SBJ/April 22-28, 2013/Franchises

Biz and hockey sides aligning for Blackhawks



Scotty Bowman, the most successful coach in NHL history, never would have gone for it while leading the Montreal Canadiens to four consecutive Stanley Cups in the late 1970s.

When Bowman, 79, now a consultant with the Chicago Blackhawks, participates in scouting meetings run by his son, Stan, the club’s general manager, a frequent attendee is Jay Blunk, the Blackhawks’ senior vice president of business operations.

A business executive in a hockey meeting? In the tradition-rich environment of the NHL, this is practically unheard of —  except in Chicago.

This is the Blackhawks’ way.

It helps to win, and the Blackhawks have, but staff communication is also credited for the franchise’s success.
Photo by: GETTY IMAGES
“It’s a unified, healthy culture,” said Blackhawks President John McDonough.

It’s also a culture that, while not fully unique among North American sports franchises, is new territory for the NHL.

“There’s still a lot of resistance from the traditionalists in the NHL about opening doors between the business and hockey offices,” said former St. Louis Blues CEO and MSG Network President Michael McCarthy, now co-chairman of Manhattan Place Entertainment, a New York-based production and creative services company. “I applaud the Blackhawks for taking it further than any team has in the NHL.”

“Hockey teams just don’t do what the Blackhawks are doing, at that high a level of transparency among the staff,” said NBC NHL analyst Pierre McGuire, a former NHL assistant coach and scout, including under Scotty Bowman with Stanley Cup-winning teams in Pittsburgh in 1991 and 1992. “Hockey people are fearful of news leaks.”

For the Blackhawks, it’s happening as the team is performing at a historic level on the ice. The combination has the club’s TV, online and ticket-sales metrics all shooting high as well.



This era of transparency for the Blackhawks began in 2007, when Rocky Wirtz took over as chairman of the franchise following the death of his father, Bill, who had owned and operated the Blackhawks as club president for 41 years.

“Dad left us on the 26th of September, 2007,” said Wirtz, who beyond the Blackhawks is president of the Chicago-based Wirtz Corp., which owns real estate, beverage, insurance and financial companies. “But well before I became chairman, I’d seen the silos at the Blackhawks. Unless you were the owner, you couldn’t get near the people in the hockey department. I felt that had to change.

“At the Wirtz Corp., we’ve long had an internal theme. ‘One Wirtz,’ meaning we all work together and share information for the good of the company. Why shouldn’t it be the same with the Blackhawks? So at the team, our public slogan is ‘One Goal.’ It was before we won the Cup [in 2010], and it still is today.”

At Rocky Wirtz’s urging, McDonough instituted the concept when the owner hired him in late 2007, after McDonough had spent 24 years as an executive with the Chicago Cubs. As president of the Cubs from October 2006 to November 2007, McDonough had a more traditional structure in place at the MLB club.

“We couldn’t do it at the Cubs,” McDonough said. “Everyone has their ways of doing things. You need ownership’s support, and Rocky was a big believer in it.”

Before Wirtz and McDonough took over, the Blackhawks were one of the worst teams in the NHL on the ice, and attendance and other business metrics matched. Turnstile counts at the United Center were as low as 5,000 for some games. Fast-forward to today, and times have changed for the franchise in virtually all regards: on the ice and on the balance sheet (see inset story).

Rocky Wirtz became chairman in 2007 and lifted the Stanley Cup in 2010.
Photo by: GETTY IMAGES
Blackhawks’

business stats

show strength


   The implementation of Chicago’s open operational culture is coinciding with a period of strong on-ice play for the Blackhawks.
   Since Chicago’s 2010 Stanley Cup win, the Blackhawks have continued to be among the league’s best each season — including their historic 21-0-3 mark to start this year. That’s played a key role in the business gains that have been seen throughout the franchise.
   The Blackhawks have sold out every home game to date this season and were on pace to sell out their home season finale on Friday against Calgary, as well. That would extend their sellout streak at United Center to 213 games, dating back to the 2007-08 season, team President John McDonough’s first with the club.      
   Chicago has led the NHL in attendance each of the previous four seasons and leads again this season with an average of 21,610 fans per game.
   Full-season-ticket sales are capped at 14,000 to allow for partial-plan, over-the-counter and group sales.
   At the team’s 2013 home opener on Jan. 22, players entered the arena red carpet-style, surrounded by the fans. The Blackhawks’ March 3 game in Detroit on NBC generated a 9.7 rating in Chicago, the team’s highest since the 2009 NHL Winter Classic played at Wrigley Field. Locally, Blackhawks broadcasts are averaging a 5.7 household rating, up from a 3.1 average last season. And since the beginning of the season, the team’s Twitter feed has added more than 25,000 followers and is now approaching 300,000 total — fifth in the NHL behind Montreal, Vancouver, Pittsburgh and Boston.
— Christopher Botta
The system in place in Chicago was particularly beneficial in this shortened season.

“There’s no doubt in my mind that having our hockey office work hand-in-hand with the rest of the staff, and the entire group having a strong working relationship with our players, enabled us to be efficient and successful when the lockout ended,” Wirtz said.

With the Blackhawks, there are no boundaries. When the team’s advertising agency, Ogilvy, asked for direction in devising the Blackhawks’ marketing campaign for this season, head coach Joel Quenneville met with the agency to share his vision for the club’s style of play and lend insight into some of the team’s top players.

Stan Bowman joins Blunk at pitch meetings to prospective sponsors, and the general manager has dinner with current sponsors before several games each season. Additionally, top sponsors travel with the club on its chartered aircraft for all of the team’s road trips. The norm with most NHL teams is one or two such trips, maybe as many as a half-dozen in a full season, but certainly not every trip.

Terry Jenkins, president and CEO, USA, at BMO Private Bank, which has sponsored the Blackhawks since the season before Rocky Wirtz became chairman, said the increased opportunities to take clients on team road trips have been invaluable to his company.

“Our clients are affluent, so going to sporting events near home or far away is not a problem for them,” Jenkins said. “But actually traveling with the team — going on the charter, riding on the bus with the players, having dinner with Coach Quenneville — now that’s a big deal to them. The Blackhawks give my company, and our clients, an experience that’s beyond belief.”

To keep all 80 of the team’s staffers informed, “Blackhawks Daily,” an in-house newsletter, arrives via email at 9 a.m. every weekday, providing updates on everything from team practice times and transactions to a list of groups attending the next game. The team has a mentoring program in which top executives, including Stan Bowman and Blunk, take younger staffers to lunch and meet with them regularly. Purposefully, neither of Bowman’s protégées is on the hockey staff.



Elements of what the Blackhawks are doing can be seen across sports. Several NBA franchises in recent years have moved to a more open organizational structure. Among those clubs are the Indiana Pacers, Minnesota Timberwolves and Charlotte Bobcats.

Orlando Magic executives also have taken steps to combine the business and basketball side of the franchise. Every other Tuesday, Magic General
Manager Rob Hennigan is part of the team’s top business management meeting with team CEO Alex Martins and other vice president-level executives. On each opposite Tuesday, the team’s director of basketball operations sits in on the Magic business department head meetings.

Martins also routinely participates in scouting and other basketball operations strategy meetings.

Each offseason, both the basketball and business operations executives jointly attend budget presentations from each department, where each respective budget is discussed and debated.

“Whether it is a senior leadership meeting or an operational meeting, there is a continual process where everyone is involved,” Martins said.

In baseball, the Detroit Tigers may not match the Blackhawks’ level of transparency, but having David Dombrowski as president, CEO and general manager makes the flow of information easier.

All for one (from left): assistant general manager Norm McIver, executive vice president Jay Blunk, vice president and general manager Stan Bowman, president and CEO John McDonough, vice president and assistant to the president Al MacIsaac
Photo by: CHICAGO BLACKHAWKS
“It’s extremely important for the business and baseball side of the organization to work together,” Dombrowski said. “The communication that makes this happen allows you to run a more efficient operation with everyone working together.”

But in the NHL, the notion of the club president’s right-hand executive attending scouting meetings or the coach visiting the ad agency would meet the same reaction those older scouts with the Oakland A’s had for Billy Beane’s “Moneyball” methods. Among NHL clubs, there is communication but scant cross-over between hockey and business departments. Many exist almost as two separate entities.

In New Jersey, for example, general manager Lou Lamoriello runs the Devils and senior vice president Richard Krezwick runs Devils Arena Entertainment. The sides communicate frequently, but Krezwick’s executives are not in Lamoriello’s hockey meetings. Each group has its own public relations staff.

“There’s still a sanctity about the hockey operations process,” said McCarthy, who left the Blues last May after a change in ownership. “In St. Louis, we went close to the edge of transparency between departments but didn’t take it as far as the Blackhawks. Our business people weren’t in scouting meetings.” McCarthy let out a slight laugh. “We weren’t ready to cross that line,” he said.

NHL Chief Operating Officer John Collins, a former president of the Cleveland Browns, visited with the Blackhawks earlier this year and came away impressed.

“They’ve fully integrated the management team — business and hockey,” Collins said, via email. “There are lots of ways to do it, so one isn’t necessarily better than another. But when a club like the Blackhawks establishes winning as its most important objective and executes every decision — big and small, hockey and business — with that goal front and center, the results can be impressive.”

When the Blackhawks make a roster move, McDonough wants to be educated on the reasons why that move is being made so he can share the explanation with the staff if Bowman is unavailable. This way, everyone is on message when speaking with media, sponsors and fans at crucial moments.

“I’m a big believer in it,” said former Calgary Flames General Manager Craig Button, now an NHL analyst for TSN and the NHL Network. “The business has become so big, and with social media now, there are so many implications if everyone is not on board and pulling in the same direction.”

The daily in-house email newsletter keeps team staffers in the loop.
Every Monday morning features a meeting of the Blackhawks’ top executives: McDonough, Bowman and Blunk along with Al MacIsaac, vice president and assistant to the president; Chris Werner, ticket operations vice president; Norm MacIver, assistant general manager; and Marie Sutera, senior director of human resources. A larger group, all the department heads — about 15 employees total — meets each Thursday morning. Once a month, the entire staff in Chicago, including Wirtz, meets to share updates and ideas.

Stan Bowman’s transition to this approach was made easier by having degrees in finance and computer applications from Notre Dame and spending the first five years of his career in business before joining the Blackhawks in 2000.“I know it would be strange for many of my peers, but it wasn’t difficult to buy [in],” said Bowman, who was assistant general manager in Chicago under Dale Tallon before his promotion in 2009. “Around the time I was named GM, John and Rocky met with me and talked about our philosophy. Their main point was, ‘The way to be profitable is not to cut costs but to drive revenue.’ So we work together. We do things for a reason. We do a lot of research. We explain our approach to each other. It’s working.”

McDonough implemented the culture change immediately upon joining the Blackhawks, but it took two full years — and some firings and new hires — before it was running smoothly.

“John set the direction as soon as he got here, but not everyone ‘got it,’ and they aren’t here anymore,” said Blackhawks senior executive director of marketing Pete Hassen, a former executive with the Buffalo Sabres and Delaware North, the parent company of the Boston Bruins. “John had to make some tough decisions. When I came here in 2005, there was no access to ownership, and everyone was in silos.”

Since Rocky Wirtz became team chairman, the staff has tripled in size. McDonough brought in Sutera to run the newly created human resources department, completely revamped the public relations staff and hired a new finance director, T.J. Skattum.

Fans are buying in, too; the Blackhawks were on pace to sell out for the season.
Photo by: GETTY IMAGES
“Getting everyone on board went about as well as I could have hoped, but it didn’t happen overnight,” McDonough said.

The club president is also a realist.

“It helps to win,” McDonough said. “I’ll be the first to tell you that the best marketing idea in team sports is winning.”

But in addition to the victories, staff communication is credited for the franchise’s success. By including the hockey operations and coaching staffs in marketing decision-making, events like the annual Blackhawks Convention during the summer and the in-season party for season-ticket holders at Chicago’s Navy Pier get the enthusiastic endorsement of the hockey side, including the players.

“It’s pretty simple, if you think about it,” Stan Bowman said. “We’re a team that’s able to operate near the salary cap ceiling because we draw sellout crowds every night. It’s the fans and sponsors that make this whole thing go. My staff and our coaches and players are well aware of this. It drives us to want to work with the business side so we can stay a cap team.”



In the NHL, the public relations director is the rare conduit between the general manager and the office staff. The PR person works for the GM — announcing player transactions, for example — but is peers with the business staff. It’s not uncommon for a ticket-sales representative, in markets around the league, to attempt to gain a crumb of insight from the PR person about the GM’s plans to improve the team before the trade deadline or the annual free agency period. Such efforts, usually, are unsuccessful.

There’s no need for that additional work in Chicago. The privileged information is shared across the staff directory.

“Before the trade deadline, our staff will have an idea of Stan’s course of action,” McDonough said last month, ahead of the April 3 deadline.

That’s the case even in today’s age of social media, when — as McGuire stated — most teams would be worried about leaks.

“There has to be trust,” said Blunk, who worked with McDonough for 22 years at the Cubs before joining him at the Blackhawks. “As a staffer, whether you’re in ticket sales or customer service or sponsorships, having information is an invaluable tool. You don’t want to give it up.”

Said McDonough, “In five and a half years of doing it this way, there hasn’t been one betrayal of confidences. My feeling is that you can’t approach this in a paranoid state. It goes back to the hiring process. Candidates for jobs here are told that whatever you learn about the hockey team stays here. Everybody has bought in to the philosophy.”

Even Scotty Bowman, the iconic coach.

“My father has always progressed with the years,” Stan Bowman said. “He was a different coach when he had his last Stanley Cup team in Detroit 10 years ago than he was with the Canadiens 40 years ago, when he ruled with an iron fist. Times change. He understands what we’re doing here. He’s also seen that we’ve been successful.”

Staff writer John Lombardo contributed to this report.



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