How to Build a Stanley Cup Contender in Atlanta, part 1

Atlanta Thrashers Strategic Memo: Building a Competitive Franchise

To: Bruce Levenson,Michael Gearon, Steve Belkin, Ed Peskowitz, Rutherford Seydel, Todd Foreman, Michael Gearon Sr., Beau Turner.

It has come to my attention that you have an under-performing asset (Atlanta Thrashers hockey club). This club is valued at $158 million by Forbes magazine, but it lags other NHL teams in terms of revenue, attendance and on-ice performance. Of these three elements, the on-ice product is hurting both revenue and attendance.

In the following memo I will lay out a series of strategies and tactics that I believe could improve your product and make it a championship contender and a financially rewarding enterprise. Before we delve into strategies it is important to first evaluate the status quo situation.

Part 1 The Potential of your franchise in the Atlanta market.

You own a NHL franchise that is located in the Atlanta metro region. This franchise has a unique set of positive and negative attributes.

On the positive side of the ledger the Thrashers exist in one of the largest and fastest growing metro areas in the USA or Canada. People who live in this city are better educated and have more disposable income to spend watching professional sports teams. This is a "target-rich environment" in military terms. The table below shows that the Atlanta metro currently ranks 8th among large US cities and has experienced very rapid growth since 1960.

Atlanta also has a large number of corporations which can afford to purchase expensive luxury boxes and club seats. These companies provide the financial backbone for any successful pro sports team as their expenditures then to remain more consistent on a year-to-year basis while fan ticket purchases are more elastic. The table below shows a breakdown of Fortune 500 companies by metro area (compiled by the author). Because your team is located in Atlanta area, your organization has the potential to bring in more corporate money that many other NHL teams.

Your city could be very attractive place for hockey players to live and play during their careers. The climate is warm, it is family friendly for parents of young children, the city has good restaurants and shopping that might interest player spouses. The cost of housing is affordable but the quality of life is quite high here. If your organization develops a reputation for being competitive on the ice you should have a leg when recruiting unrestricted free agents.

On the negative side of the ledger, the metro region where your team sits lacks the same appetite for hockey that exists in Canada or cold weather cities where it is part of the sports culture. Millions of people in your market have neither never worn ice skates nor attended a hockey game in person. Growing the appetite for your product requires both a long term strategy and an attractive product.

There are nearly 1 million northern transplants living in Atlanta who do buy tickets and attend games at your building. Unfortunately, many of these people are rooting for the visiting team and don't buy tickets often enough. To covert these hockey fans you need a  better hockey product--a product that they find irresistible--one that will slowly warm their hearts and open their pocketbooks. Thus far in their history the Thrashers have only finished in the top half of the NHL once--and many transplants remain loyal to their childhood teams.

The last big negative is branding. The NHL has a poor reputation in your market. The previous incarnation--The Flames--departed in the mid-1980s. The current NHL franchise has only finished in the top half of the 30 team league one time and was swept in their only playoff appearance. That record has branded your team as a "losing team" which is very costly in a city with so many transplants. Your franchise retains the same management team which has presided over these losing seasons. Fairly or unfairly, you management team is viewed as inferior after a decade of failure. Potential customers are unlikely to be enticed by a salesman who has not delivered on his promises.

Because of the current management team's poor performance, your franchise is now branded as a "losing organization" and your team struggles to sign the their top free agent choices despite playing in a great building, with a nice practice facility, in a warm weather family friendly city. This a hidden costs or "loser's tax" that follows from years of fielding a non-competitive product.

Summary: As a NHL market Atlanta has enormous potential because of its sheer size and wealth. But the market lacks an automatic fanbase. Winning is required. it will lead to more attendance, it will lead to more revenue. Winning will lead to better player recruitment and retention.The Atlanta Thrashers have the raw elements for a strong foundation but so far the poor on poor product has prevented them from realizing any advantages from their geographic location. In part 2 we will begin to outline strategies that could improve the win loss record of the Thrashers and improve their place in the standings.