Q&A with Coyotes co-owners George Gosbee and Anthony LeBlanc
GLENDALE, Ariz. — Coyotes co-owner Anthony LeBlanc set off an array of reactions recently when he told The Arizona Republic that he wasn’t happy with attendance over the first three months of the season.
Some locals thought he was blaming the fans. Some outsiders cited it as proof that hockey will not work in the desert. A chorus of semi-informed analysts assumed he was planting the seeds for the team’s inevitable move in five years, when it can exercise an out-clause by reaching $50 million in losses.
The speculation escalated from there, fueled mainly by a lack of details or sound analysis.
But with the New Year dawning after Tuesday night’s 4-3 overtime win over the Edmonton Oilers before a second straight packed house at Jobing.com Arena — and with 14 of the team’s final 20 games before the Olympic break to be played at home — LeBlanc and co-owner George Gosbee are eyeing better days for the franchise they purchased less than five months ago.
FOX Sports Arizona caught up with both owners on Tuesday to clarify the attendance comments and get the duo’s thoughts on an array of issues facing the team as 2014 begins.
FSAZ: Anthony, given the rampant speculation regarding your attendance comments, can you clarify what you meant?
LeBlanc: "First off, I should apologize if my comments were not taken in the manner in which they were intended. Those comments were an onus on us to do a better job. At the end of the day we have very high expectations for ourselves as an ownership group.
"But having said that, we are approaching 20 percent higher attendance than the last time we played games in the fall, which was the 2011-2012 season. We just want them to be up higher, and we’re working very hard to do just that."
FSAZ: There have been rumors that you are giving away an inordinate amount of complimentary tickets?
LeBlanc: "Have there been games where we have comped a fair amount of tickets? Absolutely. We went into this expecting comps for some games, but we also had the expectation that the comps would average out exactly where we agreed to with the City of Glendale, and that is still what we anticipate. I can’t tell you the exact number because that is confidential information, but our average number of comp tickets is substantially below the average being bandied about."
Gosbee: "I’m not sure where this giving away huge numbers of tickets rumor has started, but it’s less than in any seasons past. That’s the way things used to be done around here a while ago, but to be honest, there’s no incentive now. You used to have to reach the 14,000 per game benchmark for the league’s revenue sharing, but that’s not the case any more. The league changed that.
"Our owners aren’t even giving away tickets to friends. We instituted this culture where if you want tickets, you can go buy them and then give them away. That’s the culture that we set. We don’t want to do what they did in the past."
FSAZ: Attendance has historically lagged in the months of October, November and December here. Your group didn’t take over the club until August. How much did that late start impact your ability to alter history?
LeBlanc: "I don’t want to put ourselves in a situation where we are making excuses but we started this long process probably two to three months later than our business plan anticipated.
"Despite that, we will finish the first half of the calendar year with substantially higher attendance than the first half of the last year we had fall games. Our goal is to average 15,000 for this year even though, quite frankly, that was the model we set for next year, not this year."
FSAZ: The City of Glendale recently reported about a $1.6 million loss in the Coyotes deal for the quarter. Was that in any way surprising or misleading?
LeBlanc: "I think it is somewhat misleading because it doesn’t include all of the parking revenue and the supplemental funds that will go into escrow that we put into place to cover the city because those details haven’t been provided yet. Those numbers also don’t include any form of sales tax. And we are getting ready to announce another major concert in a couple of weeks, which means huge revenue for the city.
Gosbee: "We went into this saying we were going to do three years of losses, so if we’re looking at that after a couple of months, no it’s not concerning and it’s not surprising. I’ve got to tell you that I’ve never gone into a business deal before where you could look at six different revenue drivers and every single one of them is working. We were hoping that three out of six would work; we have all six cylinders firing, and it’s a great feeling."
FSAZ: Has parking revenue made an impact?
LeBlanc: "From our perspective, parking revenue is coming in line with what we budgeted. There is a lag between the games and the reporting of parking revenue to the city — and an even bigger lag in the reporting of supplementary fund money going to escrow for the city. That number will not be reported until the end of the year, and that’s $1.50 per ticket. That’s upwards of a million dollars."
FSAZ: George, you have said that corporate sponsorships and suite sales are up. Can you provide any tangible evidence or numbers?
Gosbee: It’s up over 50 percent from last year. Everything is up quite dramatically, and it’s all pure numbers now. There’s nothing misleading about the numbers that we’re printing."
FSAZ: Did the daily drama of the sale prepare you for the drama of the first three months of the season or has it surprised you? In three months, the team has had a scorching hot start fueled by uncharacteristically high offensive numbers, your captain contracted a rare illness, your goalie has been involved in three of the most unusual goals in NHL history, your blue line has been a revolving door of injuries, and you play in a conference where the top eight teams would all enjoy home-ice advantage if they played in the Eastern Conference.
LeBlanc: Compared to the process of dealing with high-powered lawyers and municipal governments (laughs)? Even though this has been a bizarre season, this is the fun part. This is the part we all enjoy — the part we were all looking forward to."
FSAZ: Back to attendance, do you think these back-to-back sellouts are a harbinger of what’s to come? Do you expect attendance to jump?
LeBlanc: "I hope so. I know we broke single-game suite record again (Tuesday against Edmonton) after we just set it against Chicago.
"To see these two games, which we didn’t budget to sell out — we thought they’d sell well, but not sell out — actually sell out is very encouraging. What’s the old A-team saying? ‘I love it when a plan comes together.’
"I think a multitude of things are driving this. I hate to reflect back on the last four years but finally, people have realized it’s behind us and it’s safe to get behind this team.
"We haven’t played as well as we’d like, at least on the score sheet, but we’re still an exciting team to watch. We’re well-coached, well-managed, and we are a winning franchise in a very tough conference.
"We’ve hired some good people to the staff at the upper management level. We have a solid sales and marketing team and for the first time in a long time, they have been able to go out and sell this team unencumbered."
FSAZ: George, you had said in the past that the team does not need an attendance increase to make it? Is that accurate?
Gosbee: "We’d all like to see a ticket spike, but there are other revenue drivers in sports now. Corporate sponsors — the TV deal in Canada helped us out a whole lot. There are a lot of things that work now in professional sports, especially in a pure revenue sharing model that allows a small market team to not be so reliant on ticket sales any more. That was one of the biggest drivers of us buying the team, that it would not be so reliant on ticket sales any more. It was buying 1/30th of the NHL and managing the team in Phoenix. All you need to do is look at the economics of sports. The whole game has changed.
"That said, our No. 1 focus now is getting people in the building, because all of those other areas are set. It helps revenue and it’s nice to play in front of a full house, but it’s not the biggest driver in the sport any more."
FSAZ: How much will the new Canadian TV deal and increased revenue sharing impact your bottom line?
LeBlanc: "It’s significant. We’ve said all along that we weren’t just buying the Phoenix Coyotes, we were buying buying 1/30th of the NHL and it has nothing but upside, when you look at that TV deal, league revenues being up and other factors.
"(Wednesday’s) Winter Classic in Michigan will have over 100,000 people in the stadium. It just shows what kind of growth this league can have."
FSAZ: You are already spending more than you expected on payroll due to a fluid offseason market? Can the team add payroll as it makes new deals, or is it more prudent to hold the line for now until revenue increases?
Gosbee: "We’re opportunity driven. We’re not shy about spending some money. The problem is a lot of teams are right at the salary cap, a lot more than you’ve seen in a long, long time, so we’ll see what happens, but we’re in a very, very good position to seize on some opportunities if they come up."
FSAZ: What is your take on the team’s play thus far? Impressed, disappointed, or right where you thought it would be?
LeBlanc: "The team is on track to be north of 100 points. To me, a 100-plus point season is a very respectful season. If you’d have told me at the start of the season we’d be on pace for 100-plus points, I’d have been ecstatic.
"At the same time, we want to be better. If we get 105 points, we’ll ask ‘why didn’t we hit 110?’ But if the season ended today we’d be in the playoffs despite some tough injuries and tough circumstances. It just shows the character of this team.
"We’ve been without our captain for a while now, but we’re going to get him back, sooner rather than later. Other than (Zbynek) Michalek, we’re relatively healthy. Mike Smith is showing flashes of the season he had two years ago, Mike Ribeiro is definitely showing the offensive talent that made Don Maloney want him here, and our defense is back to playing the way Dave Tippett wants a defense to play. So we’re very optimistic."