Menu
Franchises

New Bills owners’ passionate vision of One Buffalo

Near the end of a two-hour walking tour through the innards of the Buffalo Bills’ game-day operation, the team’s new co-owner made her way through an end zone tunnel and onto the field, where the Bills and Kansas City Chiefs were warming up as kickoff approached.

She was in daylight for less time than it takes a punt to land when a voice boomed from behind her.

Kim and Terry Pegula
Photo by: GETTY IMAGES
“Hey, Kim!” a man decked out in red, white and blue regalia hollered, leaning over a rail at the front of the stands.

Kim Pegula knew how this would play out. She has seen it every day, every place she has gone in Buffalo since she and husband Terry closed on their $1.4 billion purchase of the team in October.

{podcast}

SBJ Podcast:
Writer Bill King and Assistant Managing Editor Tom Stinson talk about Terry and Kim Pegula's vision for Buffalo and what they mean to the city.

Western New York first made acquaintance with the Pegulas in 2011, when they purchased the beleaguered Buffalo Sabres NHL franchise from former caretaker Tom Golisano, who bought the team out of bankruptcy in 2003. Buffalonians were grateful to have owners who spoke of spending more for talent and investing in downtown revitalization. Sabres management saw as much from surveys of the team’s fan base. But that was nothing compared to the outpouring that came when the Pegulas stepped in to buy the Bills from the estate of founding owner Ralph Wilson.

Sabres fans sent a Hallmark card and a fruit basket. For the Bills, there was a skywriter and a ticker-tape parade.

So when Kim heard that fan screaming her name as she came through the end zone, she responded as she often does, pivoting to wave. And then he did what fans in Buffalo do these days.

“Thank you for saving us,” he yelled.

Saves are commonplace in sports. Goalkeepers make them in soccer. Relief pitchers record them in baseball. In hockey, saves are so integral to the drama that they’re described in detail. Glove saves, stick saves, kick saves.

Saving a team? In a city that lost half its population in the second half of the 20th century? In a region in which a generation of parents raised their kids on the idea that to succeed you had to leave?

Nobody keeps stats on that. Maybe they should.

■ ■ ■ ■

Cliff Benson reached for a sheet of scratch paper, leaned forward and began sketching the resurgent south side of Buffalo’s downtown.

Over here is the waterfront. There, First Niagara Center, where the Sabres play. Here is the HarborCenter, the $172 million complex that the Pegulas opened across from the arena last month, with two hockey rinks, the vast and impressive (716) Food and Sport bar, a Tim Hortons doughnut shop and, soon, a Marriott. There, about a mile and a quarter up the rail line, is a medical campus that has spurred much of the downtown rebirth. Along the way is the Class AAA baseball park, Coca-Cola Field.

And here, snug between the arena and the ballpark …

Cliff Benson, Sabres chief development officer and longtime Pegula confidant; Buffalo Mayor Byron Brown, Terry and Kim Pegula, and Sabres President Ted Black at the 2013 groundbreaking for the $172 million HarborCenter.
Photo by: GETTY IMAGES
Here is where Benson stopped drawing, tapping his pen to a blank spot and looking up.

“If the stadium is right here,” said the confidant whom Terry Pegula dispatched to Buffalo to help execute his vision, not so much for the team as for the city, “then you can tie all of that together under the theory that as those assets are developed, other people will come invest.

“For Terry, this was about more than owning a hockey team, though he loves owning the hockey team. Now, it’s about more than owning two teams. This is about Buffalo, and the region, and economic growth.”

Even if you hadn’t heard of Terry Pegula before he bought the Sabres and then the Bills, you likely are familiar with the boom that funded those purchases. Pegula, 63, made his money through fracking, the controversial process by which modern-day wildcatters unlocked previously unreachable stores of natural gas.

When Pegula sold some of his company’s valuable drilling rights to Royal Dutch Shell for $4.7 billion in May 2010, he began speaking with Benson, a Pittsburgh attorney and CPA, about what he might do next. Benson suggested he read the book “Halftime,” which tackles precisely that question, offering suggestions of how to parlay success into fulfillment.

Pegula came back with a suggestion for a second act that his friend wasn’t expecting. He wanted to buy the Sabres. Benson tried to talk him out of it, suggesting that if he wanted to buy a hockey team, he look for one in a more palatable market. He worried that in only a few years, Pegula would regret the purchase; that he’d find out that sports ownership wasn’t all it was cracked up to be; that missing the playoffs for years in a row felt far worse than drilling in the wrong spot.

“You’ve got more money than you can ever spend,” Benson told him. “What we don’t want to do is wake up one morning and look at this with regrets.”

But Pegula wouldn’t hear of it. He’d become a rabid hockey fan while living in Buffalo back in the 1980s, holding season tickets for 18 years. Kim Pegula was raised about 90 minutes east of Buffalo, in a small town where her parents still reside. Pegula wanted an NHL team, and it had to be the Sabres, who had delivered plenty of wins over the years but had struggled for more than a decade.

“That’s where I want to go,” Pegula said. “I want to help Buffalo.”

Telling the story in his arena office, as the Sabres were getting whacked by the Penguins down on the ice, Benson shook his head and chuckled.

“All right, I’ll go with you,” Benson told Pegula. “But we’re going up there to make a difference. We’re not going up there to stand in the owner’s box and look important. That’s not the gig.”

They hired Ted Black, the head of FSN Pittsburgh, to navigate the purchase of the team. In February 2011, Pegula closed on the Sabres in a $189 million deal that included $15 million in assumed debt, bringing on Black as team president, the slot he still holds today.

The first time they met, Black asked Pegula one question. He wanted to know whether he could stand the idea of someone coming to the arena with a “Pegula Sucks” sign, or registering the domain name TerryPegulaSucks.com.

“Well, the second one is easy,” Pegula said. “I don’t own a computer.”

It hasn’t gotten that bad in Pegula’s nearly four years as owner of the Sabres. But he has taken some shots. Last season, the Sabres came within a point of matching the worst record in the franchise’s 44-year history. Pegula was slammed for sticking with former general manager Darcy Regier for too long before dismissing him last November, then ripped again when things went sideways with Regier’s replacement, Pat LaFontaine, who left in March.

This year, the Sabres are awful again, mired in the cellar of the eight-team Atlantic Division at the beginning of December. But they also are young, with a well-regarded crop of prospects in the pipeline and six picks in the first two rounds of the 2015 draft.

“You could see from the outset that he understood it wasn’t all going to be a bed of roses,” Black said. “He’s a very patient man. To Buffalo, he’s an overnight success story. I tell people it’s an overnight success that was 30 years in the making. I’m not suggesting we have 30 years to win a championship here. But he’ll take a longer view.”

While Terry downplays the toll the Sabres losses have taken on him — “It’s not about me,” he said. “You want to win for the players and the fans.” — those who are close to him said the Sabres’ woes, and the accompanying criticism in the papers, have caused him to take a step back from public view.

Kim, who has embraced the teams’ business side, video chats with a Sabres fan’s wife this fall while delivering season tickets.
Photo by: AP IMAGES
“It’s probably been harder on Terry than myself because I haven’t been out on the firing line as much as Terry has,” Kim Pegula said. “When he first came on the scene, you’re excited, you’re happy, you want to get engaged. And then the media starts and it gets personal. So then you say — ‘You know what? I’m just happy being where I am. I can do without that.’”

Where he is, during Sabres games, is in a small owner’s box that he typically shares with Black and general manager Tim Murray while Kim entertains guests in the larger owner’s suite on the opposite side of the arena. At Bills games, Terry watches with team President Russ Brandon while Kim, their three children, her parents and the rest of the family are with friends in the owner’s suite on the 50-yard line.

Whether by design or as a function of their individual preferences, that in-game dichotomy is an accurate reflection of their respective roles as co-owners.

And they are, by all indications, co-owners not only in name, but in function.

Terry Pegula may have chosen Buffalo because he saw the potential to make something larger out of sports ownership, but he chose sports ownership because he loves sports. His interest is primarily on the personnel side of things — the rosters, free agency, scouting, the draft — and on league matters.

Before Sabres games, Kim meets with season-ticket holders.
Photo by: PEGULA SPORTS & ENTERTAINMENT
Kim Pegula likes hockey and football, but mostly she is interested in what goes on beyond the playing surface — game presentation, marketing, ticket sales and customer service; the traditional, business-side dealings of a front office.

And so the Pegulas, as a couple, have divided oversight of their sports properties quite neatly.

Settling into the suite in the minutes before a recent Sabres game, Kim watched as an array of graphics and video were projected on the ice below.

“I’m not going to be the hockey person, but when you’re talking about sports and entertainment, this is the stuff I like,” Kim said. “Terry gets competitive about what’s on the ice. For me, it’s what you see from up here. I can have an impact there. I came in and our game presentation wasn’t much. We had two lights. I said, ‘What do the other teams have?’ Most teams have 20 or 30. We had two, and one didn’t work all the time. Now, we have 45 to 48 lights on the ice.

“Terry is all about the hockey. I come for the experience.”

She has paid close attention to that experience, and other aspects that might affect Sabres fans, since they bought the team, regularly walking the concourses to chat with them, even passing out programs at the main entrance before some games.

Before each game, Black meets with one or two dozen season-ticket holders in an area set up to look like a locker room, with stalls customized with the names of the fans in that night’s group.

Not long into one of those meetings before a recent game, Kim entered the room, taking a seat in a locker to the right of Black. When a fan brought up a sore point, the franchise’s practice of using the MSG feed featuring the opposing broadcast crew when the Sabres are on the road against the Rangers, Islanders or Devils, Kim chimed in.

“Terry was at home watching on TV and he said the same thing,” she said. “‘Why do I have to listen to these guys?’ I told him I’d find out.”

It was the sort of moment that goes a long way toward explaining why many in Western New York revered the Pegulas, even before they doubled down.

■ ■ ■ ■

Even without the Bills, the Pegulas had a sprawling sports and entertainment business. They got the Buffalo Bandits National Lacrosse League team as part of the Sabres deal. A couple of months later, they added the Sabres’ AHL affiliate, the Rochester (N.Y.) Americans.

They had Five Star Athletes Management, a sports agency representing NFL players. And Impact Sports Performance, an 8,000-square-foot athletic training facility in Boca Raton, Fla. They also had a country music recording studio and label in Nashville, run by Kim’s brother, Gordon Kerr.

And then, on April 13, 2013, they broke ground on the HarborCenter, a $172 million complex born of far humbler stock.

When Terry and Benson were spitballing the idea, the plan was to build two hockey rinks on top of a parking garage. They wanted to improve the property adjacent to the arena to show their commitment to improving downtown. After visiting the Washington Capitals’ Kettler Iceplex, they decided something similar could work in Buffalo.

As Benson looked into the

 
Buffalo fans have regaled the Pegulas since they saved the Bills from relocation, and have bought into the concept of One Buffalo that the new owners are pushing. “One Buffalo is a great example of how we see what we’re doing here,” Kim said. “It’s not about football. It’s not about hockey. It’s about our city and the community.”
Photo by: AP IMAGES (2); GETTY IMAGES (2); TERRY LEFTON / STAFF (1)
engineering, it was clear that the project didn’t make financial sense. He told Pegula that moving forward would be akin to presenting the city with “a $15 million gift.”

Pegula said that was fine.

Then Kim got involved. During a meeting in Kansas City with sports architecture firm Populous, Benson saw her interest piqued as they discussed ways that the

 
project might be broadened. It would increase cost but also throw off revenue.

“Parking garages don’t make money,” Kim said, explaining the shift in thinking. “This one has a rink on top of it, so because of the cost to build it that way, that puts even more pressure on the finances. So what makes money? Hotels make money. Let’s do a hotel. Restaurants make money. How do we get a restaurant to come here? Well, I always wanted to own a restaurant so let’s do it ourselves. And let’s put a Tim Hortons in here, too.”

Initially, Terry balked at the idea. But Kim persisted.

What they landed on is a one-of-a-kind project that figures to make Buffalo a magnet for top-level amateur hockey. The larger, main rink, which seats 1,800, serves as home to Division I Canisius College and the Sabres’ junior program. A second rink allows for simultaneous games during tournaments, as well as additional space for practices and training.

There are nine locker rooms along with a state-of-the-art training facility staffed by the Pegulas’ Impact Sports Performance staff. Their hockey academy, headed by former Sabres coach and NHL player Kevyn Adams, also works out of the facility, making use of the training center as well as a 50-seat classroom and 40-seat tiered theater with telestrator.

The flow of events, and the hockey families that they will attract, made the hotel a logical play. Those, coupled with games and shows at First Niagara, also should fuel the (716) restaurant and the Tim Hortons.

While Kim was engaged on the entire project, it was the (716) that she put her heart into, enlisting the Sabres’ longtime director of creative services, Frank Cravotta, to head up the design. The 13,000-square-foot, two-level restaurant features a 38-foot TV screen, eight booths with their own TVs, hockey sticks for door handles and illuminated, glass-top bars that look like sheets of ice.

“Honestly, the only resemblance between what Terry and I were talking about and what Kim eventually produced is that there’s two rinks and a parking garage,” Benson said. “She took it and ran with it and she did a phenomenal job.”

It was while planning the HarborCenter that it occurred to Kim that they needed a company to tie the management of all their properties together.

Pegula Sports & Entertainment was born in July out of her recognition that, in working with management from so many properties, she was having the same conversations time and again. She didn’t want to merge the staffs, but she did want to streamline her dealings with them.

She plucked a trio of department heads from the Sabres — Chuck LaMattina from finance, Brent Rossi from marketing and Cravotta from creative services — then added Mark Preisler, who spent 11 years as a producer at ESPN and almost four years as executive producer at the NHL Network, making each an executive vice president of the new company, which now employs 20. Kim is president and CEO.

“I saw there were these key people I was relying on who could help across all these entities and bring it together and streamline the confusion I was starting to have with all these things going on,” Kim said. “The beauty of PSE is that there are links, but we’re not combining things together. So nothing has to be forced. PSE is that conduit that can ask, ‘What does work?’ and then implement it.”

The most obvious crossovers are in finance. That also was the easiest area to integrate, since the Bills’ accounting all was handled outside the organization when Wilson owned the team. LaMattina had to create a finance department from scratch. To smooth that transition, he hired the controller who handled the Bills’ finances in Detroit, where Wilson was based. He is relocating to Buffalo. He also hired three new staff members to handle accounting and payroll.

The idea is for each of the properties to maintain its own books, but do so using similar systems, so that PSE can view them in a consolidated fashion. They’re also putting all the properties on the same payroll and accounting systems, hoping to find efficiencies there.

Consolidating the creatives from the Pegulas’ sports and entertainment properties around Cravotta, who brings a rare background designing exhibits that was particularly valuable in the renovation of the Sabres’ locker room and the planning of (716), gives PSE an in-house agency with a dozen employees, a mix of graphic designers, animators and editors.

“The stuff we do is pretty amazing when you think that we can design a ticket, we can design a magnet, and we can design a $200 million, state-of-the-art hockey facility,” Cravotta said. “That was all done through this group.”

Although they’ve only begun discussing further integration of the Bills, it clearly will influence the structure of PSE.

“We’re really fortunate that because we live in a small community, we all already know each other,” Brandon said. “It’s going to take thoughtful consideration in the coming months as we think about how we build our business. It’s not all going to be easy. But it’s exciting. So park your ego at the door and let’s be part of one of the more special opportunities you will ever find in sports. If you can’t get fired up about that, then you might be in the wrong spot.”

In marketing, the early emphasis of the combined entity will be on tracking consumer behavior more than packaging offerings or sharing lists. With so many properties in the region, PSE plans to create a central media buyer to serve them all.

“We know from our research that people here look at these as their teams, as community teams,” Rossi said. “It’s not like that in every other market. And I think it’s because there have been times that you didn’t know if your team was going to be here the next year. It’s the Bills now, but the Sabres went through the same thing. So you don’t just want your teams to win, you want them to survive. You’re in this together.

“When you can tap into that feeling of community, and really make it about Buffalo, people respond.”

The best example of the Pegulas tapping into that came soon after they bought the Bills, when they were prepping for their first home game as owners. Initially, Terry and Kim said they didn’t want to do anything, other than perhaps honor Wilson’s contributions. But Rossi convinced Kim that they needed to acknowledge the only ownership transfer in 53 years in front of the fans.

Working with Rossi and Cravotta, Kim came up with the idea for “One Buffalo,” a campaign that would tie together the fan bases of the two teams, rallying behind the resurgence of the region. There was a video that aired in-stadium before the game, narrated by Chris Berman. “One Buffalo” T-shirts were distributed to fans at the gates. And there was a social media hub aggregating content from all the teams.

“One Buffalo is a great example of how we see what we’re doing here,” Kim said. “It’s not about football. It’s not about hockey. It’s about our city and the community. Really, it was a response to what Terry and I felt when we went through the whole bid process. There were people out raising money [to keep the team in town]. People writing songs. This was such a catalyst for the community.

“I don’t know if you could do what we’re trying to do here anywhere else.”

■ ■ ■ ■

The on-field portion of Kim’s tour before last month’s Bills-Chiefs game was more handshakes and hellos than fact-finding. She met an Army general who was there for the team’s annual salute to the armed forces. Thanked a couple of sponsors. She made a presentation honoring employees who got a paid day off for exemplary performance.

Then she made her way to the visiting sideline, where she was introduced to a family that had its own long connection to the Buffalo franchise.

The AFL was the brainchild of Chiefs owner Lamar Hunt, who died in 2006. Ralph Wilson was one of the league’s original owners. As such, the Chiefs and Bills, and Hunt and Wilson, were inexorably linked in football history.

The Pegula family — (from left) Matthew, Kim, Terry, Kelly, Laura and Jessie — pose in the stadium shortly after the purchase of the Bills. Not pictured is Terry Pegula’s eldest, Michael.
Photo by: GETTY IMAGES
Lamar Hunt’s wife, Norma, son Dan and daughter-in-law Toni Munoz-Hunt were standing near the visiting bench when a Bills executive brought Kim over for her first introduction.

Norma Hunt told her that games against the Bills always held a special place for them, because of the history the teams’ patriarchs shared. She said she was thrilled to see the Bills land with someone who planned to keep the team in Buffalo, and even more so to see it in the hands of a family that intended to make it a generational legacy. Dan Hunt pointed out another similarity: That both of them own teams in more than one sport. He offered to share the way the Hunts handled their succession plan if Kim and Terry were interested.

Succession is something the Pegulas discussed even before they bought the franchise. Four of Terry’s five children — two from a previous marriage and three with Kim — were on the field when they were introduced as owners before their first home game. How involved that generation will be in the management of the sports properties remains to be seen.

“I don’t doubt that at some point in time they’ll want to be involved in some area of the business,” Kim said. “But we have no idea how, or how much. Whatever it is, it’s a huge plus. With Mr. Wilson, it was Mr. Wilson and then no one knew what was going to happen. Now, people here know we’ve got all these kids, and they’re young. So we’re going to be around a while. There will be a plan and they will fit into the plan.”

Terry has made it clear what the plan is in the meantime. Kim is an involved and engaged co-owner, to a degree that is unique for a spouse in the NFL and rare for one in the NHL.

“When I’m in the box, [Kim] is going to be the primary contact with the league,” Terry said. “You can’t step into a job without knowing anything. So if my wife is going to hopefully be the succession owner, then wouldn’t it be nice if she’s up on everything going on?”

On her tour to learn about the Bills’ game-day operation, Kim peppered those she encountered with questions, probing in a way that indicated she was sincerely curious, not just feigning interest. As if she needed to endear herself any more to the already thankful staffers and volunteers, she brought smiles to their faces when she noted that they could use more space.

During a meeting with the guest services workers who man the entry gates, one woman kept glancing Kim’s way, dabbing the corner of one eye with a tissue, as if bothered by an allergy. After the new owner made a few remarks and was on her way out the door, the woman rose and raised her hand.

“I just wanted to say thank you to Mrs. Pegula,” she said, her voice cracking. “And to Mr., too.”

SBJ Morning Buzzcast: March 18, 2024

Sports Business Awards nominees unveiled; NWSL's historic opening weekend and takeaways from CFP deal

ESPN’s Jay Bilas, BTN’s Meghan McKeown, and a deep dive into AppleTV+’s The Dynasty

On this week’s Sports Media Podcast from the New York Post and Sports Business Journal, ESPN’s Jay Bilas talks all things NCAA. Big Ten Network’s Meghan McKeown shares her insight into the Caitlin Clark craze. The Boston Globe’s Chad Finn chats all things Bean Town. And SBJ’s Xavier Hunter drops in to share his findings on how the NWSL is making a social media push.

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Journal/Issues/2014/12/08/Franchises/Pegulas-One-Buffalo.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Journal/Issues/2014/12/08/Franchises/Pegulas-One-Buffalo.aspx

CLOSE