Jackals To Become "Community Owned"
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Sports Enthusiast
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Then there's this article:
http://www.stargazette.com/story/sp...elmira-jackals-attendance-team-sale/15204179/
Yeah you can guess the point. They are banking on one huge miracle. I have a lot of doubts in this. Someone else tell me I'm right for that. Someone like CrazyEddie. Then I'd feel better about telling people what I have been that it just doesn't seem likely.
http://www.stargazette.com/story/sp...elmira-jackals-attendance-team-sale/15204179/
Yeah you can guess the point. They are banking on one huge miracle. I have a lot of doubts in this. Someone else tell me I'm right for that. Someone like CrazyEddie. Then I'd feel better about telling people what I have been that it just doesn't seem likely.
No Fun Shogun
34-38-61-10-13-15
Yeah, the Packers mention at the very beginning makes zero sense.
Best of luck to them, but not seeing how this would save the team versus single entity ownership. Sounds like they're just trying to split the losses as much as possible to make it more palatable to keep the team there.
Best of luck to them, but not seeing how this would save the team versus single entity ownership. Sounds like they're just trying to split the losses as much as possible to make it more palatable to keep the team there.
The way I see it this is a very smart business move by Freeman and Cook.
Here's why: They acquired the team by buying the mortgage on the arena and forcing Afr to also sign over the team for next to nothing when Freeman decided to foreclose.
Freeman and Cook give it a go for a season and the attendance is weak, and they may realize that the ability to turn a profit with the team under current conditions is not viable.
Freeman owns multiple businesses which I assume are profitable, so in order to make money off of the team he "donates" it to the community and is thus able to write off the full value of the team, which, including assets may be listed at 2-3 million. Keep in mind he got the arena and team in sort of a package deal and really didn't pay much for the team.
Now he can write off the donation worth $2-$3 million dollars, which probably equates to at least a million depending on his tax rate. He still keeps the arena and the deal I read last week says the arena keeps the concession profits. So essentially Freeman gains $1 million from the tax writeoff and still owns the arena.
Furthermore if the team folds because it is not financially viable due to attendance he is no longer the "bad guy" and can say that it wasn't his fault, he was being generous and gave the team away to the community.
If the team is sold by the community board then there is always the possibility of another team coming to town (junior? FHL, etc) who would have to pay to lease the arena and therefore the arena could make money off of that.
It seems to be a dollars and cents move by the ownership, and all of the money spent last season was on the arena itself, which Freeman gets to keep. The scoreboard is being paid (at least partially) by a government grant, so those infrastructure improvements still are owned by Freeman and Cook.
Not sure where this leaves the fans or on ice product, but this is how it played out as far as I can tell.
Here's why: They acquired the team by buying the mortgage on the arena and forcing Afr to also sign over the team for next to nothing when Freeman decided to foreclose.
Freeman and Cook give it a go for a season and the attendance is weak, and they may realize that the ability to turn a profit with the team under current conditions is not viable.
Freeman owns multiple businesses which I assume are profitable, so in order to make money off of the team he "donates" it to the community and is thus able to write off the full value of the team, which, including assets may be listed at 2-3 million. Keep in mind he got the arena and team in sort of a package deal and really didn't pay much for the team.
Now he can write off the donation worth $2-$3 million dollars, which probably equates to at least a million depending on his tax rate. He still keeps the arena and the deal I read last week says the arena keeps the concession profits. So essentially Freeman gains $1 million from the tax writeoff and still owns the arena.
Furthermore if the team folds because it is not financially viable due to attendance he is no longer the "bad guy" and can say that it wasn't his fault, he was being generous and gave the team away to the community.
If the team is sold by the community board then there is always the possibility of another team coming to town (junior? FHL, etc) who would have to pay to lease the arena and therefore the arena could make money off of that.
It seems to be a dollars and cents move by the ownership, and all of the money spent last season was on the arena itself, which Freeman gets to keep. The scoreboard is being paid (at least partially) by a government grant, so those infrastructure improvements still are owned by Freeman and Cook.
Not sure where this leaves the fans or on ice product, but this is how it played out as far as I can tell.
Bingo. Rather than losing money year after year, the team is "donated" for a one time tax write-off.
Sports Enthusiast
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The word ownership here is funny. There's nothing financial involved. I don't know how to call it the owners now still pay for everything and all.
Sports Enthusiast
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I get that and all but they still have to pay for losses if there are any. There is no cash transaction here so I don't understand how they won't lose money.
Avoiding paying a million dollars in taxes by making a donation is the same as receiving a million dollars cash.
Sports Enthusiast
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I guess business wise it works if you want more business involvement. From that standpoint its good.
I still either way see a red flag here. A 3 year plan that there can't be a whole deficit? Then they talk about if the team goes away that the place goes dark? Its obvious they are banking too much on the team. They were fortunate to get the team. There's several things Afr probably could have done if he wanted. It wasn't much different then John Spano and the Islanders back in 1997.
The arena and team are a separate entity. The team pays rent(I'm not sure how much)
Minor league sports aren't a money maker usually. I could have told them that. I think they got in over their heads a bit in the sports side. Expecting too much. There's a lot of debate in the Jackals early years of profitability. Afr owned both. He basically pocketed money and didn't pay bills. The team at foreclosure time had better liquid assets. Attendance was solid for a few years. You couldn't get a seat on weekends. They averaged 2600 something last year. Want 1,000 more? That's basically asking for a sellout every game. In a small arena that's probably what you need. I wish they would explore other teams. Indoor soccer or lacrosse. Football.
I'm not sure FHL will work. Its got some excitement but the league itself is a cluster. Its run very poorly. I'm not sure it will last long term.
The "donation" is a way for the owners to get out now, make some cash with the tax writeoff, and not been seen as the guys who caused the team to fold if that happens, as they would no longer own the team. If by some chance the team succeeds under "community ownership" then Freeman and Cook still made their money off of the writeoff for the donation and still own the arena.
If it does not work they are now separated from the team and would not be the scapegoat if it fails. They basically got the team for free as part of the arena foreclosure, so the amount they are ahead with the writeoff is all profit.
Sports Enthusiast
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This is a fancy way of using a get out of jail free card. Everybody now knows where things stand and now its solely on the shoulders of the county in attendance.
I always laugh though when things like this and Johnstown come up. People claim they'd buy a share but you weren't going to games. That doesn't make sense to me. Early indications this off season had been quire a few people weren't renewing their season tickets. I know you said you weren't coming back. Last years team was boring. They aren't returning much and any of the guys people knew of like Bellamy, Borbeau, Pietrus and Demkov aren't returning. On paper the team thus far looks young. Couple that with an inexperienced pro coach. Could be a lot of growing pains.
All in all unlike most I have honest doubts that this whole plan will actually work. Its not that I don't want it to. Its just I understand its a long shot.
CrazyEddie20
Hey RuZZia - Cut Your Losses and Go Home.
If you have serious doubts about this, you are correct.
First of all, comparing an ECHL team in a small town in central New York to an NFL franchise with 95 years of history is ludicrous. People in Buffalo and Rochester don't even know the Jackals exist (for the most part, outside of hardcore hockey fans) but people across the COUNTRY know about the Packers. When the Packers make a public offering of "stock" (and I use quotes because the stock you get is illiquid and non-transferable, which makes it not really stock at all), plenty of people that are not Packers fans buy it just for the novelty of owning stock in an NFL team. You aren't going to have random folks in Arkansas buying "stock" in a Class-AA hockey team they've never heard of in a city they've never visited in a state halfway across the county. Of course, they said they aren't going to sell stock, so who knows where the capital to actually run the team will come from...
The owners who are "donating" the team can write the donation off for the claimed value of the assets, though they'll certainly be subject to an audit. They know the team can't make money without significant changes in the business model, and even then, the Jackals would only break even.
They need to make $400,000 in new ticket revenue alone just to be close to breaking even! In a larger city, maybe. In Elmira, it'll be tough.
First of all, comparing an ECHL team in a small town in central New York to an NFL franchise with 95 years of history is ludicrous. People in Buffalo and Rochester don't even know the Jackals exist (for the most part, outside of hardcore hockey fans) but people across the COUNTRY know about the Packers. When the Packers make a public offering of "stock" (and I use quotes because the stock you get is illiquid and non-transferable, which makes it not really stock at all), plenty of people that are not Packers fans buy it just for the novelty of owning stock in an NFL team. You aren't going to have random folks in Arkansas buying "stock" in a Class-AA hockey team they've never heard of in a city they've never visited in a state halfway across the county. Of course, they said they aren't going to sell stock, so who knows where the capital to actually run the team will come from...
The owners who are "donating" the team can write the donation off for the claimed value of the assets, though they'll certainly be subject to an audit. They know the team can't make money without significant changes in the business model, and even then, the Jackals would only break even.
They need to make $400,000 in new ticket revenue alone just to be close to breaking even! In a larger city, maybe. In Elmira, it'll be tough.
Sports Enthusiast
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Ha yeah I bought into the Packers stock. I'm a fan of them though but the other thing was novelty. A friend of mine who likes the Redskins also bought in. They rarely do it. It's been done like 5 times. When they did it in 2011 it was to help pay for stadium renovations.
I'm glad you see it that way. Man were they mad when I said on their Facebook page that I was skeptic and have serious doubts. Nothing changes. Its all based on getting butts in the seats and well kinda winning. I guess this is their way of saying we can't really afford to...or don't want to take losses for a long time. Unless Terry Pegula comes in on his high horse this franchise long term is probably dead because not many out there in this part of the country have the kinda money or time willing to take losses year after year.
I'm glad you see it that way. Man were they mad when I said on their Facebook page that I was skeptic and have serious doubts. Nothing changes. Its all based on getting butts in the seats and well kinda winning. I guess this is their way of saying we can't really afford to...or don't want to take losses for a long time. Unless Terry Pegula comes in on his high horse this franchise long term is probably dead because not many out there in this part of the country have the kinda money or time willing to take losses year after year.
It paves the way for Elmira College to finally bring their hockey program downtown. If that would happen, who knows, maybe they find a way to reunite with RIT in Division I hockey.
Sports Enthusiast
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I don't think they could ever go D1. I don't think they would ever want to leave the Domes if they can help it. They pay $1 rent. That's far cheap than what IRS got to be down there at Afr land where beers are like $8 for example.
JungleJON
Registered User
- May 10, 2011
- 306
- 10
Don't think that will happen. If the owner of the Sabers wants to purchase the Jackals, he could move them to the new arena he built at Penn State. Why pay someone else for rent and not receive money from concessions.
Sports Enthusiast
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The Jackals I guess now pay rent but its no different than the Afr days. That would be tough to do. Have a D1 and ECHL team? I don't think both would work.
I dont think the team will be paying rent. Tom and Nate will still run the day to day operations of the hockey team, they just wont be paying the player salaries. That will have to be done with ticket money and advertisement money. Hockey if reading the second article correct will remain for the next three years at least. With a guarantee that there is enough money in the reserve to cover any debt the team has. After that it must break even or show a profit.
Sports Enthusiast
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I heard on WENY when they mentioned this ordeal that yes they are paying rent. They always have. Though if the same people own both I don't understand why. They are going to still pay salaries but I don't know how exactly.
If there's a debt after 3 years I assume the team goes under or for sale? Atleast reading between the lines it reads like that. I don't think anyone locally with an interest has that kinda money. Someone from outside might have an interest but no guarantee they keep it here.
Sports Enthusiast
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I thought they were now...or half anyway. I thought their county bought half the team? I'm not sure it is.
LadyStanley
Registered User
http://www.echl.com/elmira-ownership-transfer-approved-p193874
BOG approves transfer of ownership to "Chemung County Economic Development, LLC."
BOG approves transfer of ownership to "Chemung County Economic Development, LLC."
Serious doubts sums this plan up the best. When I read the articles it seemed more like this is a scheme more than a business plan - with not much hope of succeeding.
The population of Elmira works against the chance of success. Maybe they already do this, but the Jackals need to market themselves to any communities with a 45 minute drive. There must be at least 250,000 people within that radius, I'm guessing. But it's tough to get people to commit to a long drive to see ECHL hockey unless there's something entertaining on the ice to see. I've gone to a couple of Jackals games - driving from my brother's place in Wellsboro, PA - which is just short of an hour away. Not horrible insofar as the drive is concerned and the games have been entertaining. Perhaps the Sabres/Amerks affiliation will help - but bottom line is they need a good on ice product and they need to promote it effectively to get people buying seats.
The biggest problem I see in that respect is that once fans get the perception that the team is on the way out, they stop going even more - thus exacerbating the problem. They also don't like to hear that "it's on the fans to show up" - especially of the game experience is not satisfactory. That means a competitive team and great gameday experience. There's some positive movement in that regard as I read about improvements to the arena including the scoreboard and general repairs/cleanup. The purchase of the Lindenwald Haus seems like another positive as well.
I think that the best hope is that within the three year time frame, the affiliation with Elmira proves to be of value and importance in the management of organization depth and the creation of an effective and efficient pipeline between Buffalo, Rochester and Elmira. So much so that if the Elmira experiment fails, the Sabres might be willing to either outright purchase the team, keep them in Elmira and absorb the losses or arrange some sort of subsidy to cover some of the losses that the public is incurring.
The population of Elmira works against the chance of success. Maybe they already do this, but the Jackals need to market themselves to any communities with a 45 minute drive. There must be at least 250,000 people within that radius, I'm guessing. But it's tough to get people to commit to a long drive to see ECHL hockey unless there's something entertaining on the ice to see. I've gone to a couple of Jackals games - driving from my brother's place in Wellsboro, PA - which is just short of an hour away. Not horrible insofar as the drive is concerned and the games have been entertaining. Perhaps the Sabres/Amerks affiliation will help - but bottom line is they need a good on ice product and they need to promote it effectively to get people buying seats.
The biggest problem I see in that respect is that once fans get the perception that the team is on the way out, they stop going even more - thus exacerbating the problem. They also don't like to hear that "it's on the fans to show up" - especially of the game experience is not satisfactory. That means a competitive team and great gameday experience. There's some positive movement in that regard as I read about improvements to the arena including the scoreboard and general repairs/cleanup. The purchase of the Lindenwald Haus seems like another positive as well.
I think that the best hope is that within the three year time frame, the affiliation with Elmira proves to be of value and importance in the management of organization depth and the creation of an effective and efficient pipeline between Buffalo, Rochester and Elmira. So much so that if the Elmira experiment fails, the Sabres might be willing to either outright purchase the team, keep them in Elmira and absorb the losses or arrange some sort of subsidy to cover some of the losses that the public is incurring.
I was one of the fans making a 35 minute drive from PA to see the Jackals. After 8 seasons as a season ticket holder I have given it up this year for the reason in your response that I bolded. The ECHL is simply boring right now. There is no physical play at all, too much roster turnover (the Jackals average going through 50-60 players a year which equates to 3 full rosters), and no sense of the fact that on ice entertainment is important. They have taken the developmental approach too far and the ignored the fact that fans are there to see the players try to win and not just develop their skills. I could care less about the affiliation and which team is our parent club. I'm sitting on the sidelines for now. If they can ice a team that hits, hustles, chirps, drops the gloves when needed and has players that seem to actually want to be there I will return.
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