-rate concerts than risk showing red ink on a hockey team that didn't have the money to pay them in the first place.

It is rare, the Central Hockey League/WPHL being the possible exception, that leagues clean up much of the mess that poor owners have created in towns that have been H-bombed.

All minor leagues have been on a break-neck pace to grow. All leagues, at one point or another, have been irresponsible in their due diligence process to check out the ability of owners to build the sport.

It is hard to turn away someone with the potential money to help develop a league and pay franchise fees. Sometimes, though, you just have to say no.

Many leagues do not act fast enough to intervene in franchises where there is gross financial abuse. Again, the CHL comes to mind as one of the only leagues to step in and replace ownership to support hockey in a community where it is working, rather than just watch a franchise that is either failing or suffering from bad management to go up in flames and take the town with them.

Playing Where They Don't Leave The Light On

There are cities where hockey has no business being. Teams often explode into markets in less than a year, often without any research to find out if they can sustain hockey in the marketplace.

They don't make the grass-roots community-level involvement far enough in advance of their opening to build a sport which, for Americans in growth markets of the South, Southeast, and Southwest, requires a lot of education.

Organizations sign leases in large barns that they can never hope to fill, without even a thought as to the psychological impact on fans. What will the buzz on a team be when there more empty seats than full each night?

Some teams breeze into cities where other sports, particularly college sports, rule the town. The sports media is often unsympathetic to a new hockey organization. The college teams have sponsorship deals that can make it neigh on impossible to get badly-needed sponsorship revenue.

None of these are insurmountable obstacles. As long as you have the cash and the talent to market around them. Many minor league hockey organizations have neither.

The Land Grab

Over the last few years there has been a huge land-rush in minor league hockey as each league tries to remain strong in numbers with the other leagues. Expansion has been, in part, a way to perhaps open the door. The good new markets are, by and large, long gone. This summer desperate leagues have been using hockey sticks like defibrillators, trying to resuscitate marginal markets like Birmingham, AL., Richmond, VA. Asheville, NC., and Macon, GA.

The Big Gamble on Major Misery

The National Hockey League may go dark for a year or more. They want to bring team payrolls down from the $80-90 million range to $30 million. As might be expected, the players aren't anxious to see 60% rollbacks in salary.

The NHL has a number of cities that might sustain good minor league organizations paying prime dollar to major league players that is not being sustained by attendance, television money, or merchandise.

The possibility of this happening is setting off shockwaves in the minors. The WHA (World Hockey Association) of Niagara Falls, NY. is reviving a major league that operated for nine troubled years. Defunct in 1979, it sent four of its surviving teams, the Oilers, the Jets, the Nordiques, and the Whalers into the NHL, the Houston Aeros into the minor leagues, and many more into the trivia books.

The new WHA's bet is that they can establish eight to ten major league teams using players locked out by the NHL strike. They double-down on that wager with the notion that they'll keep these players (or get others) because the NHL won't be fully successful at rolling back salaries.

When the NHL opens its doors again, several teams may no longer be able to survive, leaving players for WHA franchises, and possibly opening up WHA cities.

The spearhead of this gamble is the advance development of the first affiliated minor league in hockey, the WHA-2 (The 2.). The 2 was formed earlier this year from a split in the little Atlantic Coast Hockey League (ACHL). Of the six founding ACHL franchises, three of them, and a developing franchise in Miami, split off to form the 2.

The capitalization requirements of both the major and the minor league don't seem to add up, in our estimation (See WHA Math). Also, if the NHL resolves its labor problems without a lock-out, the cosmic slot machine of dual major league hockey might come up three lemons.

Sketchy Rules & No Diligence

You would think that these hockey leagues would put in place stringent rules to develop only the best ownership groups and management. You would think that hockey leagues would want to develop communities carefully to remain in these places and prosper over the long haul. It would be good business to tell the ticket-buying public all of the things that the league does to insure that a viable, high-quality product is delivered to the public in the markets that they service.

When queried, you get a range of responses from minor hockey leagues. From the CHL and WHA-2, who will show you the requirements for ownership, to the UHL who tells MLN that it's none of their paying public's business.

Due diligence, a fancy term for checking someone's rep out, also varies widely. You would be amazed at the leagues and arenas who will admit franchises into their doors simply because these clubs say that they have the wherewithal to operate.

Something must change.

Bring Out the Ethical Zamboni to Clear the Ice

Minor league hockey needs to hold both league and inter-league summits. Leagues need to come up with published standards that can be presented to the media, to developing communities, major sponsors, and even season ticket holders. They also need to live by them. Most leagues have charters, and even a few ownership/membership rules.

Most leagues' financial requirements are the bare minimum. Their research into ownership groups ranges from fair to appalling.

In our opinion, the Central Hockey League has built one of the best blueprints for league development forged from getting scorched a few times themselves.

CHL president Brad Treliving told me that you have to take a worst case financial picture to operate minor league hockey successfully. A team needs an ownership group with the financial strength to operate at a total loss for two years at a stretch.

You need to pick communities carefully, and develop them slowly, with a year to 18 months as the outside of when an owner should be in the marketplace starting to lay out the groundwork under the ice.

Most importantly, Treliving speaks of a "belief system" that is the core of the success of minor league sports. If you don't have a genuine desire to be very involved in the community, developing the passion for hockey with young people, contributing to charity and to the well being of the market you serve, then all of the advertising and marketing that you do will be for naught.

Treliving has also learned patience. Don't talk up markets until you know that they're gold. If the math doesn't add up, pass on opportunities, particularly marginal opportunities, rather than run a high-risk operation.

The CHL has shown us the pattern for dealing with situations that go South on a league. If an operation isn't viable, shut it down before it can drag down the rest of the league. If an operation is drawing good crowds but not bringing in money, bring in new management and ownership, if necessary.

The rest of the leagues in minor hockey would do well to take on some of the CHL's business playbook.

The Big Hockey House Cleaning

We call upon the AHL, CHL, UHL, ECHL, ACHL, and WHA-2, to come up with standards for establishing teams in towns; some rules for developing markets where leagues are rubbing elbows, and some procedures for dealing with failing teams. It would be particularly ground-breaking if leagues could agree upon a cooling off period for towns where hockey has failed.

We want all leagues to disclose to the media and to the fans what are the minimum standards for the financial operation of clubs in their league. What due diligence does the league office do to make sure that the owners and the general managers have clean records and good financial track records?

It's time to break out the Ethical Zamboni to clean up the ice, treat towns right, and restore credibility to the sport's expansion.