SBD/October 1, 2012/Franchises

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  • New Blues Ownership Restructures Business Operations

    Stillman views the Blues as a small- to medium-sized, "very local" company

    The departure of Blues President John Davidson “is the biggest headline in an offseason of change at Scottrade Center, but it's not the only remodeling that involves both personnel and a new business blueprint,” according to Jeremy Rutherford of the ST. LOUIS POST-DISPATCH. New Blues Owner Tom Stillman said the franchise "lost $20 million in 2011-12 despite a 109-point regular season that produced a healthy number of sellouts." He added that the team “was in need of cost-cutting measures and a narrowed focus." Stillman: “I'd say that we've largely restructured the business side of the operation. That starts from the foundation.” He added, “We see that we're not some large glitzy national or worldwide business. We see the Blues as a small- to medium-size very local company. So we need to operate on that scale." Stillman, noting the promotion of Bruce Affleck to COO in June, said, “We had to make the organization flatter, less hierarchical. ... It was a pretty bloated organization." New ownership estimates that the Blues “had been spending 50 percent more than the NHL average on non-player expenses.” Prior to the Sept. 15 lockout, the team “addressed the issue with approximately 20 layoffs.” Rutherford wrote the challenge is “increasing the Blues’ revenue base through ticket, suite and sponsorship sales.” The season-ticket renewal rate is 88%, "up from 75 percent a year ago at this time." Season-ticket revenue is 30% higher last September, but Stillman said, “We’re not there yet.” After signing deals with concessionaire Levy Restaurants and FS Midwest for TV, “the club under [former Owner Dave] Checketts took a significant portion of the money up front.” Stillman said, “We are dealing with some moves made by the previous ownership that do affect our financial situation going forward. The franchise doesn't get the benefit of that money over those (future) years. The previous ownership did some mortgaging of the future” (ST. LOUIS POST-DISPATCH, 10/1).

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  • Former Islander LaFontaine Considering Bid To Buy Team, Stay On Long Island

    Hockey HOFer Pat LaFontaine "has been contacted by some European investors about the possibility of buying the money-losing team and keeping it on Long Island," according to Kosman & Brooks of the N.Y. POST. Sources said that LaFontaine, who played for the Islanders from '83-91,  "is intrigued by the opportunity and may look to put together some sort of bid." Sources also said that Owner Charles Wang "has quietly let it be known that he is willing to sell the franchise if the price is right." However, that price is "said to be a sky-high" $300M. Wang's efforts at getting a publicly financed, $400M arena built "have been turned aside by taxpayers." Nassau County's latest effort at "keeping the team has three builders vying to be named the lead developers of the arena site." The LaFontaine-centered effort will look to keep the Islanders in Nassau, but that "may be difficult without an arena" (N.Y. POST, 10/1).

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  • A's Not Seeing Huge Box Office Bump Despite Making Unexpected Playoff Run

    A new ballpark could boost the Athletics' revenues by more than $100M annually

    The A’s can clinch their first postseason appearance in six years tonight, but despite the on-field success this season the team ranks 27th in attendance, only “about 2,000 better than last season when they had a losing record,” according to CNBC’s Brian Shactman. A’s Owner Lew Wolff said, “We’ve had a little pickup in fan attendance, but pretty much on budget that we had assumed this year. ... It’s disappointing. It’s expected. That’s more my fault than the fans’ fault because I’ve got to provide an environment that generates revenue and is pleasant to come to.” Shactman noted it “begs the question whether they might have trouble selling out a playoff game.” Wolff replied, “Do I worry about it? No. Do I expect that we won’t? Possibly.” Shactman noted the A’s are “desperate” for a new ballpark because it would mean a “huge increase in revenue.” Wolff noted a new ballpark could mean $100M more in revenue annually. Shactman: “That would take Oakland from a small-budget, break-even franchise to a larger-budget profitable franchise. To Wolff, that probably means leaving Oakland” (“CNBC Sports Biz: Game On!,” NBC Sports Network, 9/28). ESPN’s Howard Bryant noted the A's, which have the lowest payroll in MLB at $46M, are 91-68, while the Red Sox and their $170M payroll are 69-90. Bryant: "I thought Bud Selig said the A’s couldn’t compete without a new stadium?” (“The Sports Reporters,” ESPN2, 9/30).

    STILL HUNG UP ON BALLPARK: The WALL STREET JOURNAL’s Brian Costa noted the only thing that is “not going Oakland’s way in 2012 is its stadium plan.” The A’s “remain mired in a dispute” with the Giants over territorial rights, and the issue “remains unresolved” despite Selig putting together a committee to look into the situation three-and-a-half years ago. Wolff said, “I’m probably more patient than most people would be. I’m a deal-maker. I don’t like litigation. But my patience is running out a little bit.” Wolff estimated that it would take “at least three years to design and construct” a new ballpark from the time it was approved. He said that ’16 “is the soonest it could open” (WALL STREET JOURNAL, 9/29).

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