Denver Cutthroats Suspend Operations – What’s Next?

Despite a flood of speculation from fans and hockey insiders, the Central Hockey League didn’t fold today. But it did lose one team, and the future of other teams and the league itself beyond the 2014-15 season – remains seriously in doubt.

Just after noon Eastern Time, the Central Hockey League announced that the Denver Cutthroats were suspending operations for the 2014-15 season. The move was not a surprise to those in the know in minor league hockey, as the Cutthroats had drawn less than spectacular crowds over the past two seasons.

But of all the things I heard from contacts within the hockey world, some of which I tweeted out, Denver’s suspension of operations was the only one that happened. But that doesn’t mean there won’t be further movement.

What Denver’s Suspension of Operation Means

When a team suspends operations, it elects to not play hockey for a season while maintaining its membership in a professional hockey league. Therefore, the Cutthroats are still a member of the Central Hockey League, and could resume play for the 2015-16 season – in either the CHL or another league.

This is a common occurrence in minor league hockey. I was the director of broadcasting for the ECHL’s Mississippi Sea Wolves when the team suspended operations in the spring of 2009. Sometimes, the membership in the league is sold and moved to a new market; other times, the team never returns to the ice, as happened with the Sea Wolves.

I can’t say I’m surprised that Denver suspended operations. Drawing 1,787 fans per game doesn’t come close to breaking even in any league save for, perhaps, the barely-professional Federal Hockey League, unless you literally pull in millions of dollars in corporate sponsorships. Somehow, I don’t think that was happening in Denver.

Is It a Bad Thing?

Not necessarily – Denver faced competition in the market from the NHL’s Colorado Avalanche. In that regard, they were in the company of Sir Edmund Hillary in terms of hills to climb. For the league’s sake, it’s probably better that the Cutthroats suspended operations now rather than hemorrhage money through the start of the 2014-15 season on their way to a possible mid-season fold.

Why? Several reasons. Firstly, if the CHL played with nine teams in 2014-15, they’d have an odd number. This is a problem because it means that a team is sitting idle every Friday and Saturday nights – and Friday and Saturday night home games are the lifeblood of minor league teams. When you have a larger number of teams, like the ECHL, you can play with an odd number and it’s not so bad. If you have 21 teams, and the season is 26 weeks, idle Fridays and Saturdays don’t come around as often as when you have a nine-team league and 26 weeks.

So if (and it’s a big if, considering the rumors circling around the Arizona Sundogs) Denver is the only team to suspend operations, then the CHL will have an even number of teams, meaning plenty of weekend dates for all.

The corollary is that travel costs will rise because of Denver’s suspension. There are very few day trips left for teams in the CHL – the team hops on a bus at noon, plays a road game at 7 p.m., and comes home that night. The more day trips you have, the lower your costs of operation. Each day of renting a bus costs at least $1,000, especially if you are going far enough to require multiple drivers. Each night away means 13 hotel rooms, and while teams usually get a discounted rate, those hotel bills accrue quickly.

So What Happens From Here?

It’s hard to say. I, like many others, was pretty certain we’d hear something regarding the future of the Arizona Sundogs today. We didn’t. The Sundogs have been in trouble for years, mostly due to poor management and marketing. Maybe, just maybe, with an even number of teams in the CHL, they’ll stick around for another year as the CHL limps on. Maybe not. Time will tell.

I can categorically say the following: there will be no “merger” between the ECHL and the CHL. Not this year, not next year, not ever.

Why No Merger?

Merger is a legal term of art, where two business entities are combined to become one business entity. For example, Exxon merged with Mobil a few years ago, and now there is a corporation called… ExxonMobil. For the ECHL to merge with the CHL in the legal sense, the ECHL would have to see some value in that transaction – and there is none.

What benefit is there to the ECHL, as a league, to absorb the CHL? It would mean taking on all the liabilities of the Central Hockey League, including outstanding debt, legal liabilities, workers comp, and the like, while not gaining any substantial assets or revenue streams.

If the CHL goes the way of the dodo bird, which I predict it will after the coming season, any CHL teams that want to join the ECHL as expansion members that can pony up the membership fees and dues will probably be able to do so.

Secondly, it will not happen for the coming season because the ECHL is far too organized for the coming season to add between four and eight new teams with seven weeks to go before training camps open. It would mean completely redoing the schedule, which gets infinitely harder with every additional team that’s added. (If you want to know about what goes into making a league schedule, the AHL had a good piece on it.) Additionally, insurance policies and other financial arrangements are in place and preliminary travel arrangements have been made.

Is The “Silly Season” Now Over?

Probably not. The rumors are still flying about the Arizona Sundogs, and there’s another team that I heard could sit out, leaving the CHL with six teams for next season.

Meanwhile, Andy Strickland said:

<blockquote class=”twitter-tweet” lang=”en”><p>Letters are currently being sent out to business people in the local hockey community searching for buyers for the St. Charles Chill.</p>&mdash; Andy Strickland (@andystrickland) <a href=”https://twitter.com/andystrickland/statuses/501054032345956355″>August 17, 2014</a></blockquote>
<script async src=”//platform.twitter.com/widgets.js” charset=”utf-8″></script>

<blockquote class=”twitter-tweet” lang=”en”><p>The letter states the Chill are hoping to resume play in 2015-2016. Franchise has been iced for this season <a href=”https://twitter.com/hashtag/stcharleschill?src=hash”>#stcharleschill</a></p>&mdash; Andy Strickland (@andystrickland) <a href=”https://twitter.com/andystrickland/statuses/501054283542822912″>August 17, 2014</a></blockquote>
<script async src=”//platform.twitter.com/widgets.js” charset=”utf-8″></script>

which means the CHL office is still trying to plug the holes below the waterline.

And Here’s One More Thing

The much whispered-about but mostly unreported-upon lawsuit filed by the CHL against the ECHL et al. is scheduled to go to trial on Oct. 6.

Why would the ECHL even entertain the thought of merging with a competing business that has been suing them for the last 15 months?

The case, styled Western Professional Hockey League, Inc. v. Top Shelf, L.L.C., et al.,  is No. 13-05044, filed in Dallas County, Tex., and is pending before Judge Emily Tobolowsky.

-30-

The opinions expressed herein are solely those of the author, and not his current or prior employers.

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