Friday, February 3, 2017

Between Tickets, Travel and Technology, Business Side of ECHL a Balancing Act

Travel to destinations like Glens Falls, NY weigh on finances.
(Credit: Steve Conner)
Today's article on the economics of being an ECHL team finishes off ECHL Week on 100 Degree Hockey. Thank you to everyone for reading and to all the folks in Boise I spoke with for these stories. I enjoyed my time in Idaho immensely and plan to go back.

At the end of the day, hockey might be a ton of fun but it is still a business. Businesses have to make money to stick around. The man behind the numbers in Idaho is Steelheads president Eric Trapp. The man they call Trapper has been with the Steelheads for over a decade with previous stops in other minor league sports in Boise as well.

"We obviously want to make a profit at the end," says Trapp. "We take pride in the success on the ice and winning championships. A large part of what we take pride in is that we provide entertainment for downtown Boise. Our success is based on providing quality entertainment to the fans first of all. If we do that, the revenues follow."

Providing quality entertainment is important because the lion's share of revenues come from ticket sales. For some teams, this can be over 80% of annual revenues. After tickets, sponsorships are next up on the list. That's things like the 'Plucker's Power Play' here in Cedar Park or the 'Bud Light Steelheads Hockey Show' in Boise. After sponsorships, merchandise rakes in the next most. Parking is a big deal for many teams, but the Steelheads don't charge for parking as they don't have a lot in downtown. Concessions fall further down the list.

In terms of what drives the revenues, Trapp doesn't believe the product on the ice is as important as the overall game atmosphere. "Wins and losses aren’t as much a driver as they are in major college athletics and the major leagues. In the minors, the revenue is driven by the quality of entertainment."

Eric Trapp
He adds, "It helps to have a winning team but there are plenty of teams in minor league sports that haven’t been consistent but continue to have revenues because of the entertainment value they provide."

Some of the things we discussed on Monday around fan engagement are part of what makes Steelheads games such a 'good time' according to their fans. Idaho has shifted their internal resources to doing more content creation and fan engagement in-house, as have many businesses outside of the sports world as well.

"In the past, you have to rely on mass media to get the message out but now we have these direct consumers who come to engage and have actively said I want to follow your brand. Now we can directly give them our content and they can follow the brand directly through our message. We don’t have to rely on placing advertising or earned media, which you relied on so heavily in the past."

The same technology that has made social media possible has also made it easier to create that content for smaller teams.

"With the technology on the phone and the digital age, it makes it a lot easier to edit and put stuff together yourself. In the old days, you had to take forever to edit something. Now the technology allows small organizations like us to do things that the NHL teams used to do in the analog days with a whole staff of people. It gives us the opportunity to have someone on staff to create that content and push it out without it being as labor intensive as it used to be. We can deliver high quality content we create ourselves and it’s a better experience for the fans."

This means the Steelheads and other minor league teams can create quick GIFs of scoring plays and share them on social or build end of period summary graphics from templates in a few clicks. This helps to create a connected experience for those who follow on social media and let the fans participate in the game in new ways that weren't available even five years ago. This drives greater attendance and overall connection to the team.

A trip to Norfolk, VA, surely adds cost.
On the cost side of things, Trapp says he stays out of the way on decisions relating to players. There is a salary cap in the ECHL, so there is a known budget there. "I hired a coach, and I’ll get out of the way."

Another expense is travel. The Steelheads are in the western conference, which means they are a bit on an island. The team flies everywhere except for Salt Lake City, Utah, which is still done by bus. Trapp notes that Neil Graham gets to use this as a bit of a recruiting tool at times. The team buys all of its travel in the summer and has worked with the league to ensure that they can make efficient trips to far flung destinations, such as playing a three-game set in Alaska instead of returning every few weeks for just one game. Long time equipment manager Khris Bestel has even reconfigured the Steelheads' baggage so that they don't get hit with any oversized bag fees.

The travel expenses can get hairy but Trapp wouldn't trade the location for anything. "Boise itself is a great town and community. It’s a positive for us to be here in the market where we’re at. It’s a great downtown with a lot going on. When people come to a Steelheads game, it’s not just the game. They’re making a night of it, having dinner and drinks with family and friends before and after the game."

If you missed any of ECHL Week, take a look here for complete coverage.

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