Aquilini’s interest in selling could hold Canucks back on the ice long-term

The Canucks could be getting new owners sooner than expected.

With on-ice performance declining over the past five years, the Canucks franchise has suffered a decline in both ticket prices and attendance; a scary trend for any team. After factoring in a struggling Canadian dollar, the Aquilinis are in a tough situation with the state of the franchise.

Jason Botchford of the Vancouver Province reported earlier this week that the Aquilllinis are going to get a valuation of the franchise, which it has been rumoured they are looking to sell for a couple of years. There are a lot of things working against the business side of the Canucks right now, and the Aquilinis might feel it is time to cash in on the franchise now before the franchise loses too much value. The franchise that was valued at $800 million USD in 2014 by Forbes is not growing at the same extent that it was a few years ago.

When it comes to ticketing, the Canucks have seen a strong decline from their 2010-11 season to now. Per, the value of Canucks tickets in 2014-15 were a tad over $51 cheaper than tickets in 2010-11, and around $26 cheaper than tickets in 2013-14. Attendance last season was the lowest it had been in the past five years, with Rogers Arena only being filled to 98.9% capacity on average. While it doesn’t seem like much of a hit, when you factor in cheaper tickets on average, the yearly value for Canucks tickets were down $40.91 million compared to 2010-11, or $990,000 per game. While that was during the Canucks’ most successful season, it is a trend that has continued every year. Compared to the lockout shortened season, the team is down $540,000 per game in ticket value. While the 2013-14 ticketing information is skewed due to the Heritage Classic, it is safe to say the Canucks were still declining that year.

From a business perspective, it is a tough trend to deal with and can explain why management is focused on making the playoffs every year rather than full on rebuilding. It also helps explain the direction in which Linden, Benning, and the rest of the management team are taking, as they brought in players that will earn fan support even through difficult losses. These moves both help maximize the value of the franchise in the short term, while potentially harming it in the long run.

Also, this summer it was reported that Mike Gillis asked to rebuild in 2013, but was shot down. For owners looking to stick with a team for the long run, it would make more sense to take a hit in order to get back to the success they have when winning. However, for owners looking for a short term gain, pushing for the playoffs makes more sense. If the Aquilinis are really contemplating selling, then they would not want to rebuild. Instead, they would opt for pushing for the playoffs.

If there is anything more disturbing than the above for the Aquilinis, it is the fact that the Canucks failed to sell out in their home opener this year, making it the first time in over 10 years that they have failed to do so. Out of the 20 other teams that have had their home opener, only the New Jersey Devils and New York Islanders failed to sell out their openers.

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Furthermore, there may not be a better time to sell a franchise than now. There are a number of potential owners who want to dip their feet into the NHL market, and with the NHL announcing there is no planned expansion for the 2016-17 season, the threat of a new team entering the market is none for at least another season. That, and the fact that the rumoured expansion fee is $500 million will help persuade some prospective owners into trying to find a current team to buy if they are not concerned about location.

Quite possibly one of the most overlooked aspects in the direction a team is heading on ice is the ownership group. When you look at a franchise like the Buffalo Sabres, who were purchased in 2011 by Terry Pegula, you can see the impact an owner has on a team. Pegula stated that he wants to bring a cup to the Sabres, and that is the sole purpose of the franchise now. The Sabres traded a few years of poor on-ice product in exchange for a winning franchise. While they are working towards the latter, they have been clear throughout the entire process with their fans. The fans, in turn, bought into the plan in the hopes of reaping the rewards of a successful franchise.

Given the path the Canucks have taken in recent years, it makes sense that the Aquilinis are considering selling the franchise. It could mean more years of being a fringe playoff team rather than rebuilding more aggressively. However, fresh owners would be a welcoming and invigorating change to the organization, especially one committed to winning like Pegula.

  • Buula

    It makes sense that they are looking to sell the team because its value has appreciated significantly since they bought it, at the same time as the cash flow has been declining steadily.

    The Aquilinis aren’t an old money family. They are worth a lot on paper, but their net worth is tied up in assets. Remember, they originally tried to buy the team as part of a 3 member consortium, but then found a way to do the deal themselves, likely tying up a lot of their assets in the process. If selling now would get them a billion Canadian, why wouldn’t they seriously explore it.

    This also helps explain why so many player contracts are set to expire in 2017/18 — allowing a new owner to shape the team however he wants without many constraints.

  • Buula

    We should just relocate- its obvious the city dose not appreciate what the canucks have done for the city.

    Who would take us though ? Quebec City i am sure.

    Lets pack up and move. Enough of this.

    Lets go Vancouver Canucks ! I will cheer for you no matter where you are.This City only supports a winner , we have struggled but we will wib=n the Superbowl one day. You watch and see NHL !!!

    • Tyler Horsfall

      Excellence should always be demanded. The celebration of mediocrity is not a virtue but a sickness the poisons all hockey fandoms past the Rockies.

      The Canucks have my interest but they don’t get to be celebrated for icing anything less than a winner.

  • andyg

    So you would like them to take a successful business and run it into the ground and then try to build it back up.

    It will never make sense from a business stand point to tank.

    • Tyler Horsfall

      If you are looking at it from a short term perspective (5 years), tanking doesn’t make sense. Long term perspective, it does.

      Sport is a unique industry, where in large markets the “drop” of a tank is actually fairly small, and the payoff from a higher quality team + deeper playoffs outweigh the losses in the long term.

        • Tyler Horsfall

          This article contains a fair bit of data that could be used to compute a “tanking break even analysis” using the time value of money.

          It says that the yearly value of Canucks tickets was down $41M (holy $#^@!) from 2010-11. Assign some arbitrary values to account for drops in concessions and swag sales and you’ll get an idea of the annualized “cost” of a rebuilding team.

          Just thinking through these numbers I think a 5 yr rebuild would only pay for itself if the team quickly made it to the finals and merchandise sales absolutely explode in addition to ticket prices reaching Maple Leaf levels… I’m inclined to conclude that a team makes more money just being competitive each year than it does going from bust to boom.

          • Buula

            I’m inclined to agree, although market size and culture would play a role as well.

            Also icing a team that usually makes it to the first round but no further you always have the chance that your goalie gets hot and make a good run.

          • Tyler Horsfall

            I’m inclined to agree, although market size and culture would play a role as well.

            Also icing a team that usually makes it to the first round but no further you always have the chance that your goalie gets hot and make a good run.

          • Tyler Horsfall

            Market Size and culture might help set a floor and ceiling for annual revenues.

            This $41M drop is pretty incredible when you think about it, because while it refers to revenues, I can’t really think of any expenses that would have significantly decreased in step with it, besides tax. So lots of this drop impacts the bottom line, and cash generated from operations. And that doesn’t count the severance paid out to G&T.

            2010/11 was a high point for team revenues, but if you guess that they’ve been clearing between $10M and $30M less per seasons since, they’ll need a few years equal to 2010/11 just to make up for what they’ve “lost” since then, and that’s without tanking.

  • Tyler Horsfall

    Pegula is a maniac and a bit of a joke. Made all his money off of fracking (which ironically is illegal in most of western NY as far as I remember) and was responsible for that debacle with Pat Lafontaine at the outset of his regime wasn’t he? Maybe we can get some crappy oil developer to buy the Canucks and run them into the ground.

  • Larionov18

    Aquilini’s have been good owners. The devil we know.We have had a lot of bad or under funded owners over the years. Not sure how many locals have the money to buy the Canucks. Hope its not another American.

  • Buula

    I like the idea of local ownership. I don’t like the idea of ownership that doesn’t really have the money to properly run an NHL franchise and feels compelled to interfere in hockey operations decisions as a result.

    As such, I have always been highly ambivalent about the Aquilinis.

    Maybe Jimmy Pattison wants to add something shiny to his business empire?

    • Tyler Horsfall

      I was pleasantly surprised by how the Aquilinis ran the team; hiring Gillis, exploring sleep and nutrition as ways to help give the team an edge, etc. These moves were bold and likely expensive.

      I don’t know how much they interfered in hockey operations, but you can understand why they might when the bottom line started dropping hard.

      Pattison would be a stable owner, but I don’t see him taking the risk of trying to make the team great when he could just keep the rink full and get a playoff series or two every year.

      Now, an owner like Mark Cuban would really make some noise.

  • Tyler Horsfall

    Pattison probably won’t be interested. He had a bad experience with the Vancouver Blazers — one of their young stars spent his signing bonus on a fast car & crashed it (sound like Luc Bourdain?)
    Only a few elite sports franchises make money. Owning a team is an ego thing. Maybe a tech billionaire from Seattle would buy out Aquilini.