The Hartford Whalers Are Going Going … Essay, Research Paper

The Hartford Whalers Are Going Going …

The Hartford Whalers are in a very tough situation at this time. When Peter Karmanos bought the team in May of 1994, he inherited the worst lease agreement at the smallest arena in the NHL. The Hartford Civic Center lease agreement creates profit for private companies; however, the lease causes the Whalers to lose money. The mall is owned and operated by Aetna; therefore it has nothing to do with the Whalers. The city of Hartford owns the coliseum, parking garage, and exhibition hall. The state of Connecticut pays a 1.6 million dollar annual leasing fee to take control of the coliseum, parking garage, and exhibition hall. The state hired Ogden Entertainment Services to run the coliseum, and Ogden receives all of the revenue from luxury boxes, the coliseum club, advertisements, rental fees and the exhibition hall. The state also hired Kinney Systems to run the parking garage and Service America Corporation to run the concessions. Both companies receive all revenue from the service they run. After all of this, there is no money left for the Hartford Whalers (Swift & Arace, 1+).

The reason why these three companies keep all of the revenue from the Civic Center can be blamed on Richard Gordon, the former owner of the Whalers who did not want the city of Hartford to run the Civic Center. In 1993, the state decided to negotiate a new lease with the Whalers. The state of Connecticut did not want to run the coliseum so they hired three private companies to take this job. These companies would only run the Civic Center if they could keep all of the revenue from the service they controlled. Richard Gordon accepted this lease because this agreement would repay him for an additional ten million dollars in loses and he sold the team a year later (Lang 53-69).

The Hartford Whalers is the only major league team in Connecticut and at the Civic Center. They currently have a bad lease which causes them to lose money. The Hartford Whalers play all exhibition, regular season, playoff games, the training camp, and some practice time rent free at the Civic Center. However, the Whalers get no revenue from concessions, luxury boxes, parking, and the coliseum club. The Whalers get sixty percent of the revenue from advertisements along the boards but no revenue from all other ads around the coliseum (Swift, 1+). The Whalers can leave Hartford after the 1997-98 season if they lose a cumulative thirty million dollars from 1994-95 through 1997-98. They must also pay a five million dollar penalty to leave Hartford. If the Whalers lose more than thirty million dollars and they choose to stay, they can subtract one-half of only thirty million dollars from the 25 million dollars they owe the state to complete the sale of the Whalers. This amount is 10 million dollars. If the Whalers do not lose thirty million dollars in this four year period, they must subtract one half of their loses from the 25 million they owe the state to complete the sale of the Whalers, and they are locked in Hartford through the year 2013 (Lang, 53-69). This lease makes it impossible for the Whalers to make money because even if they sell out the season, they will still lose seven million dollars a year. If the Whalers lose more than thirty million dollars in four year then the lease gives the Whalers an option of paying five million dollars to leave Hartford or paying ten million dollars to stay in Hartford. Which one do you think Peter Karmanos, the owner of the Whalers, will choose.

Now the Hartford Whalers are at a major crossroad in their twenty-five year history. This may be a bigger disaster than the Hartford Civic Center roof collapse because the Whalers may not be in Connecticut in two years. Peter Karmanos has only seen finical hardship since he bought the team in 1994 and he inherited a terrible lease agreement from Richard Gordon at the Civic Center. The Hartford Whalers lost twenty million dollars in the 1995-96 season and eleven and a half million dollars in the 1994-95 season for a total of 31.5 million dollars in only two years (Jacobs, 1). The Whalers have not made a profit since the 1990-91 season (Arace 1+). The Whalers current lease is so bad that even if the they sell out every game of the season, they will still lose seven million dollars a year. The Whalers had a season ticket drive last April to double their season ticket base and it only was partially successful. Many teams in the NHL have recently received new arenas that can generate a lot of revenue for their hockey team (Swift & Arace 1+). The state of Connecticut must go all out to save the Whalers, our only major league franchise, by giving them a very attractive lease at the Hartford Civic Center and the Whalers need a new arena for the 2002-03 season that can produce a lot of revenue.

The first step toward solving the Whalers’ problems is changing the Civic Center lease. The state must no longer allow private companies to run the Civic Center. The private companies are taking all of the revenue away from the Whalers and they are not even making money so the state of Connecticut must run the Civic Center. Ogden Entertainment Services, Service America Corporation, and Kinney Systems will no longer be allowed to run the service that they run. The state will pay all of the salaries of the employees and the maintenance costs of the Coliseum. The state will only pay 500,000 dollars a year to lease the Civic Center from the city of Hartford. It will cost the state about twenty million dollars a year to run the Coliseum but the state will be able to keep all revenue form the Civic Center that does not go to the Whalers. Now that the private companies are out of the way, it will open up revenue streams for the Whalers and eliminate an endless cycle operating in the red (Swift 3).

The Whalers need a new lease at the Civic Center which is similar to a lease they would get if the Whalers moved to a different city and similar to other teams in the NHL. They will continue to get all ice for free. The Whalers will receive one hundred percent of the revenue generated during their games from concessions and parking. These revenue streams are created only because the Whalers play at the Civic Center so they deserve this money. The Whalers are the only hockey team that plays at the Civic Center so people only see the board and ice advertisements when the Whalers play, therefore they should receive all of the revenue from advertisements along the boards and in the ice (Jacobs 1+). Most other NHL teams receive seventy percent of all other ads around their coliseums so the Whalers will get the same treatment at the Civic Center. The Whalers should receive seventy percent of the revenue from luxury boxes and the coliseum club which is what most NHL teams receive. All of this will give the Whalers an addition eight to ten million dollars in revenue each year and allow them to make a profit at the Civic Center until a new arena can be built in Hartford (Swift 1+). In additional, the Whalers will pay the state 9.25 million dollars which is twenty five million minus one-half of their loses, 31.5 million dollars, to complete the sale of the Whalers (Jacobs 1+).

The Hartford Civic Center has become obsolete to support an NHL franchise. Right now, no one is making money on the Civic Center except the city of Hartford, and even if the Whalers get the new lease agreement stated above, the state of Connecticut will lose money as a result of running the Civic Center. The Whalers need a new arena in Hartford that will allow the Whalers and a private corporation running the new arena to make money. Nineteen of twenty six NHL teams have first class arenas or will have one within the next two years. A first class arena is defined as one which has the following things: At least 17,000 seats for general seating, at least one hundred luxury boxes, club seating which seats at least five hundred people, concession stands at every given point around the arena, a food court, at least one fancy restaurant, and a huge parking garage. The Whalers need an arena that seats over 18,000 people plus all of the other things listed above. Most NHL teams receive seventy percent of the revenue created from the arena in addition to ticket sales so the Whalers should get the same thing in their new arena. For example, the Montreal Canadiens can receive up to 150 million dollars in revenue per year from just the luxury boxes in the new Molson Centre. This is enough money for five NHL teams pay rolls. In addition, a new arena will have so many new revenue streams that both the Whalers and a private company running the arena will be able to make money. This is what has happened in other NHL cities when new arenas have been built (Swift & Arace 1+). In order to guarantee this new arena will have a main tenant, the Whalers will sign a lease to play their through the year 2020.

Saving the Whalers is extremely important for the state of Connecticut. The Whalers provide this state with an identity because they cause the name Hartford to be discussed by sports fans all across North America. How often are the cities of Quebec and Winnipeg mentioned on the news or discussed by sports fans now that they lost their NHL teams? Not often. If the Whalers move, Hartford will become a stop between New York and Boston without its own identity. The Whalers help Connecticut s economy directly and indirectly. The Whalers provide jobs for within their organization. According to their media guide, they have over forty people working in the Whalers offices. In addition, about half of the players live in Connecticut and they make a lot of money that they spend on houses, cars, and other stuff to help Connecticut s economy. When people go to Whalers games, they shop and eat in downtown stores and restaurants and this helps boost the economy of downtown Hartford. The effects of the Whalers leaving Connecticut were shown during the NHL lockout in 1994 and store owners lost a lot of revenue. In the past few years Hartford has been trying to get an NFL team. If the Whalers leave Connecticut, it will show the NFL that Connecticut cannot support a major league franchise so they will put not a team here. On the other hand, if the state saves the Whalers, it will show the NFL that this state can support a major league franchise (Arace 1+).

Most importantly, the Whalers are active in community service in this state. The Hartford Whalers Foundation supports charitable programs in Connecticut that help inner city youths, save children s lives, and improve the quality of life. The UConn Children s Cancer fund is the main charity the Whalers support. It helps kids with cancer and last year they raise over 4.5 million dollars for this fund. In addition, the players go to the hospital to visit these kids to try to cheer them up. The Student Athlete Leadership Program teaches high school athletes the importance of being good role models. In addition, this program prevents drug and alcohol abuse. At the Tip A Whaler dinner, the players serve food to anyone who comes and the tips they receive go to charity. The Enfield Junior Whalers is junior B hockey team and it develops the top hockey players in Southern New England under the age of twenty for Division I college hockey. Street Whalers Street Hockey Program teaches inner city kids how to play street hockey and provides them with equipment. For Kids Sake teaches inner city kids how to ice skate and it provides equipment. If Connecticut does not go all out to save the Whalers then we will lose all of this excellent community service (Hartford Whalers).

John Rowland, the governor of Connecticut, cannot continue the take it or leave it attitude toward the Whalers because pretty soon the Whalers just may leave it. The Whalers currently have the worst lease of any team in the NHL at the Civic Center plus this arena is the smallest in the NHL. The Whalers need to be treated like a major league franchise so they deserve the same treatment as any other NHL team, like the Montreal Canadiens. Revenue from the Civic Center is necessary for the Whalers to make a profit so they won t be gone in two years even though they get a lot of fan support. New arenas are popping up all over the NHL so the Whalers need one compete with these teams without bankrupting the state or themselves. If the Whalers leave the state will be losing a lot because we will no longer have our own major league team and we will probably never get another one. In addition, all of the community service the Whalers provide will be gone. It is now time to end political battles conservatives, liberals, and the Whalers and they should just team up to do what is right or else the Whalers will be gone in two years.