THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 1, 1997 TAG: 9701010249
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ED MILLER, STAFF WRITER
DATELINE: HARTFORD, CONN. LENGTH: 198 lines
Hartford, Conn., is the only U.S. city with an NHL franchise but no other major league team. If Hampton Roads is successful, it would be the second. Hartford, however, soon might be without the Whalers, who are threatening to leave without a new arena.
In 1978, three years after the Hartford Civic Center was built, the roof collapsed under the weight of a major snowfall. The city's hockey team, then known as the New England Whalers, moved 30 miles north to Springfield, Mass., while repairs were made.
Almost 20 years later, the roof is again threatening to cave in on hockey in Hartford. This time, the culprit is the heavy debt accumulated by the Whalers in recent years and the even heavier debt it would take to build the new arena the team's owner has demanded.
So even as the Whalers skate along in third place in the Northeast Division, with an arena filled to 92 percent capacity, Connecticut residents face a question, the same one facing Hampton Roads as George Shinn attempts to bring a National Hockey League team to Norfolk:
Is hockey worth it? Are the benefits of having an NHL team worth millions in taxpayer subsidies?
In Hartford, where hockey is much more a part of the culture than in Hampton Roads, many don't think so.
``Hockey is part of my life. It's ingrained. To lose it would be terrible,'' said Curt Jensen, sports marketing manager for the Greater Hartford Sports Commission. ``But the economics of team free agency, the average guy on the street can't understand. The feeling I'm getting from people is: enough is enough. You're getting people ready to pack the truck for them.''
In December, team officials told Gov. John G. Rowland that if the state does not build a new, heavily taxpayer-financed arena - at a cost of up to $240 million - the Whalers will be forced to move. The Whalers are also requesting virtually all of the operating revenue from the building.
It's not the first time the Whalers have had their hands out.
In 1995, team officials said they needed to expand their season-ticket base. Business and political leaders held a drive that sold 9,500 season tickets in a month.
Since 1993, the Connecticut Development Authority, a quasi-public economic development agency, has spent millions on the Whalers. The CDA loses $1.4 million per year on the deals, and could lose more if the Whalers leave, according to Tony Bottelho, CDA senior vice president.
Despite the ticket drive and the CDA support, the Whalers still bleed red ink. The team lost $20 million last season and is expected to lose $14 million this season.
Why can't the Whalers make ends meet? What are the implications for Hampton Roads, which, like Hartford, would be an NHL-only town? Right now, Hartford is the only U.S. city with an NHL franchise but no other major league team.
There are some similarities between the markets, but just as many differences. Still, for Hampton Roads residents, Hartford's story provides some perspective on the economics of modern-day major league sports.
Hartford's biggest problem may be its size. The city has just 124,000 residents, the region about 850,000.
With 1.6 million people, Hampton Roads is nearly twice as large. But while the city of Hartford is economically distressed, greater Hartford is more affluent than Hampton Roads, and has more large corporations. United Technologies, Aetna Life & Casualty and ITT Hartford Group - all in the top 100 of the Fortune 500 - call Hartford home. A strong business base is considered a key to selling tickets and luxury suites.
Hartford is hurt not only by its size, but by its location. With New York City 90 miles in one direction and Boston 90 miles in another, Hartford is land-locked, making it difficult to ``grow'' its fan base. Venture out of the region in either direction, and Whalers fans give way to Rangers and Bruins fans.
So while Hartford appears to be a cozy, one-sport town, it's actually part of a huge region with 14 major league teams. The New York City area, 110 miles to the southwest, has nine NBA, NHL, NFL and baseball teams; Boston, 100 miles in the other direction, has four teams.
``Our owner said that when he bought the Whalers, he thought he bought the Green Bay Packers,'' said Lou Beer, business consultant for the Whalers. ``Instead, he bought the L.A. Clippers.''
The spillover from Boston and New York is damaging. All 82 Bruins games are televised in Hartford, while only 70 Whalers games are carried, Beer said. About half the Rangers games are also shown.
Because the TV market is so small, the Whalers receive only about $1 million annually in local TV revenue. The Whalers claim most NHL teams earn at least $5 million a year in TV revenue, and that the New York Islanders receive around $11 million a year.
Unlike Hartford, a team in Hampton Roads would face no competition from other major league sports. But like Hartford, Hampton Roads is a small TV market, and revenue from a TV deal could also be below the league average. Hartford's TV market ranks 27th nationally; the Hampton Roads TV market ranks 40th.
A small city, Hartford also has a small arena. With a capacity of 14,500, the Hartford Civic Center is the smallest building in the NHL.
It's an outdated building, attached to a dowdy downtown mall. Originally built to hold 10,000, the arena's seating was increased after the roof collapsed.
The problem is, although 4,500 seats were added, the width of the concourse remained the same. As a result, when crowds are large, walking on the concourse between periods is like driving in rush-hour traffic. Long lines often form for the inadequate number of bathrooms and concession stands.
While the arena is a problem, the real killer is the deal the Whalers have with the CDA. Essentially, the Whalers are in such deep hock to the agency that they never see most of the revenue from the arena. Instead, it goes to the CDA, and subcontractors who run the building.
The CDA is self-supporting. It issues bonds, and repays them from its own revenues, Bottelho said. It receives some money from the state, and state funds would be used if the CDA defaulted on its obligations.
Over the last three years, the CDA, with the backing of state officials, has been very generous to the Whalers. The authority has issued around $60 million in bonds to finance deals relating to the Whalers.
In 1993, the CDA took over the Civic Center from the city of Hartford. In 1994, the CDA bought the Whalers from Richard Gordon, then quickly sold the team to current owner Peter Karmanos for the same amount, underwriting $25.5 million of the $47.5 million purchase price.
Karmanos agreed to stay four years, through the 1997-98 season - and can then move the team only if the Whalers have lost at least $30 million, a figure they already have exceeded.
It's been a bad deal for the CDA, but not much better for the Whalers. To repay its obligations, the CDA takes a portion of money from skyboxes, concessions and parking. Subcontractors get a portion of that money also. The Whalers would get a share of the money only if the arena broke even from all events held there.
Because the arena does not break even, the Whalers get nothing. The team's only sources of revenue are ticket sales, its TV deal, and some advertising and promotions, Beer said.
The CDA could rewrite its deal with the Whalers, and turn over between $6 million and $8 million in arena revenue to the team.
``If we do that, we lose more,'' Bottelho said.
And even if the CDA turned over the money, the Whalers still wouldn't break even.
The only long-term solution, team officials say, is to build a new arena, complete with the luxury suites that are a key source of revenue for other teams.
The Civic Center has 45 luxury suites, added when the arena was upgraded after the roof collapsed. The suites are at rafter level, however, and the occupancy rate is just 80 percent. Luxury suites in new arenas are located much lower, providing a better view.
A new arena would be a boon to the Whalers, but selling taxpayers on the idea could be difficult. Hartford is the nation's eighth-poorest city, with a high crime rate and poor schools. For many, spending public money on an arena is hard to justify.
``It would be a hard sell,'' said Marilyn Rosetti, president of a citizens group, Hartford Areas Rally Together. ``The issues here are education and jobs.''
About 60 percent of Hartford's population is either black or Latino. Selling those residents on hockey may be difficult, too.
``There are other critical needs and priorities that must be compromised,'' said Larry Charles, director of One/Chane, an economic development organization in distressed North Hartford. ``If the Whalers left this city there would be a very minimal impact on the minorities of this city.''
Although many in the business community would like to keep the Whalers, others sound ready to let them go.
``We're not going to be held hostage,'' said Jensen, from the Greater Hartford sports commission. ``The business community isn't going to be held hostage. We're going to make prudent business decisions.''
The prudent decision, many economists say, would be to let the team leave. Even Beer, from the Whalers, concedes that the cost of having a major league team may exceed the economic benefits to the region.
``We have never tried to make the argument that this is some sort of economic bonanza,'' Beer said. ``People have to decide if they think it's worth it.''
Some fans seem to think the Whalers are as good as gone. If Karmanos can't get an arena deal, he's said he would like to move his team next year, rather than play a lame-duck season. Investors from other cities call him daily, he said.
If they move, the Whalers likely will land in one of the nine cities vying for an NHL expansion team. The NHL is expected to award two to four franchises, and the Whalers probably will go to one of the cities that does not get a franchise. Hampton Roads is not considered a strong candidate for the Whalers because there is no suitable arena.
Walking on the crowded concourse between periods at a recent game, one fan complained out loud about the old arena.
``This place stinks,'' he said. ``They ought to take a stick of dynamite and blow it up.''
``Don't worry,'' his friend said. ``This is the last year.''
TOMORROW: George Shinn, the man behind Hampton Roads' NHL expansion efforts, has his hands full in Charlotte. Shinn, owner of the NBA Charlotte Hornets, wants the city fo help him build a new downtown arena to replace the Charlotte Coliseum, which opened in 1988. ILLUSTRATION: Color photo
DOUGLAS HEALEY
The Whalers play at Hartford Civic Center, smallest building in the
NHL. The team wants the state to build a new arena.
Photos
Peter Karmanos, Whalers owner
ASSOCIATED PRESS
Although 4,500 seats were added to the Hartford Civic Center during
renovations after its roof collapsed, the width of its concourse
remained the same. As a result, when crowds are large, walking on
the concourse is like driving in rush-hour traffic. Long lines often
form for the inadequate number of bathrooms and concession stands.
KEYWORDS: HOCKEY HARTFORD CONNECTICUT