Houston to Des Moines ?? Or Sioux Falls, SD? UPD: Iowa Wild approved

[Sports Enthusiast]

Into the arena & market issues, a little warning.

When the WCHL was absorbed into the ECHL, seven teams made the jump:

Alaska (Sullivan Arena, 6,000)
Bakersfield (Rabobank, 9,000)
Fresno (at the time, Save Mart Center, 15,000)
Idaho (pick your corporate name of the year here, 5,000)
Las Vegas (Orleans Arena, 7,500 or so)
Long Beach (Long Beach Arena, 11,000)
San Diego (13,000)

The teams alive today... Alaska, Bakersfield, Idaho, and Las Vegas. The teams with the bigger arenas croaked.

Yes, I do think there's an arena trend, and it matters in the AHL. However, yes, there's a bit of an apples-oranges factor in the comparison. The AHL is far more vital to the NHL, the affiliations are real (I believe most of the E's affiliations are paper, and usually involve only a handful of players per team in the best situations), and there's more effort to travel more teams to more cities than in the E.

Chicago's a historical outlier because it came on like gangbusters and has kept momentum going for some time. However, 1,000 season tickets? If someday, for whatever reason, there's a downturn, your goose is cooked. Even with a building lease that's potentially very beneficial, depending on walkup is dangerous business.

Thing is... I'm not surprised by Houston. I am surprised that Des Moines built that big an arena. That's going to be an issue, even with a Wild affiliation.

Then I can sense big market v small market issues. Hello, Houston, meet Binghamton. Some big city folk with big city egos would prefer more of Cleveland and Baltimore and Cincinnati and Atlanta and less Binghamton and Adirondack and Springfield. BUUUUUT the arena game doesn't always work in favor of this arrangement. This hockey thing is a curious beast.

I cant speak for what the Des Moines arena was intended for but it's clear that the Toyota Center is for the Rockets and the Aeros were just a secondaey toy. I think they wanted NHL. Didn't the same man who owned the Rockets and Toyota Center own the Aeros?

 

[Tommy Hawk]

None of the arenas were built specifically for the hockey team. They were built to meet many different needs. The WF was built in Des Moines because they had no other decent arena to house large events.

Even the arena in Hershey and Manchester were built to replace old buildings used for other things besides hockey.

 

[Tommy Hawk]

Into the arena & market issues, a little warning.

When the WCHL was absorbed into the ECHL, seven teams made the jump:

Alaska (Sullivan Arena, 6,000)
Bakersfield (Rabobank, 9,000)
Fresno (at the time, Save Mart Center, 15,000)
Idaho (pick your corporate name of the year here, 5,000)
Las Vegas (Orleans Arena, 7,500 or so)
Long Beach (Long Beach Arena, 11,000)
San Diego (13,000)

The teams alive today... Alaska, Bakersfield, Idaho, and Las Vegas. The teams with the bigger arenas croaked.

Yes, I do think there's an arena trend, and it matters in the AHL. However, yes, there's a bit of an apples-oranges factor in the comparison. The AHL is far more vital to the NHL, the affiliations are real (I believe most of the E's affiliations are paper, and usually involve only a handful of players per team in the best situations), and there's more effort to travel more teams to more cities than in the E.

Chicago's a historical outlier because it came on like gangbusters and has kept momentum going for some time. However, 1,000 season tickets? If someday, for whatever reason, there's a downturn, your goose is cooked. Even with a building lease that's potentially very beneficial, depending on walkup is dangerous business.

Thing is... I'm not surprised by Houston. I am surprised that Des Moines built that big an arena. That's going to be an issue, even with a Wild affiliation.

Then I can sense big market v small market issues. Hello, Houston, meet Binghamton. Some big city folk with big city egos would prefer more of Cleveland and Baltimore and Cincinnati and Atlanta and less Binghamton and Adirondack and Springfield. BUUUUUT the arena game doesn't always work in favor of this arrangement. This hockey thing is a curious beast.

The teams with the bigger arenas didn't croak because of the arenas, they croaked because of the owners. Springfield has lost its ass every year they have been in existence. Even Rochester was complaining about losing money and they paid only 200k per year to rent the arena.

It is completely irresponsible to think that a team like binghamton, adirondack, sprongfield make money because they have a smaller arena. Just like it is irresponsible to think that teams that draw well make money. The Wolves lose money but not because of the arena. They lose money because they employ twice or more than most any other team. They lose money because they have a practice facility that rivals NHL facilities. They lose money bcause they give a lot to charities instead of selling thing for their own profit. Look at how much they make for charities from their jersey raffles and specialty jerseys.

Until one of you provides the financials for a team, the thing we now of that can be calculated with a reasonable certainty is revenues. Revenues is people times ticket price.

Using revenue as a guide, the teams in a small arena just cannot compete with teams in a larger arena. drawing 3600 (binghamton) or 4,000 (Springfield) at an average price of say $16 brings in $2.2 mil and 2.4 mil. Chicago brings in twice the number of fans. Even if the Wolves average ticket price was the same, that means they bring in 4.8 mil in revenue. If their affiliation fee was 1 mil more per year and their arena rental was $1 mil more per year, they STILL have 400k more to spend on other things than Binghamton or Springfield does. By that same token, Hershey draws 2000 more per game than the wolves so they would have revenues of about $6.1 mil.

So, if I were an owner, I would rather have a larger arena where the potential to make money is there instead of being limited to revenues of only 4710 people per game (Binghamton) totaling $2.9 mil or seating 6866 for revenues of $4.2 mil (Springfield).

Money talks and money equals butts in seats.

 

[mfrerkes]

They had these same issues before and did well. They will have to have a better front office and continued marketing but if the job they did in Houston is any indication, Des Moines will have an excellent staff and will be marketed. Downtown Houston is basically dead after 5:30 PM, there is hardly anything around the Toyota center other than the Hilton and the Grove (really pricey) restaurant.

I don't know how you can say the Chops did well. Schlegel took out a big loan and used his team as collateral, violating the AHL's rules on that matter. He stiffed Anaheim on their affiliation fees. That is not the sign of a franchise doing well.

This will be a clean slate for Des Moines. However, the NBDL club has picked up quite a following since the Chops left. The Stars never had to contend with a serious basketball competitor in their arena. The Buccaneers are still holding on to their loyal USHL following as well.

Initially, I see the Wild affiliation garnering some interest during that first season. It wouldn't surprise me if Des Moines averages about 5000 per season next year. However, the Stars also averaged 5k+ during their first season, and the attendance dropped to 3700 per game by Season #3. History does tend to repeat itself.

 

[Tommy Hawk]

I don't know how you can say the Chops did well. Schlegel took out a big loan and used his team as collateral, violating the AHL's rules on that matter. He stiffed Anaheim on their affiliation fees. That is not the sign of a franchise doing well.

This will be a clean slate for Des Moines. However, the NBDL club has picked up quite a following since the Chops left. The Stars never had to contend with a serious basketball competitor in their arena. The Buccaneers are still holding on to their loyal USHL following as well.

Initially, I see the Wild affiliation garnering some interest during that first season. It wouldn't surprise me if Des Moines averages about 5000 per season next year. However, the Stars also averaged 5k+ during their first season, and the attendance dropped to 3700 per game by Season #3. History does tend to repeat itself.

Those two items had nothing to do with the team. The team was put as collateral on loans not related to the team and his not paying Anaheim was his decision for whatever reason. These items were owner stupidity, not related to the franchise "doing well".

If Hershey decided not to pay Washington because they had a disagreement with the Caps owner and the owners put the franchise up as collateral on a loan to buy a car dealership, would Hershey be "doing well"? Hershey would still be "doing well" though the owner might not be.....

 

[LadyStanley]

Houston to Sioux Falls, SD?

SI_NHL 10:23pm via SI.com Minnesota Wild may move AHL affiliate to Sioux Falls on.si.com/12KyoCU



Could share arena with USHL team. USHL owner is former AHL Aeros President. 12k arena on the drawing board.

 

[Aero 75]

SI_NHL 10:23pm via SI.com Minnesota Wild may move AHL affiliate to Sioux Falls on.si.com/12KyoCU



Could share arena with USHL team. USHL owner is former AHL Aeros President. 12k arena on the drawing board.

Sioux Falls was originally where it was thought the Aeros could land after the TC lease expired. This article from the Aeros blog almost a year ago discusses why that could happen:

http://thethirdintermission.blogspot.com/2012/05/things-that-make-you-go-hmmmmmmm.html

Thoughts on why the Des Moines deal might not happen:

http://blogs.houstonpress.com/hairballs/2013/04/aeros_moving_des_moines.php?page=2

 

[No Fun Shogun]

Sioux Falls does make sense for the Wild. Still close to Minnesota, decent enough fan support, and an available arena. That being said, having the AHL and USHL both there seems like a bad idea, as it's not that big of a market.

And, if my longstanding prediction of the ECHL absorbing the top CHL teams over the next several years holds true, the Wild eventually picking up the Rapid City Rush as their ECHL affiliate would make for at least a somewhat convenient prospect advancement avenue from western South Dakota for AA, eastern South Dakota for AAA, and then Minnesota for the bigs.

 

[rafterman]

Russo has been saying for a few days that it's Des Moines, and he's about as plugged in to the Wild as anyone can be. He's not one to throw stuff like this out there if he's not sure about it, and he hasn't been using qualifiers like 'most likely, probable, possible' when talking about it. He's sure...

 

[PCSPounder]

The teams with the bigger arenas didn't croak because of the arenas, they croaked because of the owners...

...The Wolves lose money but not because of the arena. They lose money because they employ twice or more than most any other team.

Most of the people are employed BECAUSE of the size of the arena. That factors into the cost of operations.

If I buy your owner comment, it's only because they either really pull something off, or they're smarter about their arena. No smart- or even normal- owner goes into his own pockets to cover costs. I doubt Don Levin is doing that, he's doing good as a walkup business... but media in Chicago isn't cheap. The Wolves started when there were 57 TV channels (and nothing on) instead of 500 (and still nothing on), so there's been time for word-of-mouth and brand recognition. If Levin tried to start the Wolves today, he'd really be swimming upstream by my reckoning.

This is a little trickier than simply "build big or small," and while I'm bringing up Binghamton, the other side of the story matters. When your BASE crowd is about 8,000, you really should be in an arena about that size. My guess is that Binghamton is small for the A. It's possible we'd take a range of building capacities from, say, Scranton to Providence and conclude that most of these teams (most, not all) have it good. Of course, 10,000 in a market like Grand Rapids (metro pop 1 million) is much different than 10,000 in a market like Peoria (metro pop 400K). The building does have to reflect the city (an ECHL comparison of woe... Greenville SC); it also doesn't hurt to have easy transportation. Rosemont does have some benefits in this equation despite the building size.

So... Sioux Falls? That's an interesting development. They build to only 7,500 and they might be alright. Maybe.

 

[Tommy Hawk]

Most of the people are employed BECAUSE of the size of the arena. That factors into the cost of operations.

If I buy your owner comment, it's only because they either really pull something off, or they're smarter about their arena. No smart- or even normal- owner goes into his own pockets to cover costs. I doubt Don Levin is doing that, he's doing good as a walkup business... but media in Chicago isn't cheap. The Wolves started when there were 57 TV channels (and nothing on) instead of 500 (and still nothing on), so there's been time for word-of-mouth and brand recognition. If Levin tried to start the Wolves today, he'd really be swimming upstream by my reckoning.

This is a little trickier than simply "build big or small," and while I'm bringing up Binghamton, the other side of the story matters. When your BASE crowd is about 8,000, you really should be in an arena about that size. My guess is that Binghamton is small for the A. It's possible we'd take a range of building capacities from, say, Scranton to Providence and conclude that most of these teams (most, not all) have it good. Of course, 10,000 in a market like Grand Rapids (metro pop 1 million) is much different than 10,000 in a market like Peoria (metro pop 400K). The building does have to reflect the city (an ECHL comparison of woe... Greenville SC); it also doesn't hurt to have easy transportation. Rosemont does have some benefits in this equation despite the building size.

So... Sioux Falls? That's an interesting development. They build to only 7,500 and they might be alright. Maybe.

Then explain why the Wolves staff is twice that of Houston, Milwaukee, etc. Levin does reach into his own pocket to pay for losses as does the owner of any of the other 29 AHL teams and the 30 NHL teams. They are called "cash calls".

The Wolves are a reflection of their owner who is similar to Mark Cuban in being not only an owner but a fan. It just helps he has tons of money and I think has the market cornered on rolling papers.

 

[aparch]

Then explain why the Wolves staff is twice that of Houston, Milwaukee, etc. Levin does reach into his own pocket to pay for losses as does the owner of any of the other 29 AHL teams and the 30 NHL teams. They are called "cash calls".

The Wolves are a reflection of their owner who is similar to Mark Cuban in being not only an owner but a fan. It just helps he has tons of money and I think has the market cornered on rolling papers.

Exactly. And, like any good businessman, Levin can use the Wolves losses to offset his other companies profits, which helps lower his tax rate. Simple business; the Wirtz's are the posterboys for that process.

It's pretty obvious PCSPounder isn't familiar with the Wolves or business operations for that matter.

 

[PCSPounder]

I'll be honest in that I'm a bit more familiar with other sports.

If cash calls are a frequent thing in hockey, I can see why the sport doesn't get better quality owners.

 

[Tommy Hawk]

I'll be honest in that I'm a bit more familiar with other sports.

If cash calls are a frequent thing in hockey, I can see why the sport doesn't get better quality owners.

More prevalent in minor league than the NHL but bigger calls in the NHL if the team is owned by a partnership. See Phoenix saga for fun reading. Or the NJ Devils.

 

[Aero 75]

Interesting article from one of the Aeros in-state rivals about the relocation. Increased travel costs for the Rampage and Stars, as the short 200 mile trip will be replaced by a flight to another city. Comments about the possibility of interest in Houston from an NHL team (not likely), and why alternate Houston area arenas won't work.

http://blog.mysanantonio.com/rampage/2013/04/houston-do-we-have-a-hockey-problem/

 

[adsfan]

I'll be honest in that I'm a bit more familiar with other sports.

If cash calls are a frequent thing in hockey, I can see why the sport doesn't get better quality owners.

Lloyd Pettit once said that the Milwaukee Admirals never made money. It was a few years after they had 3 seasons in a row of 9000+ attendance. He and Jane gave the $91 million for the Bradley Center. (Jane was a Bradley)

 

[Aero 75]

One final insult by the Houston Rockets for the Aeros final regular season game ever at Toyota Center, which attracted 13,500 fans.

http://thethirdintermission.blogspot.com/2013/04/were-you-stuck-in-this-line-last-night.html

Houston will now be without hockey for a long time until a new, hockey specific arena is built. I'm sure Les will do his best to ensure that doesn't happen, since he thinks if there is competition for the Rockets, no one will go to their games (like this past Friday night).

Guess I'll have to hit the road next season to see any professional hockey.

 

[Shootmaster_44]

It is. All I could find in 5 minutes.

http://en.wikipedia.org/wiki/2011–12_NBA_Development_League_season

http://www.nba.com/dleague/siouxfalls/alltime_home_attendance.html

Highest average - 4,817
Lowest average I *bleep* you not - 218

Got 3 teams in the over 4,000, 2 under 1,000, and the rest(11 teams) hovering in between 2,000 and 3,000.

I'm assuming the lowest average is the LA D-Fenders. They play at the Lakers' practice facility (also the Kings' practice facility), the Toyota Sports Center. Based on the seating chart on their website, it looks like fixed seating capacity is 284 and then there are the Prime Time Tables and VIP seating areas. So 218 is pretty good for a team nobody knew existed. I mean they used to play in the afternoon at Staples Center and the games I don't believe were even open to the public.

http://www.nba.com/dleague/losangeles/media/dfenders1213seatingmap.jpg

I haven't really been following the Houston move, but if Houston is out why go back to an old market? It seems like the AHL is bent on recycling markets. Sometimes they have been successful like in St. John's, but sometimes not so much Omaha jumps to mind. Is there a particular reason the AHL keeps pushing old markets?

At least Sioux Falls has popped up this time, which is a new market for the AHL. Does the AHL keep a hands off approach to the lower level markets? I haven't followed the ECHL Reading Royals in awhile, but that market seems to be prime for an AHL team. The only factor I can see impeding this is that the Royals are partially owned by AEG, the parent company of the Kings, which owns the Manchester Monarchs. Some leagues allow multiple teams to be owned by the same owner (the ECHL does as AEG also owns the Ontario Reign), but I'm guessing that the AHL does not?

Also, if the Wild own most of the Aeros, I'm surprised they haven't thought of moving them to Minnesota? With how popular hockey is in general there, you'd think an AHL would be a hit. Just across the stateline in North Dakota, there is a basically brand new arena in Fargo, the Scheels Arena, that seats 5,000 for hockey. Seems like a market that would do very well for hockey. There currently is a USHL team in Fargo, that the Wild would have to work around but I figure it would be successful.

Plus being the Baby Wild would sell much better in Minnesota (or might as well be Minnesota) than in Iowa or South Dakota I would think. Fargo even has an airport with direct connection to Minneapolis, so callups would be a breeze. It is even a 3 and a half hour drive from Fargo to Minneapolis.

It just seems like the AHL is fixated on certain markets. I've never quite figured out why that is. Also, if many of the Western Conference teams are thinking of moving teams out West, this might be an opportunity for the AHL to start gaining traction in the West. You'd think the AHL would want to start finding markets in Montana, Idaho, Wyoming etc. for the NHL clubs who want to bring their teams West. Seems like a no-brainer for the Wild to help the AHL out by doing this. I'm assuming the Aeros are much like the Marlies in that turning a profit isn't a huge priority and instead it is development.

 

[PCSPounder]

The facepalm cometh...

You'd think the AHL would want to start finding markets in Montana, Idaho, Wyoming...

Boise, sure, they've thought about that there, the market might still be growing like gangbusters (I have my doubts), but they're almost perfectly situated for ECHL right now. If the AHL gets back to West Valley (Salt Lake), we'll talk.

If your goal is to attract cattle for fans, Montana and Wyoming are your places.

Wyoming just doesn't have the population, and half of what is there is fairly close to Fort Collins and Denver. If the CHL somehow survives, Cheyenne might be an interesting option, but someone has to build an arena. There are rumors around Casper, but that place would have the smallest AHL building. I believe we're talking a metro population of no more than 75,000 (if that), so it's a really bad AHL idea for that far out west.

Montana- really only one option, Billings, the only market over 100,000 population in either Montana or Wyoming (150,000 metro). Billings had a team in the WHL, but not for long. They also played in the last year of the 60s-80s CHL. The Yellowstone Metra might actually be too big for the market (capacity 9,000 for hockey), certainly too big for NorPac or AWHL (which they've tried before retreating to a 550-seat rink). More importantly, I think Alaska Airlines and a "not-really-cut-rate" local airline flies in and out of Billings, so lots of teams are going to get familiar with Portland and Seattle just to get there. It's notoriously expensive just for those trips. Therefore, I believe this is a non-starter.

 

[royals119]

I haven't followed the ECHL Reading Royals in awhile, but that market seems to be prime for an AHL team. The only factor I can see impeding this is that the Royals are partially owned by AEG, the parent company of the Kings, which owns the Manchester Monarchs. Some leagues allow multiple teams to be owned by the same owner (the ECHL does as AEG also owns the Ontario Reign), but I'm guessing that the AHL does not?

.

One issue is the very close proximity of Hershey and Allentown. I would think both teams would have to approve a competitor that close. Good for travel, but might eat into attendance (or might help, with visiting fans in head to head games). Both are within an hour drive of Reading.

AEG sold their interest in the Royals last season. The team is now owned by SMG and the Berks County Arena Authority (the quasi-government entity that "owns" the arena and a theater and gets income from hotel taxes to cover shortfalls and pay the construction bonds. There wouldn't be an ownership conflict, but those two entities would have to agree to sell their ECHL franchise and buy an AHL one, or agree to sell the Royals and allow someone else to operate an AHL team at their building. It could happen, but I think it is unlikely.

 

[LadyStanley]

I haven't followed the ECHL Reading Royals in awhile, but that market seems to be prime for an AHL team. The only factor I can see impeding this is that the Royals are partially owned by AEG, the parent company of the Kings, which owns the Manchester Monarchs. Some leagues allow multiple teams to be owned by the same owner (the ECHL does as AEG also owns the Ontario Reign), but I'm guessing that the AHL does not?

AEG sold it's portion of Reading to the city IIRC a couple of years ago. (There's a thread on it in the ECHL forum; search is your friend.) They only own ECHL Ontario in that league.

 

[adsfan]

One final insult by the Houston Rockets for the Aeros final regular season game ever at Toyota Center, which attracted 13,500 fans.

http://thethirdintermission.blogspot.com/2013/04/were-you-stuck-in-this-line-last-night.html

Houston will now be without hockey for a long time until a new, hockey specific arena is built. I'm sure Les will do his best to ensure that doesn't happen, since he thinks if there is competition for the Rockets, no one will go to their games (like this past Friday night).

Guess I'll have to hit the road next season to see any professional hockey.

First, I would like to say that I am sorry about the Aeros leaving Houston. I hate to see anybody lose their hockey team. Drive carefully on your road trips! Good Luck.

 

[MM658]

One issue is the very close proximity of Hershey and Allentown. I would think both teams would have to approve a competitor that close. Good for travel, but might eat into attendance (or might help, with visiting fans in head to head games). Both are within an hour drive of Reading.

I was always under the impression that the AHL standard was a 50-mile territorial window. Don't know if that's driving distance or "as the crow flies," but my understanding is that every team has to approve a competitor within that 50-mile radius. Reading would be very close for Hershey, and definitely within that radius for Allentown. Don't know that Allentown would qualify for such protection yet, or not.

 

[IceCapsFanNL]

I'll throw a little information into the pot from the perspective of a St. John's fan.


I think butts in seats helps determine team profitability, but equally important is the average ticket price. The average ticket price at MileOne is between $25 and $30. This times the sellout crowds we have had so far would put the team near the top for gate revenue I think.

Similarly consessions factor into this as well. The team and city split the revenue from concessions, and prices are high.

Beer is $6, Hotdogs, fries, cokes are similarly high as well.

When I look at other teams websites they seem to have much lower ticket prices, and really cheap concessions.

Someone mentioned attendance as a percentage of capacity. I am not so sure that it is a huge factor with respwect to profitability, but it adds to the enjoyment of the games.

 

[LadyStanley]

I was always under the impression that the AHL standard was a 50-mile territorial window. Don't know if that's driving distance or "as the crow flies," but my understanding is that every team has to approve a competitor within that 50-mile radius. Reading would be very close for Hershey, and definitely within that radius for Allentown. Don't know that Allentown would qualify for such protection yet, or not.

The NHL has a 50 mile territory window. (IOW, 50 miles from city limit and any other team's 50 mile "spread" that intersects would require approval -- usually in the form of territory indemnification payment.)

I don't know that the AHL does.

Worcester and Springfield are awfully close. (Also Connecticut and Providence.)