After many months of deliberations, the National Hockey League (NHL) finally confirmed Las Vegas as the site of its 31st team last June. In doing so, it became the first North American major league to have a club based in the city, with NHL commissioner Gary Bettman calling the move "a tremendously exciting opportunity, not only for Las Vegas, but for the league as well”.
The effort to bring elite ice hockey to Las Vegas, which followed a major local ticket drive that saw more than 15,000 seat deposits snapped up in the early part of 2016, was spearheaded by Bill Foley, a billionaire businessman who made his fortune in finance and other ventures. Foley is now the principal owner of the Golden Knights franchise, with the Maloof family, who formerly owned the Houston Rockets and Sacramento Kings National Basketball Association (NBA) franchises, serving as minority investors.
Based at T-Mobile Arena, the US$375 million facility that opened just off Vegas’ famous Strip in April 2016, the Golden Knights officially opened for business on 1st March ahead of their league debut in October. A few days later, the team made their first player signing, bringing in junior free agent Reid Duke, and secured their first sponsorship agreement with Toyota.
On Monday, SportsPro caught up with Kerry Bubolz, who was brought in by Foley as the Golden Knights’ president in November and is now tasked with building out the franchise’s business operations after a 13-year stint at the Cleveland Cavaliers NBA team.
Bubolz, whose resume includes sales roles at the Carolina Hurricanes and Southwest Sports Group, owners of the Dallas Stars, explains what attracted him to the Las Vegas project, what it’s like building a pro sports franchise from scratch, and why the Golden Knights are doing all they can to lay down strong roots in the local community.
What particularly attracted you to this role with the Golden Knights?
Probably the first part of it is for the last few years I’d been thinking about the NHL and my passion for the league and the game. In terms of next steps and opportunities, that was something I was interested in pursuing. I just made it known amongst some of the people that I knew in the industry and the NHL and fortunately something came along last summer, in terms of the beginning of the process. I was excited to be a part of it and fortunate to have been chosen to lead the business side of the organisation.
What was the situation at the Golden Knights when you arrived? Was there much of a front office team to speak of?
Not significant. A lot of the hockey-related hires, from scouts to the team under [general manager] George McPhee - a lot of those hires were already in place. Most of the infrastructure on the business side was really in the ticket sales areas, just with the ticket drive and the ticket deposit campaign that they’d been working on. There was about ten people in place on that end, and then we had some other folks in marketing and sponsorships, but all in there was probably less than 20 that were part of the business team at that point.
What’s the workforce situation now?
We’ve still got quite a few positions to build out. We’ve hired most of our senior leadership team, from Nehme Abouzeid, who is our chief marketing officer, to Eric Tosi, who’s leading our communications group, to some of the other roles, some of which we haven’t announced but we’ve hired. We’ve hired our entire senior group and then we started to build out the rest of the teams underneath that. Right now we’re probably just north of 30 full-time on the business side and we’ll look to grow beyond that quite a bit over the next several months.
Have you had much help from within the league on that front?
The league has definitely been incredibly helpful and supportive in the process, and then we’ve also hired several people on a local basis. Nehme Abouzeid came over from the Wynn Hotel. He’d been in the marketplace here for 13 years and we felt that was important. We’ve also got several folks who we’ve hired over from the UFC that were available in the market through their ownership transition. Where it makes sense we’re hiring local people, in addition to people with industry experience.
Is there a blueprint for building a pro sports franchise from scratch?
I don’t know that there’s a specific blueprint but there are examples. Keep in mind, back in 2000, Columbus and Minnesota came into the NHL. Those were really the last two expansion teams in major professional sports here in the US. I was fortunate - I was actually working in Cleveland in the IHL [International Hockey League] in the late 90s when the Blue Jackets were coming in, so I got to see fairly close up some of the things that they were doing to get ready to launch their brand in 2000.
And then actually the guys in Minnesota, they wrote a book called How to bake an NHL franchise from scratch. It’s more about the hockey side of building an organisation but I’ve had a chance to read that book and I thought that was pretty good. But the rest of it really is just based on my own experiences.
We launched [the Cleveland Monsters] in the American Hockey League and I was at the beginning of the start of that franchise back in 2007. We also launched an NBA Development League team as part of our organisation in Cleveland, in Canton. Although they’re not to this scale, we had startup situations and so I’m just trying to apply some of the things I learned through those processes to what I know is important for a successful organisation at this level, which is making sure your local revenue streams are in a solid place.
The ticket drive initiated early last year was a resounding success and helped convince the NHL of Las Vegas’ viability as an ice hockey market. How would you assess local appetite for the sport?
It’s been one of the incredible, best surprises. I went through my due diligence. I’m familiar with ticket drives and other situations in other leagues, so that was the first question I asked: ‘How real is this ticket drive?’ I started to dig into the numbers - it was north of 15,000, approaching 16,000 in terms of deposits that were put down. But I wanted to see the make-up of those deposits and what I found through that process is that 93 per cent of all the tickets people had put deposits down on were between one and eight tickets, versus companies in the area buying large blocks of seats.
That was really exciting for me and then when we looked at the demographic of where those tickets were coming from, the vast majority were from local people and local companies. Again, that’s very important because the business, which is in its foundation right now and is very strong, is not built off of the expected 43 million visitors that are going to come to Las Vegas this year. It’s all built off the local community, so the pleasant surprise part of it was a) the strength of the numbers, and b) it wasn't the large casino companies, as an example, buying hundreds and hundreds of tickets to help artificially inflate the numbers.
We’re going to succeed or fail on a long-term basis based on how we build this brand locally and that’s where the vast majority of our effort is going to be.
Has the strength of that fanbase been reflected in initial merchandise sales?
It has. In all honesty, though, the core of the retail business is the jersey, and we will not have a jersey available to us until after the unveil of the league-wide jersey programme in June. So a lot of the product that is out there - a lot of the headwear and some of the apparel product - it’s good but honestly the strength is the jersey.
And then also we had been looking for a retail partner, which we are going to be announcing here shortly. Right now, as an example, even our team shop at T-Mobile is under construction as we’re building that out in a new, innovative look and feel. That will be unveiled to the marketplace shortly, along with the other things that we’re working on.
In terms of your marketing effort, who are you targeting?
First and foremost, we wanted to make sure that the local side of our business is strong. Again, the ticket effort and focus is really on the local community. With that being said, we are targeting certain products, meaning certain options, whether it be single-event suites and/or some other spaces in the building that we’re going to target towards that convention traveller or that leisure traveller who maybe looking at Vegas as a destination as they look towards their entertainment options next October.
I can tell you that the vast majority of teams in the NHL have reached out, looking at our market as a potential sponsor trip and/or within their fan clubs or booster clubs. They’re looking to come out to Vegas as part of that and then of course the Canadian teams in our league, just based on the number of Canadian travellers that are already coming to this market. We’re getting a tremendous amount of interest from those organisations as well.
But all of that, again, we look at as being additive not a driver to our business. We’re going to succeed or fail on a long-term basis based on how we build this brand locally and that’s where the vast majority of our effort is going to be.
That all speaks to the unique appeal of Las Vegas and why the city has become one of the world’s top tourism destinations. What’s interest been like from sponsors?
The first priority when we got on the ground here was to make sure that we put a lot of effort and energy around the largest local revenue stream and the most important leg of the stool, which is the ticketing side of our business. That’s what we did. Now we’ve been, on a parallel basis, focusing on finalising our broadcast partnerships, both radio and TV, which then create the full sponsorship platform.
We’ve been out into the market. We just recently announced a major partnership with Toyota. We’ve also got, through our partnership with the arena and the guys at AEG, eight founding partnerships that are already a part of the team as well. They’re significant national and even global brands. Once we finalise our broadcast partnerships, then we’ll really be able to attack the marketplace from a sponsorship end, even though we’ve been out there without our full portfolio of sponsorship assets.
Your owner Bill Foley has said he wants the franchise to be considered the ‘Rocky Mountain Golden Knights’ when it comes to building a regional broadcast footprint. What’s the thinking there?
If you look at the geography around the state of Nevada, first and foremost you’ve got the entire state of Nevada and Las Vegas is the most significant city, in terms of population, in the state. You’ve got that element. As you look at owning the state of Nevada, that’s the first priority. The second is, as you look at other markets, Utah - specifically Salt Lake City - which is in our market territory. But then as you start to look north you've got Wyoming, Idaho and Montana, which are significant areas in terms of geography that right now don’t have great connectivity to one particular NHL brand.
The guys in San Jose have done a nice job in expanding their region and coming over into areas like Reno, as an example, in Nevada. The guys in Colorado with the Avalanche have a nice territory that they’ve built in their region, but there’s a pretty large area that we think, if it makes sense, that we can find the right broadcast partner from a distribution perspective, both radio and TV, find ways to make our games available. Where it makes sense, that’s what we’re going to do, so that’s what Bill was talking about.
We have to be at a very high level with our game presentation. For us to be just one of the better teams in the NHL, I don’t think that’s good enough.
What do you make of the widely held perception that Las Vegas is not a suitable or viable market for major league sports?
I’m not really sure how that perception came to be but I’m also realistic that it is a perception that is out there. I think a lot of people don’t understand how the big the market is either. Their experience may just be from the airport to the Strip, but they don’t realise there’s a market here of over two million people who live and work in the valley area. That is fairly significant. So this is actually one of the most underserved sports marketplaces in the entire country, with - which I think is an important part - substantial spending power.
We did some market studies as part of the process to educate the NHL and one of the more important data points that I had seen, which I didn’t realise about this market, is if you look at the 22 US teams in the NHL and you look at the markets that those teams play in, in the disposable income rankings in those markets, Las Vegas was 8th or 9th. But when you adjust that number based on cost of living, no state income tax, it goes from 8th or 9th to number one of the 22 US markets.
That’s significant. There is more disposable income in this market of over two million people, which had no professional sports team, than any other US market in the NHL. That’s an important data point that maybe a lot of people aren't aware of.
What impact would the likely arrival of the Oakland Raiders have on your business?
Just on a big picture basis, Las Vegas has always been a very popular tourist attraction in the world. The fact that it is now emerging as a destination for major league professional sports, I actually think that’s a good thing. On the competitive side, I look at the NFL differently than I do a lot of the other leagues mostly because they’re not driven by local revenues in the same way the NBA or Major League Baseball are.
If you look at the NFL, the vast majority of their revenue streams come from their national broadcast deal - otherwise you would not have a team in Green Bay, for example. There’s only 100,000 people in that market. It just wouldn't work there. From a local revenue, competitive perspective, [the arrival of the Raiders] is not something that we would see as being impactful. Again, on the bigger picture side, we’re obviously in the business of promoting this great community and we’d be supportive of wherever that process takes us.
You’re talking about the Raiders competition, I look at just the competitive nature of the entertainment experience in this market. We have to be at a very high level with our game presentation. For us to be just one of the better teams in the NHL, I don’t think that’s good enough. People who come to events in this market, they have a very high expectation of production value.
Few people would expect the Golden Knights to win the Stanley Cup in their first season, but what are your off-ice goals for the early years of the franchise?
We’re fortunate in that T-Mobile is a terrific venue, it’s got great technology - the scoreboard, the LED, just the entire programming, the sight lines, the lighting. It’s all fantastic. We’re fortunate that that’s already in place but we have to really be great in all of those other areas. Ultimately, it’s difficult to control what happens on the ice but all of the other parts, from the music to how we integrate video, to our dance team, to how we clean the ice with our ice crew, our mascot - all of that stuff factors into the overall event experience and the value that we’re providing as part of that experience.
We want to be great and we’re going to put a lot of time, effort and energy into making that great. So in terms of things that I’m really focused and how we benchmark the business side, that’s an important one. Making sure that we have an atmosphere that is full on a game-by-game basis and really creates an environment where we can start to build a legitimate home ice advantage for the team is incredibly, incredibly important.
Bubolz was speaking to SportsPro's Americas editor, Michael Long.