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Owning a team ‘a departure from conventional wisdom’
Published November 24, 2008
Last December, Craig Leipold sold the Nashville Predators, the NHL franchise he had owned since its inception in 1997. Four months later, the NHL board of governors approved the sale of the Minnesota Wild by Bob Naegele to Leipold, whose Minnesota Sports & Entertainment holdings also include the Wild’s AHL affiliate, the Houston Aeros, as well as MLL’s Minnesota Swarm and the management of Xcel Energy Center and the Saint Paul RiverCentre.
A passionate fan and a proponent of a more fan-accessible game, Leipold served on the NHL’s executive committee and helped negotiate the CBA with the NHL Players’ Association in 2005. Leipold spoke with SportsBusiness Journal New York bureau chief Jerry Kavanagh earlier this month.
Favorite vacation spot: Exuma
Favorite music: The Beatles
Favorite author: Vince Flynn
Favorite quote: “The buck stops here.”
Favorite hockey movie: “Mystery, Alaska”
Favorite blogs/Web sites: Twitter and minnesotawild.com
Favorite athlete: Tiger Woods
Pet peeve: People who don’t give you 110 percent
Collections: Sports memorabilia. I have a signed Babe Ruth baseball. My most treasured piece … the first game the Nashville Predators won, the team gave me the puck.
What do you know now that would have been helpful to you earlier in your career?
LEIPOLD: To listen more to people. To not overreact to situations. And to not be afraid to ask questions. As I look back on my career, there are things I’d love to have over and I think to myself, “Why did I do that?” And usually it was because either I wasn’t listening or I wasn’t asking the right questions.
Where do you depart from conventional wisdom?
LEIPOLD: Owning a sports franchise is a departure from conventional wisdom. It’s a different business, a different business model, although you use the same principles of management. That is, you get the best people that you possibly can and you let them do their jobs. But ultimately the end game is different: You’re trying to win something, and the value of the asset is getting larger and larger even though your losses may continue. That’s not a normal business model.
According to Forbes magazine, last season was the NHL’s most successful in 10 years. Forbes found that the average NHL team value rose 10 percent during the past year and that the Wild’s value increased 21 percent. To what do you attribute that?
LEIPOLD: From a league standpoint, I believe that when we came out of the lockout year, we had a product that our fans wanted to see. It was a more exciting product; it was faster hockey. From a franchise standpoint, we now have 327 consecutive sellouts [through Nov. 13]. This is a hockey market. One of the great things this franchise has done is that it has really nurtured and protected the brand. In this market, the Wild represents more than just hockey. It’s a culture, a way of life.
NHL attendance through Nov. 10 is up 1.2 percent and the Wild’s attendance remains at 102.8 percent capacity. What effect has the economy had on the Wild?
LEIPOLD: Up to this point, the economy hasn’t had a large effect on us. We have 7,000 people waiting to buy season tickets. When we went out with our season-ticket drive back in March and April, that’s when the economy was doing fine. We renewed 96 percent of all of our season tickets. Our season-ticket base sits at 16,500 right now, so the economy has not had a big effect so far on our business. We have a number of suites, 20 of them, which come up for renewal next season. We are now developing a strategy so that we go out and are prepared for issues that are related to the economy.
NHL Commissioner Gary Bettman appeared on Fox Business in October. He said, “Everybody is keeping a close eye [on the economy] because we don’t think any business or industry will be immune. Having said that … we have not yet felt the effects.” But he also said, “We know that if this economic situation continues, [if] it gets worse, we are probably going to be affected like everybody else.”
LEIPOLD: Yeah, I think that’s true. I talked to Gary this week. He’s calling all the owners and asking the questions: “What’s happening with your market? What are you seeing?” Right now, if we freeze it, our business is just great this year. But we also are seeing things about some of the issues that our sponsors are experiencing, and we’re concerned about the future. Fortunately for us, we’ve been fine in the present.
Looking ahead, are you optimistic about the business health of the Wild in this economy?
LEIPOLD: Am I optimistic about this game and the future of hockey and the people in New York who are managing the game for us? You bet I am. There’s tremendous amount of upside for this franchise and for the league. Am I optimistic in this business environment? You know, this downturn has happened so quickly and so dramatically, it’s really hard to respond. If we’ve reached the bottom, we’re going to be fine and we’re going to get out of this thing pretty quickly. If we’re not at the bottom yet — and we don’t know whether we are as an economy — then I will tell you that I’m very concerned about what next year and the following year will look like, as I think any business person would be concerned.
As far as advertising and sponsorships, have you seen any pullback?
LEIPOLD: There have been sponsors that haven’t renewed, but we’ve picked up a lot of new sponsors. As I’ve said, we really locked in our sponsors before June. So, we’re pretty well locked and loaded for this year, although there are some opportunities that are still out there. Our concern is for next season, and we’ll start working on that in December-January-February. We’re just now starting to look at what next year will look like, and obviously that gives everybody in sponsorships and ticket sales a little bit of heartburn.
What is the NHL’s biggest challenge?
LEIPOLD: To be able to project our game on television and project the kind of excitement and speed and physical aspects of our game that everyone sees when they’re in the arena. I believe that high-definition [TV] is going to help our game, probably more than any other game, because of the size of the TV, the sharpness — you can see the puck now on the ice.
Do you have any suggestions for the president-elect?
LEIPOLD: I’d like to get him out to some hockey games. I understand he likes basketball, but let’s get him out to some of the Capitals games and see if he can’t be as excited about hockey as he is about basketball.
Speaking of basketball, you first tried to buy the Milwaukee Bucks and then the Sacramento Kings before buying the NHL expansion Nashville Predators in 1997. Why the shift from NBA to NHL?
LEIPOLD: It was a time I was kind of kicking tires and checking what was available in the market. And at that time, I knew basketball better than I knew hockey. As I wanted to get into sports business, I gravitated toward basketball. I didn’t realize that those opportunities just weren’t out there at the time and that hockey was. I’m just thrilled to death that, as it turned out, it was hockey. I think it’s a strong sport. We’ve got the new CBA that protects all of our franchises.
You have pushed for a more fan-friendly NHL, including the rules changes to promote a more entertaining game and increased fan access. How can the game be improved for the fan in the arena and for the fan at home?
LEIPOLD: We need to do a better job of getting our players recognized and known in the community and involved. The players are willing to do this. And when a fan has an interaction with a player, you’ve got yourself a fan for life. Even though we’re a team sport, we have to continue to profile our individual players. We’ve tried to do that in the last couple of years.
Are there any NHL franchises, or other sports franchises, whose business practices or business model you admire?
LEIPOLD: Anyone that has won the Stanley Cup in the last five years is a franchise I admire. It’s a very hard thing to do.