Late last evening, it was confirmed that the Central Hockey League’s Arizona Sundogs have suspended operations for the 2014-15 season, leaving the CHL with just seven teams stretching from Texas up to South Dakota and east to Metro Toronto.
Neither the Central Hockey League nor the Arizona Sundogs have publicly commented, though Sundogs head coach Kevin Colley did retweet a call by a fan for NHL and AHL clubs to take a look at the young coach.
Seven Teams, What Now?
As I mentioned last night in another post, this has severe implications for the remaining teams on the balance sheet.
When you consider travel costs, Arizona was the team furthest west in the league, so on one hand, a geographical outlier is removed. On the other hand that means you have every remaining team possibly making another trip to Brampton – a trip that requires extra days of bus rental, extra bus drivers, more per diem for the players and staff, and more hotel stays.
One team will now have to sit at home (or in a hotel on the road) on Friday and Saturday nights – with an even number of teams, they’d be playing a home game. Over a 26-week season, this is 52 dates of prime attendance lost, which works out to over seven per team.
But Denver and Arizona are Going to Be in the AHL Next Year!
No, they are not. If either team plays a single game in the American Hockey League, I’ll make soup out of my old goalie pads and eat it. I’ll post the video on YouTube.
Start by looking at the average per-game attendance for the last five seasons:
2013-14 2,570 1,787
2012-13 2,617 2,981
Neither of these teams has drawn well. Last year, Arizona would have outdrawn one AHL team, the Portland Pirates, who were playing in Lewiston, Me. due to a lease dispute with the Cumberland County Civic Center. In 2009-10, the Sundogs would have outdrawn the Lowell Devils, who drew about 200 fewer fans per game.
Both Arizona and Denver have been losing money hand over fist – and you don’t need to see their financial statements to know that. If they were breaking even or making money, they’d still be playing.
There’s generally a common trajectory in minor league hockey. Someone with more money than they know what to do with (but not enough to lose, say, $300,000 per season) and very little know-how buys a hockey team that’s had moderate success at the box office. They see the team is making money, and like most people, they want to make more money. Generally, they cut the marketing budget and/or reduce the size of the sales staff.
Unfortunately, minor league hockey isn’t like most businesses. Rather than spending a dollar to make two dollars, you have to spend a dollar to make $1.03.
The team, now with a reduced staff, is still trying to bring in the same revenue with fewer personnel, which is almost always impossible. The losses mount, and eventually, the team bus rolls down the road paved with good intentions toward the big hockey rink in the sky.
Let’s circle back to the AHL in Denver and Arizona. These two ownership/management groups haven’t drawn well for years. Arizona has been reduced to doing asinine promotions to try and sell season tickets. And from what I’ve heard, it didn’t go well, with Arizona’s season ticket base hovering around 300 for the past few seasons.
No AHL owner in their right mind would vote to approve a transaction that would bring these two groups into the league, and there would have to be some sort of transaction. The Portland Pirates, the AHL affiliate of the Arizona Coyotes, aren’t just going to pick up and move to Prescott Valley, Arizona. They’re owned by a Portland businessman and merely have an afilliation with the Coyotes – the Coyotes have no say as to what city the Pirates call home.
Nor would any NHL team that owned its AHL affiliate put it in these groups hands. Sure, NHL teams can lose some money operating an AHL team, since an entire season of AHL operations costs the same as the salary for three average NHL players. But that doesn’t mean that an NHL club like say, the Arizona Coyotes, are going to throw money down the black hole that is minor league hockey in Prescott Valley solely for the convenience of having an AHL affiliate nearby. The ‘Yotes have enough financial problems as it is.
The only way Denver and Arizona get to the AHL is if an NHL club buys an AHL franchise and moves it there, and the chances of that, based on the history of these two markets, is slim-to-none.
Is the “Silly Season” Over Yet?
Probably not. With seven teams, I’d bet another CHL team opts not to play the coming season. A smart owner would have done the math on the financial realities of all the possible scenarios, such as playing with seven teams, and would know that he can lose less money sitting out than playing in 2014-15.
The opinions expressed herein are solely those of the author, and not his current or prior employers.