Open letter from Preds owner Craig Leipold to season ticket holders...

Feb 24, 2004
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I thought this was very interesting...people have bashed Leipold(I was one) but I have never seen this extensive an amount of economics revealed by a team owner...if these facts are true it'd be hard to blame him, although I'm sure other owners have dealt with similar situations... Link

Craig Leipold said:
The following is an email that Nashville Predators owner Craig L. Leipold sent to all season ticket holders.

Dear Predators' Season Ticket Holders:

June 25, 2007 will mark the 10-year anniversary of the awarding of the NHL franchise to Nashville that became your Nashville Predators. It's been an incredible 10-year journey for me. I can't tell you enough how much I appreciate your strong emotional and financial support of the Nashville Predators. You are a big part of the team's on-ice success. On behalf of the entire franchise, I thank you.

Ten years ago, I couldn't call myself a hockey expert. Today, my family and I are as passionate and competitive about the game as the most hardcore fans.

When the franchise began, I said we would run it as a business in order to be successful. We developed a game plan both on and off the ice. We became an integral part of the community, especially downtown Nashville. We made sure we had some fun. And, we indicated that making a huge profit was not a top priority – but we certainly didn't make plans to lose a significant amount either.





As part of those plans we developed a loyal fan base – every team should be fortunate enough to have a Cell Block 303 and the loudest arena in the league. We built a team that the community could be proud of on and off the ice. We grew our hockey skills exactly as general manager David Poile outlined, using the draft as a foundation and then supplementing at the appropriate times with trades and free agents. We gave back to the community – well over $2 million in grants and in-kind donations through the Nashville Predators Foundation. We created an entertaining in-arena atmosphere for every game night. And, we did it all while keeping our ticket prices near the bottom of the league.

Unfortunately, the success on the ice has not translated to success for me as business owner.

Here are just a few facts as to why:

The Nashville Predators tallied up 216 points in the last two seasons, fifth most in the NHL, yet because of below-average attendance, the team will still have a real cash loss of $27 million during that time. Additionally, that loss is despite receiving the most money in the league from revenue sharing. Over the last five years, the team has lost over $60 million.
We've invested heavily in sales and marketing efforts, spending over $50 million in 10 years, most of that with locally-based businesses.
Our average regular season attendance this past season was 13,589, up from the year before, but still 2,000 below the NHL average. A low turnout, combined with a low ticket price results in a poor financial situation.
The new NHL Collective Bargaining Agreement with revenue sharing is not a cure-all. Each local market must still support its local team. In addition, this attendance does not qualify us for our full revenue sharing allocation under the collective bargaining agreement.
While individual fan support has always been strong, we've worked aggressively to increase our local business support since Season Four. We've tried a variety of approaches with minimal success. Our records show today that corporate support for the Nashville Predators makes up about 35% of our season ticket base. The average in other markets is around 60%. During our first two years, approximately 4,000 businesses owned season tickets. Today, only 1,800 businesses have season tickets.


While my heart and my love of the game tell me we can still be successful, the facts outlined above suggest otherwise. I've reached the only possible conclusion and it's one of the most difficult decisions of my personal and professional life.

Later today, I am announcing an agreement to sell the Nashville Predators franchise and Powers Management to Jim Balsillie. We plan for the sale to be final in early July after a short period of due diligence and approval from the NHL Board of Governors.

I've carried the franchise as far as it can go from a business standpoint. It has been well-reported that we have attempted to attract local ownership since 2002. The truth is, we had only one serious inquiry in that time from someone who was interested in a small minority share of the team. Jim Balsillie is interested in full ownership.

It's time to give someone else a chance to take the Nashville Predators to the next level in terms of local business support. Last week's announcement that the Sommet Group has signed on as a naming rights partner for the arena is a strong first step in the right direction. The new energy and leadership of Jim Balsillie will be another.

Jim Balsillie is co-CEO of Research in Motion, the company which developed the Blackberry device. He is an avid hockey fan who still plays recreationally. I know he is dedicated to putting a great team on the ice.

The past 10 years have laid a foundation, but there's still much to be done to both build corporate support and to win a Stanley Cup. I know Jim shares my passion for the game and my commitment to a strong franchise to pursue the greatest trophy in sports.

Despite the financial challenges we faced, owning this franchise has been the thrill of a lifetime. I've made many friendships here in Nashville. It's been an exciting 10 years, and as I move on from the ranks of team ownership, I'll always remain a fan.

Sincerely,

Craig L. Leipold
 

Jarnberg

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Jul 10, 2002
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However, he doesn't mention how much money he made through Powers Management, the operation which ran the arena and got a ton of money from concessions, concerts, etc.

If he claims he spent that much on marketing, then he didn't put the money in the right places. Our marketing was terrible.

No doubt he wasn't making money, but he's an idiot if he thinks he can instantly build a huge market. Things were on the up swing, but I guess he couldn't take it any longer. And who can blame him when he only paid $55 million for the franchise and then resold them for $220 million.

And frankly, I have no reason to believe what he's saying in this e-mail since it turns out most of the other things he has said have been lies.

Edit: This has also been posted in numerous threads, but I guess you just want to make sure everyone sees it, right?
 
Feb 24, 2004
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However, he doesn't mention how much money he made through Powers Management, the operation which ran the arena and got a ton of money from concessions, concerts, etc.

If he claims he spent that much on marketing, then he didn't put the money in the right places. Our marketing was terrible.

No doubt he wasn't making money, but he's an idiot if he thinks he can instantly build a huge market. Things were on the up swing, but I guess he couldn't take it any longer. And who can blame him when he only paid $55 million for the franchise and then resold them for $220 million.

And frankly, I have no reason to believe what he's saying in this e-mail since it turns out most of the other things he has said have been lies.

Edit: This has also been posted in numerous threads, but I guess you just want to make sure everyone sees it, right?


Pretty much...bits and pieces were posted here and there, but again I thought it was interesting if only to get an inside look into the economics of a hockey team. You also have to think that its doubtful that he's the only owner in this situation...I agree that Nashville fans seem to be getting jobbed.
 

Goallum

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I think it speaks volume that there's not a single mention of the team-moving issue. This tells me that keeping the team in Nashville is not part of the agreement and the team will be moved.
 
Feb 24, 2004
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I think it speaks volume that there's not a single mention of the team-moving issue. This tells me that keeping the team in Nashville is not part of the agreement and the team will be moved.

reporters will ask these questions, do not worry.
 

likewall32

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Feb 6, 2006
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Leipold just said Balsillie on the contract Balsillie signed, he had to sign an "NHL consent agreement" that he would have had to sign in Pittsburgh too, but it says that he has to keep the team here for at least another 7 years. If that's the case, it's good news, for now.
 
Feb 24, 2004
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Leipold just said Balsillie on the contract Balsillie signed, he had to sign an "NHL consent agreement" that he would have had to sign in Pittsburgh too, but it says that he has to keep the team here for at least another 7 years. If that's the case, it's good news, for now.

Like everything, it can be broken very easily. You would have heard about it if it meant something.

Leipold went on to say that if no lease is in place(Preds can opt out if they don't get 14000 two years in a row) the consent agreement can be broken.
 

likewall32

**putt meem hear**
Feb 6, 2006
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Like everything, it can be broken very easily. You would have heard about it if it meant something.

Leipold went on to say that if no lease is in place(Preds can opt out if they don't get 14000 two years in a row) the consent agreement can be broken.

Yes, it can be broken, but should the Preds draw 14,000+, they can negate the move. Balsillie can choose to be a jackass and run the team into the ground, assuring himself the ability to take the Preds elsewhere beyond next season.
 

AdmiralPred

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Jun 9, 2005
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I thought this was very interesting...people have bashed Leipold(I was one) but I have never seen this extensive an amount of economics revealed by a team owner...if these facts are true it'd be hard to blame him, although I'm sure other owners have dealt with similar situations... Link
You should read through Sotnos' "Everything you wanted to know about the Lightning" thread.
 

Slats432

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Jun 2, 2002
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That is what I see. If he really wants to move the team, there is nothing to say that he will put in the resources to make it successful in Nashville. He would likely allow it to fail, and then have an out to move the team.
 

Butch 19

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May 12, 2006
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However, he doesn't mention how much money he made through Powers Management, the operation which ran the arena and got a ton of money from concessions, concerts, etc.

If he was making "a ton of money" why is he selling? Seriously, why sell when you're raking it in?

If he claims he spent that much on marketing, then he didn't put the money in the right places.

Do you know the "right places" to put marketing money in the Nashville market? Seriosly, do you? Maybe the Nashville fan base is just too small and will always be stuck on NASCAR.


Our marketing was terrible.

He built a very competitive team and he's still selling. What other marketing is there besides winning? Maybe Nashville just can't support an NHL team. Maybe there's no one else to market to.

Why do so many "hate-the-owner" fans doubt EVERYTHING owners say? If you owned a team, wouldn't you expect to make money when you have built a successful team?
 

Jarnberg

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Jul 10, 2002
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If he was making "a ton of money" why is he selling? Seriously, why sell when you're raking it in?

I never claimed he was raking it in. In fact, I surely believe he has lost money. That being said, he'll for sure announce his losses as monumental as possible to save face. He doesn't have to disclose how much he makes with Powers, therefore making the losses seem higher. I do believe he is still losing money and does want out. You're misunderstanding me.

Do you know the "right places" to put marketing money in the Nashville market? Seriosly, do you? Maybe the Nashville fan base is just too small and will always be stuck on NASCAR.

I've seen a ton of ideas thrown around by people who point out where the Predators could improve. Me being from the market, and you not, I would hope you'd understand that I probably understand the team marketing a bit more then you. "Seriosly". And for your claim for NASCAR, we don't even have an official race here. Yes NASCAR is popular in the south, but you act like its all we care about. NFL football would be a more appropriate comparison.

He built a very competitive team and he's still selling. What other marketing is there besides winning? Maybe Nashville just can't support an NHL team. Maybe there's no one else to market to.

For your second point, you are right. Maybe Nashville cannot support a NHL team. Its a legimiate question. I'll disagree though, I think with time, any market can build a solid base. Some more then others. As for your point about a very competitive team and what other marketing? You are talking about a league whos games are shown on Versus and playoff games are cut off for pre-race shows. The league gets little coverage nationally. Its not enough to simply win when the average Joe probably has no idea how good a team is.

Why do so many "hate-the-owner" fans doubt EVERYTHING owners say? If you owned a team, wouldn't you expect to make money when you have built a successful team?

You'll find while alot of us are emotional, we won't entirely blame the owner for wanting to recoup his loses. That being said, we have every right to point out when he's lied. Just as we have every right to point out if he exaggerates things. Or point out where we feel he's wrong. For instance, he's claimed corporate support has fallen off from our initial seasons (where we had our highest attendance). Yet I've seen fewer marketing. He's burned alot of bridges with local businesses. I know its simple to point out that we had a successful team. There are a TON of factors in play here.

While I understand Craig not wanting to lose money, I can punch at some of his other claims. Especially ones where I notice he claims we have the best marketing in the league. I've seen numerous reports from Predators fans where they went to other cities and were amazed at how much other teams market compared to us. I can also punch at his claim that its entirely corporate support which is our problem. Or the fact that he thought he could instantly build a strong market in a city with little hockey history, after a lockout, with little national coverage.

I'd hope that you'd perhaps agree with me on some of these issues. No, Nashville isn't the best hockey market right now. Will it ever "work", thats debatable, and I can't fault people for saying some of the things, especially since they don't live here. That being said, I see the building of a market. I see kids starting to play hockey now instead of football and baseball. I see our last playoff game selling out in 20 minutes. I see improvements. It takes time.

I fully support him selling the team if he claims he's losing money. That being said, I don't have to agree with all his statements and claims.
 

dafoomie

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Jul 22, 2005
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NFL football would be a more appropriate comparison.
The Titans moving to Nashville probably hurt the Preds a lot. Every sport in a city has to compete for disposable income, and the NFL is king right now.

From the outside, it looks like Leipold did a good job with building up a base and he gave it everything he could. I just don't think the conditions in Nashville are right today for an NHL team, I don't think they would've been awarded a franchise after the Titans were there.

Its not an indictment of the fans at all, I was surprised by how many people there care about the team. But, ultimately they're competing with the NFL for a finite amount of dollars in that city, and its a battle they can't win. Those businesses are spending their money on the Titans.

That said, I hope they don't move. A team in Hamilton or Kitchener is a silly idea.
 

hockeytown9321

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Jun 18, 2004
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"The Nashville Predators tallied up 216 points in the last two seasons, fifth most in the NHL, yet because of below-average attendance, the team will still have a real cash loss of $27 million during that time. Additionally, that loss is despite receiving the most money in the league from revenue sharing."



"A partnership will ensure 30 healthy and competitive franchises with affordable ticket prices. This is a goal that we will not abandon."
-Gary B. Bettman, October 13, 2004
http://www.nhl.com/fancentral/livechat/transcripts/bettman101304.html

Sure am glad we did so much damage to the league in order to get a partnership that ensured Nashville could remain in the league for another 3 years. Seems well worth it. I wonder what goal we won't abondon after the next lockout.
 

BenThatcher

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Oct 30, 2006
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I doubt the new owner would intentionally mismanage the team in order to get attendance below 14k a game. From the sounds of it, the old owner did everything in his power to attract fans and they only averaged 12k paying customers a game. They were a very good team all year and the picked up the biggest fish at the deadline. The only other thing that might have saved the situation would have been a long playoff run.

This really sucks for the Nashville fans, any chance this new owner moves to KC or Winnipeg instead of Ontario?
 

Resolute

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Mar 4, 2005
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Yes, it can be broken, but should the Preds draw 14,000+, they can negate the move. Balsillie can choose to be a jackass and run the team into the ground, assuring himself the ability to take the Preds elsewhere beyond next season.

Frankly, based on the past couple years, Balsillie doesn't even need to do that. If a team that battled for top spot in the league for much of the year can't draw 14,000, what chance does this team have when the majority of fans already believe the team is going to be relocated?
 

multiball

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Sep 12, 2005
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First and foremost, I feel bad for hardcore Preds fans.

This letter sounds like a well written outline of why hockey has already failed in Nashville. Almost an indictment... I'll bet it comes complete with a PowerPoint deck with several pie charts and downswing bar graphs... Scary.
 

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