A month after the Vegas Golden Knights lost to the Washington Capitals in the Stanley Cup finals, the Knights’ business leaders got together for one reason: to figure out how to improve a team that already enjoyed unprecedented success in its debut season, both on the ice and financially.
In the NHL, new teams such as the Knights rarely do so well from the beginning, and even if they do, it often doesn’t last long. The Florida Panthers, who got off to a solid start in 1993, reached the Stanley Cup finals in 1996. But the team has made the playoffs only four times since and, as of last year, was $11 million in debt, according to Forbes.
The Arizona Coyotes filed for bankruptcy in 2007 and were declared bankrupt in 2009. The NHL bought the team for $140 million that year and later sued a former owner for $61 million (the suit was eventually settled for an undisclosed amount). The team’s management, along with NHL Commissioner Gary Bettman, at one point discussed moving the Coyotes out of Arizona as they struggled to improve the club’s finances. The Coyotes declined to comment on their current financial state, but the deficit is now less than $25 million, according to people familiar with the matter.
The Coyotes and the Panthers both started out with solid attendance, with the Panthers passing 18,000 per game in the 1998-99 season, according to HockeyDB.com. But the Panthers haven’t come close to that figure since. Both teams are regularly near the bottom of the NHL. The Coyotes went into a slump starting in 2009, but this year, so far, they are at their highest attendance since moving to Arizona, averaging more than 16,000 fans.
The Knights started fresh and have already made an undisclosed profit. T-Mobile Arena was built in 2016 as a joint venture between MGM Resorts and the Anschutz Entertainment Group, with no taxpayer subsidy. Bill Foley, the Knights’ owner, later invested in the arena and is now a limited partner. The Knights retain all the revenue from ticket sales, sponsorships and retail and media rights and share the revenue from food, beverages and parking. Bubolz wouldn’t specify the length of the lease but said, “It’s measured in decades vs. years.”
From afar, Las Vegas looks like an unlikely home for hockey. The Las Vegas Valley had just three ice rinks and little skating among children. But Bubolz and his team learned from research that there were roughly 250,000 people in the city who were avid hockey fans. Vegas had many transplant residents from hockey cities such as Chicago, Buffalo, Detroit, St. Louis and Toronto. Bubolz also learned that less than 20 percent of Las Vegas residents were born in Vegas and that Hispanic, Asian and African American people represented half the population. The team now lets fans listen to home games in Spanish on the radio and television.
“We just couldn’t look at half the market and say, ‘Well, because you haven’t been exposed to hockey before, then we can just assume that you wouldn’t be interested,’ ” Bubolz said. “Those three communities are growing in a very positive way.”
The Knights have tried to attract children, too. This year, along with the NHL and an energy company, the Knights gave hockey sticks and equipment to schools in the Clark County School District — Vegas is Clark’s biggest city — so that children in the sixth, seventh and eighth grades could play street hockey once a week.
“It’s all a part of feeding that next level of fan,” Bubolz said.
This season, the Knights have the fourth-highest NHL television rating among U.S. cities, behind Pittsburgh, Buffalo and St. Louis. The team’s television rating is more than 100 percent higher than it was after 25 games last year. In terms of stadium capacity, the Knights are second in the NHL, behind Chicago. Every home game has been a sellout, and the team has sold 6 percent of standing-room-only spots this year, vs. 3 percent last season.
The Coyotes had early success, too, reaching the playoff quarterfinals in their first four seasons. But as the years passed, they sunk as a team and as a business.
One problem was Talking Stick Resort Arena, a home that had primarily hosted basketball. In 3,000 Talking Stick seats, fans couldn’t see the entire ice. In 2003, the Coyotes moved to their current home, the Gila River Arena in Glendale, Ariz.
When Andrew Barroway, now the Coyotes' owner, first invested in the team in 2014, he bought 51 percent for about $155 million in equity. Last year he purchased the rest of the team for close to an additional $150 million. The Gila River Arena is now on a year-to-year contract. The city’s taxpayers will have paid a total of $224 million when bonds issued for the arena mature in 2033. Meanwhile, the Coyotes continue to search for a new stadium in metro Phoenix, closer to their fans. The team, which is 13-15-2 through 30 games this season, is in its first hopeful economic season after struggling since 2007.
“We’ve got a lot of work to do and a lot of catch-up, but we’re making great strides and I certainly like where we’re at,” said Ahron Cohen, the 34-year-old president and CEO of the Coyotes who has been with the team since 2015. “We’re finally to this point of some stability where we can make some of these investments that are needed.”
So far the Knights haven’t experienced anything but success. Yet Bubolz knows what could happen: He had previously worked for 13 years, most recently as president of business operations, for the Cleveland Cavaliers, where LeBron James brought joy when he arrived and heartache when he left. Just like basketball, a lot can go wrong quickly in hockey, no matter how well you start. But right now, Bubolz is optimistic about the team’s performance and its future.
“I really believe that we’ve got a foundation of players who are going to allow us to be competitive for quite some time,” he said.
Tom Perrotta writes for the Wall Street Journal, FiveThirtyEight and other publications. He lives in Brooklyn.
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