Advice: Owning a junior hockey franchise

Discussion in 'The Business of Hockey' started by Twist and Shout, Apr 28, 2006.

  1. Twist and Shout

    Twist and Shout Registered User

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    I hope this can stick here. I posted it on the junior hockey board, but haven't gotten a response.

    Ever since I've played hockey at the junior level, I've known that I wanted to be involved in junior hockey in some fashion even when I was older, and in another career altogether.

    I am only 19 years old this year, so I have some time to look at different options in the business, but I have my mind set on buying a Junior A/major junior franchise or becoming a part-owner of an OHL franchise.

    I have been blessed financially, so I think I could manage in that regard. However, I have a few questions for anyone who might be able to help.

    1) How much do Junior A/major junior franchises usually go for? I did some research and discovered that Junior A franchise's presently sell for $250,000 - $750,000 (and can be cheaper or more expensive) depending on location. Is this accurate?
    2) What additional costs will there be? (advertising, etc.)
    3) What are the general duties of an owner of such a franchise?

    I'm going to keep learning what I can about what it takes to run something like this, but I would appeciate your help. Thanks.
     
  2. Alpine

    Alpine Registered User

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    The last two Q expansion fees were $3 million each for Saint John Sea Dogs and St. John's Fog Devils. So I think buying a team may have gone up in price from $250,000 to $750,000 unless you plan on assuming a lot of the debt. But if you can buy a Q team for $500 G let me know Fredericton is looking for a team!
     
    Last edited: Apr 28, 2006
  3. Twist and Shout

    Twist and Shout Registered User

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    Yeah, and the Windsor Spitfires got sold for 5.1 million. I was looking for something on a smaller scale with a starting investment of nothing more than 2 million.

    I wonder how much the cost to buy a Junior A franchise will increase in 10-12 years.
     
  4. Lots and lots of money.

    And when you think you have enough money to own a team, than double it.

    I have been involved with several rich people who buy a hockey team, and once they realize how much it costs, they want to get out, usually about halfway through the season, then they let it wither and die on the vine, and usually end up running out of town...
     
  5. Twist and Shout

    Twist and Shout Registered User

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    Maybe in the future ;)

    I am not capable of running a junior hockey franchise, as much as I believe I can, at this age. Still needed to educate myself further, and look at various options.

    Hope Fredericton gets its team though .. good hockey city

    Teams in densely populated areas which would normally be successful no longer have such success because of an increase of teams in the area (like Toronto, Mississauga, and Brampton in the OHL). I need to search for locations where people will actually fill the building with some level of consistency.
     
  6. Twist and Shout

    Twist and Shout Registered User

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    Yeah, but many of those people are in it mainly for the money.

    As bizarre as this may sound, I'd be in it primarily to be around the game on a daily basis, assemble a winning organization, and anything over breaking-even would be gravy. I'd be in another career to make money, and owning a junior hockey franchise would be something I'd look after full-time after I near my 50's.

    I know you need a lot more than a certain amount of money to have a successful organization. You need to be dedicated and passionate about what you're doing.

    Thanks for your comments.
     
  7. If making money, or breaking even isn't your thing, than by all means, have a great time! It will be a blast, I will say that.

    I lived the life on the road with a professional hockey team (The Miami Manatees of the WHA2) for a good nine months, and it was a memorable and exciting time...
     
  8. God Bless Canada

    God Bless Canada Registered User

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    I do indirect work with junior A hockey here in Saskatchewan. This could be a darkhorse for you. It's a strong league, with our teams generally faring well at the national level (2 RBC titles and two national runner-ups in the previous five tournaments). The SJHL also tends to attract prominent tournaments. (4 RBC's from 1996 to 2005, and Yorkton hosted the inaugural National Junior A prospects game last year and they'll host the inaugural World Junior A challenge in November).

    Attendance can be strong. Flin Flon, (located in Manitoba but the play in the SJHL) even when they missed the playoffs for four straight years, attracted well over 1,000 fans a game. Most teams will average 600-800 fans a game, and it's time for a big rivalry game (Battlefords-Kindersley, Nipawin-Melfort, Estevan-Weyburn, Melville-Yorkton, etc), they'll get upwards of 1,200-1,300 fans. Most rinks seat about 2,000. The teams are generally located in large towns or small cities (between 4,000 and 15,000) people and are the only shown in town. Come playoffs, it's quite common to see 2,200-2,500 people in the rink.

    Here's the catch: Flin Flon (located in Manitoba) and Notre Dame (owned, of course, by the school) are, I believe, the only privately-owned teams in the league. The rest are all community-owned. I've heard rumours for years of teams going private, but nothing has ever happened. If the right buyer, one who is committed to the team and the city for the long-term (and I do mean long-term) were to come along, they might be looking to sell.

    Lots of annual expenses. You have to pay for your coaching staff and office manager, and offer some form of per diem to your scouts. In this league, the training staff volunteers in a lot of cities, but if the team were privately owned, that might change. Travel is a big expense, especially with bussing and hotels on nrothern road trips. (AJHL teams make long trips to Fort McMurray and Grande Prairie). You also have to pay billets for hosting players throughout the year. You might have an arena rental fee, and you will have to advertise to promote the team.

    Hope this helps you out.
     
  9. Alpine

    Alpine Registered User

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    Look I dunno about SJHL, but the Charlottetown Abbies of the MJAHL are for sale and I don't know what the asking price is but MJAHL averages 750 + a game for attendance with some teams pushing 2,000. Top sponsorship of teams goes for $25,000 a year. Moncton Beavers is looking a major sponsor as Orion Seafoods decided not renew their $25,000 a year gift that they've been giving for the last number of years.
     
  10. Douggy

    Douggy Registered User

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    I wonder how much it would cost to just throw together a Junior D team? Do coaches at that level get paid?
     
  11. God Bless Canada

    God Bless Canada Registered User

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    Is there such a thing as Junior D? I know they have Junior C in Ontario (a friend of mine playing in the NCAA played Junior C in Ontario when he was 16), but before I met him, I'd never even heard of Junior C, let alone Junior D.
     
  12. God Bless Canada

    God Bless Canada Registered User

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    Charlottetown's a pretty good program, aren't they? Didn't they win or host the RBC a few years ago?
     
  13. Alpine

    Alpine Registered User

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    YES, YES , and YES. They have a good lease too at UPEI's McLaughlin arena. Rumour has it that Serge Savard Jr. the owner of the PEI Rocket of the Q is going to buy the team.
     
  14. CofRed

    CofRed Registered User

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    Yeah Junior D is the Junior C equivalent in SW Ontario. I played a year in that league when I was 16. The same way that Junior B is basically the same level as Provincial Junior A. It just depends on the area.

    As for the initial question, it would cost much less to own a Junior A or B team (as opposed to MAJOR Junior). A junior D team could be had for a tiny price (25k as an initial outlay).

    As for a Q team in Fredericton, is this in the future plans? I just moved here 7 months ago, and this city loves its hockey. The only draw though is University hockey (UNB and STU). We don't even have an MJAHL or Senior team. What rink would they play in?...The new one built on the Northside?
     
  15. Alpine

    Alpine Registered User

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    It's in the rumour stage. But the City of Fredericton will have a 4,000 seater (as the rumour goes) as part of a multi-plex (3 pad I think) open for the 2007-2008 season or maybe the next season. So they'll be looking for a tennant. The Q is a natural. God I miss the Fredericton Canadiens of the AHL. Went to many games at the Atkien Centre.
    As far as MJAHL Woodstock is only 45 minutes up the road you know! They had an outstanding season. There is no Jr B in New Brunswick, but Freddy has two Jr C teams.
     
    Last edited: Apr 28, 2006
  16. CofRed

    CofRed Registered User

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    Lol the Junior C in NB is about 7 levels below the Junior C in Ontario...I would put it on the same level as maybe Midget A hockey...Plus, im too old to play that anymore anyway. I do know that there is a new arena planned for STU, and the one across the river, which I believe is the 3 plex you mentioned. Im here for a few more years so hopefully they can bring in some good hockey.
     
  17. Twist and Shout

    Twist and Shout Registered User

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    I do follow the SJHL with some consistency, and I think that owning a well located team in the league could have much potential.

    I heard about that, and I e-mailed a few people .. however, I haven't received any approximate dollar figures.

    Yeah, I understand that getting into something like this would result in a great assortment of expenses.

    However, it's quite hard to get a gauge of these expenses from the outside looking in. Would you happen to know how much coaching staff and office managers in the league are paid on average?

    Advertising is very important I think especially for small-market organizations (like a team in the SJHL), so a lot of focus would have to be put into getting people in the community to attend games on a regular basis through such means.

    Appeciate the help, GBC!
     
  18. Dario Cueto

    Dario Cueto KIND OF A BIG DEAL

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  19. Fedz

    Fedz Registered User

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    Last year, after the South Surrey Eagles won the BCHL Championships, and lost to the Camrose Kodiaks in the finals for the right to play in the RBC, the team was sold for $1,900,000 to a local investor.

    Top Junior A teams are expensive. If you were to start out, I'd start out with a Junior B team in an area that has a good solid core of people, that is really cheap.

    Buy players into the organization with your money and be involved with the team and they'll evolve, and you'll gain tons of money doing so.
     
  20. Ogopogo*

    Ogopogo* Guest

    Major junior teams sell for bigger $ if they are profitable. I suspect, the Kelowna Rockets would sell in the $3 million range. The Vancouver Giants or Calgary Hitmen might be closer to $5 million. Some of the smaller markets that are losing money could be had for considerably less.
     
    Last edited by moderator : Apr 29, 2006
  21. VOB

    VOB Registered User

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    Major A is a multi-million dollar investment and requires annual budgets in the 1.5 to 2 million dollar range for the "average" teams and around 3 million for the larger franchises.

    If you are really serious about investing in a Junior A franchise, PM me because I know of one that just might be available to you are a bargain price.
     
  22. Twist and Shout

    Twist and Shout Registered User

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    Not now .. just looking to learn more about ownership and hopefully purchase a Junior A/Junior B team in 10-12 years.

    Do you have any approximate figures of what would annual budgets for Junior A teams be now?
     
  23. VOB

    VOB Registered User

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    Depends on what league you are looking at. Most Ontario Junior A/B budgets range from a low of 100k to a high of around 250K

    From what my friends on the left coast tell me, the operating budget for your typical BCHL team runs about 350K.

    Cost of running a Junior A franchise in the U.S. is much higher due to higher operating costs (coaches' salaries, travel, ice rental fees ect.) Operating budget for your average NAHL team is around 400 to 500k while the USHL is 800k to just under a million.
     
  24. discostu

    discostu Registered User

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    I don't know much about the financial details of Junior Hockey, but, the advice that I'd give, if you're serious about it, is to get some experience/education in the business.

    If you're blessed financially, and you jump into something like this without the experience, you won't be blessed for long.

    To start off, I'd look to get a general business education at the least. If you're talking about owing a business like this, you'll need to have the basics of finance,accounting, marketing, management, etc. under your belt. You've talked about having time before you'd look to do something like this, so, perhaps you're already going to school.

    I'd also suggest talking to people in the industry. If you contact some of the owners of Junior franchises near you, you could probably get a lot of your questions answered from them directly. Ideally, you may be able to convince them to hire you in some capacity. Learning the ropes from behind the scenes would probably be invaluable. If they can't afford to hire you, and, you have a big bankroll to support yourself, heck, volunteer to work for free.

    Just be careful though, having the capital, and not the experience of investing, may attract the wrong people to be looking to do deals with you. A lot of people may look to take advantage of that.
     
  25. derbyfan

    derbyfan Registered User

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    Are they seriously talking about more expansion? Not that Fredericton doesn't deserve a team - the maritimes have obviously proven to be big supporters of the QMJHL. However, I think the CHL in general should stop with the expansion - I prefer to see a less watered down product.
    Is this a case of a franchise moving, or expansion?
     

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