Blizzard to relocate to Brookings, South Dakota for 2012-13 season
The North American Hockey League (NAHL) has announced that its Board of Governors has approved the relocation of the Alexandria Blizzard from Alexandria, Minnesota to Brookings, South Dakota. Once the move to Brookings is complete, the ... Read More...
Congratulations to Chris. During my tenure in the NAHL, I always found Chris to be honest and professional. I trust he needs to make this change for the good of his organization.
It does, however, magnify a significant operating limitation of the league that is the underlying reason you always see a tsunami of off-season changes to the structure and process of the NAHL. In the simplest of terms, the business model of the NAHL does not work. There are certainly a few exceptions, but not many. It is extremely difficult to meet the demands of USAH and the financial obligations set forth by the league in how it wants to market and brand itself. Parents, communities, and the media should never be surprised at what happens in the league. I met some great people there with the very best of intentions who ran their teams honorably. But in the end, you are always chasing the money because of the expense of the business model.
The issue is not about the model, it is more about the pipedream that is sold to the unsuspecting markets.
The Tier II criteria does work well enough in Fairbanks and Kenai River. It works well in Wenatchee and the entire south division outside of NM. It will be extremely successful in Johnstown and it has been in Fresno.
Like a lot about life, the return depends on the effort and investment.
I believe that Chicago could have been a gold mine. Instead the operator treated the market like a piggy bank. If somebody went into that market with a seven figure budget, he would be able to come out of it with a competitive profit.
It is the very small markets that have a difficult time sustaining the operation. The blame there falls back on the individual that pushed the concept down their throats.
Alexandria should have been a Minnesota Junior Hockey League all along, the same goes for Albert Lea, Owatonna, North Iowa, and the others. The NA3HL went in there only to give their weaker operators a way out that saves face.
Correct me if I am wrong but is anyone forcing anyone to join the NAHL? Those who "sign up" for the NAHL should know exactly what they are getting into beforehand, methinks. Seems as though owners who could not/did not make a go of it in any league, in this case the NAHL, take to casting the blame for their shortfalls elsewhere. If David Saint-Onge was "misled" in any way by the NAHL, then let us know how. To me, if due process is done, there should be no reason to cast the blame elsewhere for one's failures.
A reasonable amount of reality is expected in the presentation. If the business plan is expected to raise $350,000 and the commissioner approves it, there is a strong likelihood that the new owner is going to come up $150,000 short.
The reality has to be in the expectations. The rest of the league owners should tell the new guys that $350,000 is just not going to cut it. Realistic sales goals should be set and reachable. Some of these operators go into markets with a pie-in-sky hope that they are going to sell out all available properties and average 5,000 fans a game at the full ticket-price.
What they don't tell them is to get ready for a ton of three-games series' against the same opponent. The true cost of equipment and the rate the league approved supplier is forcing you to pay. Same goes for the rate at the official hotel you will be forced to stay at.
Operators quickly discover that the best way to end up as a millionaire involved in junior hockey is to start out as a billionaire.
There is a really good reason that the Tier II criteria calls for a net worth of $2.5M in liquid assets, because it just may take that much room to really make a team work.
They really need to do their due diligence and check into the market. Any business savy potential owner should talk to current owners, as well as former owners and get a realistic idea what they are looking at. While some teams can run on a shoe string budget some teams can't.
I do know that before Soo Eagles owner Ron Lavin purchased the Traverse City North Stars franchise he did exhaustive due diligence on the NAHL before making his decision. Ron's a smart, successful businessman who knows exactly what he is getting into joining the NAHL. His judgement is unquestionable.
Gentlemen, I merely rendered an opinion based on pertinent experience. No ill will, no sour grapes.
Due diligence is necessary, but when the demands of the league change, and change at a pace that is not economically viable no matter how much due diligence you did when you acquired the team, it is almost impossible to survive. Those that do are either in a market that works at higher price points, or they are afforded access to coffers other teams do not have. The point about needing $2.5 million of liquid assets to simply 'make a team work' is exactly my point. The massive amount of team turnover and relocation is directly related to the operational demands put on these teams. Being forced to travel, being forced to attend events that do not add value to your team but line the coffers of a select few, are pertinent examples of how due diligence inevitably fails. Everyone who enters the league has the best of intentions. I have met a great many people who are good businessmen but quickly discovered that unwritten mandates and excessive spending is not the recipe for success. If I wasn't somewhere on the right track, you wouldn't be writing about how kids are taken advantage of and how some owners might be less than honorable. Everyone has to chase the almighty dollar if they want to survive in this model.