Here’s the big “meat” part of the “meeting,” in which the execs discuss how the ticket-price increases might help the on-ice product in the long term, and I discover that the franchise is losing MORE money than it was before we all endured the lockout. At the end, they discuss the plans for the new season-ticket holder website. Here’s the next part of the interview…
Question: What assurance can you give to fans that increasing season tickets will increase the possibility of the Kings spending big money on players when the opportunity comes up?
(Robtaille:) “Whatever money we’re making by increasing our ticket prices, we’re using it to make our business better. When you talk about getting players, when the time is right, the time is right, but the goal for us is to make our business better, and that will trickle to what we do with hockey and everything. The cap is going up and we have to give (Lombardi) the opportunity to get the guys when they’re ready.”
(Lombardi:) “You have to look at it a certain way. People might think, `Well, season-ticket prices are going up, so which free agents are you going to sign?’But, as I’ve always said about free agency, you don’t build your core with free agency; you add to your core. When I talk about our vision, and getting people to see it, it’s getting closer. But it’s like the Oakland A’s and the Yankees. We’re building it like the A’s but we want to finish it like the Yankees, and then keep our guys.
“We’re go through all this, and it’s not fun but we have to go through it. But when we go through it, we want to get rewarded. We don’t want our fans to say, `Well that’s not fun. We go through all the heartache.’ That’s part of integrating your business with your hockey model. On the hockey side, you can’t make decisions that are reactionary. That’s what is going to get you in trouble. So it’s like they’re saying here. What, we’re going to win the Cup and then raise prices five percent? That doesn’t make sense.
“What we’re confronting, it’s like when I talk to you about the age-distribution chart and the defensemen and the goalies. (The business people) are confronting their reality, which is that we’re in the second-biggest market in the country and our prices are (relatively low). Luc is saying, we want to be a good business. Well, a good business in L.A. has the potential to generate revenue and make it a viable business and compete with the big boys. It goes back to that statement: `We’re L.A. and we have to start acting like it.’ We need the product, no doubt about it, and that’s where the rub comes right now. It’s like saying, `Well, you’re 29th in the league.’ I can see where the back end is not that far away. How can we do this when we’re 29th in the league? Well, we can see where this is headed if this all comes together. We’re being proactive.”
(Robitaille:) “Look at two years from now, or whenever (Lombardi) goes to resign Kopitar and Johnson and all the young guys. In this new business, those young guys are making all the money. So you look at two years from now, when suddenly Dean has to sign all these guys, and we expect him to go get whoever is available, plus he needs to sign some defensemen, we need to be right there as a business, so that he has the opportunity to do that. We’re basically getting ready for our organization to be real good. That’s what we all need to do together.”
(Altieri:) “As Luc indicated, we don’t want to get good and then all of a sudden say, `OK, 25-percent increase.”’
Question: Because you know the perception, whether you agree with it or not, has been that in the past, the Kings haven’t been willing to spend what it takes?
(Lombardi:) “What you mention about the past.. This is a positive for me, what you see in this office. The business people and the hockey people were never across the ball from each other. Obviously I know that teams don’t make it based on nice offices, but what you’re seeing is that hockey is trying to stand alone (within AEG). That’s something I think, if planned properly in this marketplace, business and hockey can work together.
“Whereas in the past, with AEG, it was a monolith. You’ve got this now, and it’s the first time in the history of the Kings (under AEG), that the business and the hockey are standing alone. But you also have that AEG muscle. It turns AEG into an asset rather than a drag. That’s kind of what happens when you have these big monoliths owning sports teams. (The teams) can get consumed by it.”
(McGowan:) “We’re creating a hockey culture on the business side. We used to have a multi-event culture, because everyone who was working on hockey was also working on other AEG-related stuff.”
(Lombardi:) “It’s like your (McGowan’s) own situation before. You were working on tennis, golf, lacrosse and whatever. Now you’re just working on hockey.”
(Robitaille:) “We have people now who are going to bed thinking of the Kings and waking up thinking of the Kings. We have fan-development people and we’re getting out into the community more than ever. There are a lot of things that we’re doing and that’s what is important, we believe, for the future. It’s going to be very, very important to keep improving that.”
(McGowan:) “A lot of it started with the hiring of Luc, and we’re a year into that now. We’re really, we feel, set up with a good staff needed to run a great organization.”
(Robitaille:) “One thing that’s changed is, in the old days when people complained about the Kings, they wanted the Kings to sign those free agents when they were 32. In today’s game, your high salaries are (When players are) 23 and 24. When you look at our team, we need to make sure we’re ready for the future. This organization needs to be ready, and it’s very important that we set that up, to be ready. That’s just a fact. The game has changed and the model has changed totally.”
Question: Is the team making money? Losing money? Where are you on that?
(McGowan:) “We’re not making money. We’re losing money.”
Question: And that’s just on the Kings?
(Robitaille:) “Just on the Kings.”
Question: Significantly more than before? Better?
(Robitaille and McGowan, simultaneously:) “More.”
Question: More than before the lockout?
Question: Is that a concern?
(Robitaille:) “Yeah. It’s a concern because we’re here to make this business work.”
(McGowan:) “I think our response is to build the organization differently, to meet the reality that we’re losing more money than we did before the lockout, and what we can do about it. Some of the things we’ve been talking about are some of the things we can do about it. We’ve got to run a better business.”
(Altieri:) “It comes back to what Dean said when he first came on board. The first thing he said when he came on board was, `I’ve got to get an infrastructure in place.’ It’s the same thing here. We’re putting in place an infrastructure that we feel confident is going to rectify this issue.”
(McGowan:) “We can’t continue to operate the same way. We have radically changed the way the Kings operate, from a business perspective. We’re going to continue reshaping our business, on a regular basis, in order to get a core group of 60 to 70 people that spend 100 percent of their time on this franchise. That’s happening and it’s exciting.”
(Altieri:) “The best thing is, we have AEG’s full support. They want this and, again, we’re going to have that muscle to use when we need to use it.”
(McGowan:) “There are phenomenal business resources that we can use and tap into. It’s pretty great.”
(Robitaille:) “ To simplify it, Dean was hired to get us to the point where we can win the Stanley Cup. I was hired to get us to the point where we break even, or even make a little money. Trust me, we’re nowhere near that.”
Question: So the hope is that (these increases) will help contribute to solving that…
(Altieri:) “Contribute, yes. There aren’t a lot of revenue-growing opportunities in hockey right now, just by the nature of the sport. Unfortunately, we don’t have a multi-billion dollar TV deal. So we have to take the opportunities we do have and do the best we can to make the most of them.”
(McGowan:) “It’s all about navigating that fine line between our needs and what’s fair to our customers. That’s the biggest message, that we will never take for granted the passionate support we have. We’re amazed. These people live and breathe Kings, and we don’t want to disrespect that loyalty and passion in any way. So we’re trying to find that fine line.”
(Altieri:) “we know our fans aren’t going to be doing cartwheels when they see that their prices are going up, but what we want to do is communicate and let them know that they’re getting direct communication from us. We think we’ve done a good job of that already, but one thing we’re going to do is launch a season-ticket-holder website, which we will launch at about the same time they get this (renewal) information, around May 10.
“They will be able to manage their accounts. We have a ticket-exchange program, so that if you’re not going to the game, you can turn your ticket in and have it resold and recoup some of your investment that way. We have, `Ask the Kings,’ where you can communicate with us directly. Not only will you get a response from the organization, but in many cases, you’ll get a response direcly from Luc, and Luc will be managing that communication. He’s going to be able to access a lot of the feedback, comments and complaints that we’re getting, and respond directly to them in a blog form.”
(McGowan:) “It’s interactive and it’s real-time.”