Wednesday, March 3, 2010

SEA DOGS ALMOST WENT BANKRUPT

A very interesting, and somewhat revealing article, appeared in The Globe and Mail newspaper today. Written by Toronto Raptors reporter Michael Grange, it talks about the business side of the Saint John Sea Dogs organization.

More interesting though, is the fact that the Sea Dogs almost went bankrupt in year two after some missed projections in regards to attendance.

Still, the economic rationale for owning a junior-league hockey team continues to elude Scott McCain. The team came perilously close to bankruptcy early on, and as wealthy and hockey-mad as McCain is, he's not interested in losing money forever. “I didn't get into the goddamn thing with a view to writing a cheque for a couple of hundred thousand every year,” he says. Even now, with the Sea Dogs playing like championship contenders, the franchise is lucky to fill half of its 6,300-seat arena. As McCain's operations team struggles to raise attendance and eke out a profit, the corporate titan who has spent his entire career working behind the scenes of the family-owned food conglomerate is getting a schooling in just how hard it can be to run a small business.

For the Sea Dogs, things hit bottom after the second season when the franchise technically ran out of money. (The team's expansion cousin, the St. John's Fog Devils, did go under.) Facing the second of five $200,000 expansion payments to the league, the Sea Dogs' partners had a decision to make: Pump in more cash or shut down. At such difficult moments, (Scott) McCain's steadying presence and business experience have come into play. “He kept everyone calm and focused,” says Wayne Long – and he wrote the majority of the cheques that were needed to keep the players lacing up their skates.

The Sea Dogs are on the brink of cracking the 4,000 fan per game average this season for only the second time in their history. Team president Wayne Long says that he understands that selling-out every game is virtually impossible in this market.

For the first two seasons, the Sea Dogs bled red ink. Long, who as president is responsible for the club's day-to-day operations, admits the partners were simply too enamoured of their product. “We thought everyone would love it as much as we did.” And while Saint John, with a regional population of about 130,000, is one of the bigger markets in the QMJHL, it's not a particularly wealthy one. McCain likes to say that Saint John is a sports town where “if a guy has $50 in his jeans, he'll spend it on hockey.” But with unemployment and poverty rates above the national average, the region may simply not be wealthy enough to fill a 6,300-seat arena for nearly 40 home dates. “An $18 ticket price in Saint John means taking your family to a game is $100 to $120, and that's a lot here,” says Long.

Grange also talks to QMJHL commissioner Gilles Corteau about the (riduculus) pricing about the Telus Webcasts.

As the economy improves, however, and the Sea Dogs' talent matures, more fans are likely to find their way into the arena. And league insiders see junior hockey getting richer over time. The Q generates about $1-million a year in broadcast and webcast rights. A decade from now? “That's going to grow,” says QMJHL Commissioner Gilles Corteau. “Big time.”

It is a must read and can be found by clicking HERE.

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