Dan Gilbert isn't exactly a hockey enthusiast. But what the majority owner of the NBA Eastern Conference champion Cleveland Cavaliers lacks in the love of the sport, he makes up for in a passion for selling it.
His words are speeded by excitement as he asks if we've seen a video clip chronicling the legend of the mythical serpent that inspired the name of his latest majority-owned acquisition, the American Hockey League (AHL) Lake Erie Monsters. And his voice is tinged with regret that he's agreed to let Cavaliers/Monsters management supervise the team's marketing and game presentation.
"That's the part of the business I really enjoy and have experience with," the 44-year-old Gilbert says enthusiastically from the suburban Detroit headquarters of Quicken Loans, the online home-mortgage lender he founded and still chairs. The hands-off promise is even more difficult to keep because Gilbert is a hands-on guy, a man who encourages employees to phone or e-mail him about problems as seemingly trivial as overgrown landscaping obscuring the street numbers on a Quicken Loans sign.
But as the Monsters prepare for their home opener Oct. 6 at Quicken Loans Arena, there are those Clevelanders who wonder if even Gilbert's golden touch can keep a hockey team in town for good. The minor-league franchise is just the latest in a string of clubs to take the ice here in the last 78 years. Gilbert, of course, doesn't share their uncertainty. Just as he sees the current mortgage mess as "a blessing in disguise" for Quicken Loans to increase its market share as competitors are forced out of business, he now sees the AHL Cleveland Barons' departure after the 2005-2006 season as a chance to replace an arena tenant with a better organization of his own. And although he isn't looking for the Monsters to make money - a surprising revelation given his opportunistic attitude - he doesn't question its ability to turn a profit.
"Cleveland, the immediate surrounding area, the whole Lake Erie area, is just a die-hard sports area," he declares. "If you give them a great product that's fun for families at a reasonable price, I just don't see how it can come close to failing."
Despite the number of Cleveland hockey teams that have come and gone, history still gives Gilbert reason for optimism. The original Cleveland Barons - a charter member of the AHL - regularly drew 10,000-plus crowds to the Cleveland Arena until the late 1950s with a caliber of play that won 10 division titles and nine league championships.
But in 1972, Barons owner Nick Mileti shrunk the then-struggling Barons' market share by bringing his own competition to town: the World Hockey Association Cleveland Crusaders, a National Hockey League (NHL)-wannabe team he purchased after the NHL denied him a franchise. Mileti ended up moving the Barons to Jacksonville, Fla., in 1973, and a subsequent owner relocated the Crusaders to St. Paul, Minn., three years later.
A second incarnation of the Cleveland Barons, an NHL team that filled the city's professional hockey void the same year the Crusaders left town, was plagued by attendance problems, prompting future Cavaliers owners George and Gordon Gund to merge the franchise with their NHL Minnesota North Stars in 1978. In stark contrast, the International Hockey League Cleveland Lumberjacks drew more than 9,000 fans per game for three consecutive seasons and made the playoffs almost every year from their arrival in 1992 to their demise with the league in 2001.
"The crowds were up to 19,000 on Friday and Saturday nights," says Kerry Bubolz, Monsters president and Cavaliers/Quicken Loans Arena executive vice president of corporate sales, broadcasting and minor-league operations.
Bubolz and Cavaliers/Quicken Loans Arena President Len Komoroski, both of whom worked in Lumberjacks senior management, remembered the team's heydays after a third incarnation of the Cleveland Barons - this time an AHL franchise that served as a farm team for the NHL San Jose Sharks - took up residence at "The Q" in 2002.
"I don't want to say they had bad management," Bubolz says diplomatically of the Barons, which shared the same owners as the San Jose Sharks. "The San Jose Sharks' primary reason for operating the team here in Cleveland was to develop players for the NHL. Based on that objective, it was successful."
Yet he and Komoroski yearned "to operate a successful business on a profitable basis" - that meant transforming each game into an exciting event that consistently filled the arena with cheering fans.
According to Bubolz, it took a little convincing to get Gilbert and his Cavs minority owners to buy a hockey team after the Barons gave notice it wouldn't be renewing its arena lease. Gilbert rattles off some of the more obvious selling points: "We had the arena; we know how to fill it; we know how to do the ice."
Top-notch operations, marketing and sales staffs were already in place, and the 40 home games played each season would add value to permanent advertising signage and suites, the holders of which receive tickets to all events. The schedule also would provide 40 more opportunities to sell tickets, concessions and merchandise to legions of young hockey fans and their siblings - or more accurately, their parents.
"If you look at the numbers, youth hockey all around the Great Lakes is really strong," Gilbert says. "And a minor-league team would complement, not compete with, the existing sports scene in town."
Gilbert estimates he spent less than $10 million to purchase the rights to create the Lake Erie Monsters team. "I just don't know the exact number," he insists. "Compared to an NBA team, it's not a lot of money."
Bubolz and Komoroski spent the next four to five months in search of an NHL franchise that needed a farm team. Eventually, they inked an agreement with the Colorado Avalanche, a two-time Stanley Cup winner whose affiliation with the AHL Albany River Rats - a farm team it shared with the NHL Carolina Hurricanes - was about to expire.
Bubolz notes that the similarities between Gilbert and Avalanche owner Stan Kroenke made the match an attractive one. Kroenke, like Gilbert, owns an NBA team, the Denver Nuggets. And both men had instilled what Bubolz calls "a championship culture" in their respective organizations.
"The Avalanche's philosophy is that one of the best atmospheres to develop talent in is a winning [environment]," Komoroski says.
And to create it, Bubolz says many of the same presentation elements seen at Cavaliers games will be used. Fans will find activities such as face painting, temporary tattooing and poster making, for example, in the arena concourses. Inside, they'll watch a team-introduction spectacle that features players skating through a giant inflatable version of the Monsters logo and skits on scoreboard screens that poke fun at visiting players as they sit in the penalty box. While the NBA limits such antics, "there's almost no rules on some of the things you can do in minor-league hockey," Gilbert says with an ear-to-ear grin.
Popular Lumberjacks promotions will also be reinstated. Bubolz mentions Friday-night post-game skates; a trio of Sunday counterparts, where players join fans on the ice; and regulation high-school hockey games played before Monsters matches.
New marketing ploys include the SpokesMonsters, a group of fourth-, fifth- and sixth-graders loaded up with Monsters gear to hand out to their schoolmates; "Tour With the Monsters," five team practices and after-practice skates with players at community rinks; and open practices at the team's practice facility, IceLand in Strongsville.
The Cavaliers/Monsters organization has struck a deal with WKNR-AM, which will broadcast all home games. Twenty of the contests will also be carried on cable channel FSN Ohio, and an additional five to 10 contests may be available on an over-the-air channel - coverage of a minor-league team that hasn't been seen in this market since the late 1990s, according to Bubolz.
Gilbert is vague when asked how much has been spent on the new team since its acquisition. Bubolz reveals that a "mid-six-figure" amount was invested in building dedicated locker rooms and coaches' offices at IceLand, an amount split between the Monsters, the Avalanche and the Strongsville rink. Millions of dollars will also be spent compensating the 24 new hires whose sole job is selling the Monsters. And then there's the Avalanche's affiliation fee, which Bubolz describes as "a seven-figure commitment."
The investment is beginning to pay off. Most of the three rows of $60 "glass seats" around the arena ice, not to mention plenty of season ticket packages, have been sold. While some fans have complained about the pricing, Gilbert defends it. "We're not by any means on the high end," he says, referring to AHL teams in markets such as Chicago and Houston. According to Komoroski, most of the seats in the upper bowl are in fact priced at $10, the bottom end of the Monsters' scale.
"If you took 95 percent of the seats in the building, compared them to where we were with the Lumberjacks 10 years ago, and factored in 3 percent inflation, the prices are actually less," Bubolz asserts. "We were selling a lot of club seats at $22. Those same seats are now $26."
While Bubolz is clearly focused on meeting revenue-based goals - none of which he will divulge - Gilbert and Komoroski don't seem to be too interested in them. "Money follows," Gilbert says. "It doesn't lead." And when asked how he'll define the team's success, he answers with a question of his own: "Is Cleveland embracing the Monsters?"
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editorial@inside-business.com)