Tuesday, May 31, 2011
Gone With the Winn(ipeg)
Atlanta Thrasher Hockey Fans: "Oh NHL, if you go, where shall we go see hockey, what shall we do?"
The NHL: "Frankly, suckers, we don't give a damn."
(With apologies to Margaret Mitchell)
For the second time in the history of the city, Atlanta has been burnt in their relationship with an NHL team. Soon, the moving trucks will back up to their arena and begin the process of relocating the Thrashers to Winnipeg as True North Sports and Entertainment announced an agreement to purchase the team from the Atlanta Spirit Group, pending approval by the NHL's Board of Governors. The total purchase price of the Thrashers is $170 million, of which $60 million is a relocation fee that will be divided among the other 29 NHL clubs.
While the excitement builds for a return of NHL hockey to Winnipeg, the hearts have been ripped out of the hockey fans in Atlanta.
Believe me, I have long thought that there should be more NHL teams in Canada. This is not, however, how I wanted it to happen. For the loyal and passionate hockey fans in Atlanta, today's announcement is doubly painful, because it was a direct result of the ineptitude of the ownership group that ran this franchise into the ground.
The autopsy of this franchise will yield some instructive results for other owners and for the League itself. There are important lessons to be learned that, if taken to heart, will hopefully help prevent the recurrence of this painful process.
Lesson One: Vet the Owners
The history of the NHL is replete with sketchy owners. Unfortunately for hockey fans in Atlanta, the Thrasher ownership group will be added to that ignominious list. Almost from the outset, the Atlanta Spirit Group fractured, with lawsuits being filed among the partners. The distractions in the front office detracted from the efforts to market to and build the fan base in Atlanta, not to mention had a bearing on the on ice product. There is no secret that building a successful franchise in a "non-traditional market" takes nurture and attention to detail. With the tumult in the front office of the Thrashers, this did not happen. In fact, one of the owners, Michael Gearon, Jr., stated that the owners had been trying to attract investors or sell the team since 2007, but could not interest potential investors/buyers because of the losses suffered by the franchise and because of the on-going litigation among the owners. That litigation was settled in December, 2010, but by the then, the franchise had suffered a mortal wound.
Who knows if the Thrashers owners would have managed to make the franchise successful in Atlanta. The fact that they were involved in litigation among the ownership group certainly did not help the efforts to attract fans and ultimately potential investors. Overcoming these additional obstacles almost certainly doomed the Thrashers.
If the NHL wants to avoid the mistakes of Atlanta, it is incumbent that the vetting process that the League uses must improve. That process, especially with multiple owners in an ownership group, must examine not only the financial aspects of the partnership, but the business and interpersonal relationships between the partners. As the situation in Atlanta has shown, a fractured ownership group at cross purposes will quickly take down a franchise. The approval process must include a dispute resolution mechanism rather than leave owners to their own devices. The nasty and lengthy litigation among the partners in Atlanta spooked potential investors who possibly could have stepped in and helped to save the franchise. If potential owners feel as if they have been through a rather painful proctology exam, so be it. That doesn't compare to what hockey fans in Atlanta have been through.
Lesson two: Franchises Must Be Nurtured
The situation in Atlanta demonstrates clearly that a franchise must be nurtured. It takes a hands on, tender loving care process that engages the individual fan and the attracts the corporate dollars. I am not privy to the financials of the Thrashers, and I don't know the level of corporate support they were receiving from the local business community. It is telling that in a city that boasts the headquarters of international companies like Home Depot, Coca-Cola, and Delta Airlines, the ownership group could not attract sufficient corporate support to help keep the team. This indicates to me that the ownership group had not connected with the local business community in a meaningful way.
One can look at the empty seats in Phillips Arena to realize that the effort to cultivate a growing fan base was lacking as well. In a city the size of Atlanta, there are numerous alternatives for individuals to chose from to allocate their entertainment dollars, and those individuals have to be attracted and persuaded to spend their dollars with the hockey club. This did not happen consistently. The fan experience has to be attractive enough to bring the casual fan back and get them hooked on the game. With the distractions that the team faced, they obviously were not successful in doing this.
One has to acknowledge the fragility of a "non-traditional market". Face it, there are numerous entertainment options; the weather is nicer for a greater part of the year than in northern markets, which lures individuals to outdoor activities; and hockey is not in the DNA of a new market. All of these factors mean that a hockey team in these markets has to work harder to attract- and more importantly retain- fans. The Thrashers internal strife distracted the team from successfully luring and retaining fans.
Lesson three: Economic Conditions Change
Right now, Canadian franchises enjoy a strong Canadian dollar, which obviously helps their teams show a profit. Given the monetary policies of the United States, this condition is likely to persist for some indeterminate time. But it will change. One has to only look back to recent past to see Canadian franchises struggling because of their weak dollar.
The point is that economic conditions change, oftentimes in a manner that is not favorable. Many U.S. franchises suffered, and continue to suffer, because of the recession. Franchises that need to have the sun, moon, and stars, align perfectly to survive are skating on thin ice (pardon the pun). This is the case for many teams. Every franchise has to have financial staying power, and this goes back to lesson number one: the vetting process has to realistically determine the ability of an ownership group to absorb loses. Not only from a financial standpoint, but from the strain that it will put on the partners. The strain of absorbing losses from the operation of the Thrashers contributed to the dissension in the ownership group.
Lesson four: Lose the Parochial Attitude
There are too many who believe that hockey only belongs in colder climes; that hockey is Canada's game and doesn't belong in the sun belt of the United States. Yes, hockey was perfected in Canada, and it is interwoven in to the culture and fabric of that great nation. But hockey is no more Canada's game than football is the United States' game. Look, you Canadians play a screwed up game of football: the field is too big; you have too many men on each side of the ball; the ball is the wrong size; and you have men in motion on every play. Yet you don't hear the outcry in the States that football doesn't belong in Canada.
Here is the problem with that parochial attitude: you are fighting the growth of that beautiful game in parts of the States that have a growing population and that are learning to love the game. Frankly, small minded "pundits" like Ken Campbell and Howard Bloom, who promulgated an unfounded rumor that Nashville would be relocated within five years, do nothing to help the game. These guys resent hockey in the sun belt and will never be persuaded that it belongs here. Yet the fastest growth of participants in hockey is occurring in the sun belt. Kids are growing up with the game, refining their skills, and learning to love this sport. I am still waiting to hear a rational explanation from these folks, and others like them, as to why this is bad.
Growth of the game at all levels is good and desirable. Fighting that growth every step of the way with an attitude that can only be described as neanderthal is foolish and short sighted.
There are probably other lessons that we will take away from the painful relocation of the Thrashers. As I mentioned earlier, I think there are Canadian markets that deserve teams. There are also U.S. franchises that are struggling, and there will be those that posit that those teams should be uprooted and relocated. That is again short sighted and foolish. The fact is, fans will not commit to a team that is constantly rumored to be on the move. This is detrimental to the long term health of the game. And the fact is also that hockey is thriving in many sun belt markets, and will continue to do so, in spite of the sentiment expressed by some that it doesn't belong there.
Take these lessons and learn from them. Strengthen existing franchises and make sure that new ones are properly vetted and prepared for the challenges of operating a team.
And keep other teams from being gone with the Winn.