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.