San Diego Gulls' owners drop out

San Diego Gulls Press Release, 6/23

Quote:

AG2000 Hockey Partners No Longer Operate Gulls - (06-23-2006) SAN DIEGO — The San Diego Gulls announced Friday that AG2000 Hockey Partners LLC, led by Ron and Ernie Hahn, no longer operate the team. The organization, however, is in serious negotiations with another ownership group that would keep the Gulls in operation and in the ECHL for 2006-07 and beyond. "I have been involved with the team since 1991 and it has simply come time for me to move on to other things,” Ron Hahn, the Gulls’ former president and majority owner said. “We certainly want to thank the loyal, longtime season ticket holders and fans who have enjoyed Gulls hockey over the years. In addition, I want to personally thank the staff who has worked so hard to make the Gulls a longstanding, proud entity within the San Diego community." "This has been a difficult decision, however we certainly do not intend to have hockey leave the market all together,” Ernie Hahn, ipayOne Center general manager said. “The Arena is currently in negotiations with a new ownership group that will keep the Gulls in San Diego and in the ECHL for the 2006-07 season and beyond.” “The Board of Governors Annual Meeting is being held in continuance which provides an opportunity to keep the San Diego market viable for the 2006-07 season,” Gulls Chief Operating Officer Tera Black said. “We are working diligently to prevent San Diego from losing one of its most successful sports entities. The Gulls date back to 1966 and we have every intention of continuing the great hockey tradition. I am fully aware that there are fans that are uncertain about our future, but rest assured that we will have resolution by the end of the week.” If fans have any questions, feel free to e-mail Mick Ysursa, Gulls Director of ticket sales at mysursa@sandiegogulls.com or 619-308-4401. #sdgulls#

There had been rumors going around for a week that AG2000 had turned in the Gulls' membership at the ECHL meetings last week -- and apparently those had some bite to them. The rumor mill had been going full bore that the team was outright folding, but this press release holds out hope that another ownership group might operate the team for next season.

The challenges faced by any incoming ownership groups are myriad. First, AG2000 also hold the lease on the arena in which the Gulls play (the iPayOne Center at the San Diego Sports Arena) -- therefore, any new group would have to pay lease costs to AG2000, which AG2000 didn't have to pay to themselves when they operated the team for the last 11 seasons. AG2000 had access to EVERY ancillary revenue stream generated by the arena... and word is that the team STILL lost a half-million dollars last year (despite claiming to increase attendance and finish third in the league -- numbers that were clearly ficticious when the evidence of eyesight was used at the games). So, no access to parking revenues (most likely), and a difficult lease negotiation with AG2000 to get any access to the other revenues, PLUS having to pay rent...

Add to that that AG2000 seriously damaged the market over the past three years, starting with the Gulls' first ECHL season -- while the team did win the regular-season title, their off-ice decline had already begun, as a clearing out of the front office left people with no experience running the ship, and led to a serious decline in customer service experience, which led to a decrease in season ticket base the next season.

The next season's on-ice performance also accelerated the decline, as the only coach the WCHL/ECHL Gulls had ever known was unceremoniously dumped so that the owner's daughter's husband could be installed as head coach... with ZERO head coaching experience (he was a former player for the Gulls). The Gulls finished well out of the playoffs that year -- their first EVER non-post-season year.

This past year, the crowds continued to dwindle -- there was a souring of the mood, even as Son-In-Law was "promoted" to GM mid-season, and the team was run by the two-headed monster of former players Jamie Black (husband of the team President) and BJ MacPherson (forced to retire in 2001 when he received a serious neck injury during the Taylor Cup Finals against Idaho)... only the presence of a sad-sack first-year team in Stockton in their division got the Gulls into the playoffs (4 of 5 teams made it), and they were swept by long-time rivals Fresno. The attendance numbers announced were farcical, and customer support and fan friendliness were out the window at the front office, from all accounts.

After this much damage to the market, I'm skeptical that a new group can make the ECHL work for next season in the iPayOne center... I hope they can, but I'm not pegging my expectations anywhere. The thing that might revitalize the market for hockey, IMO, would be the long-ridiculed idea of an "AHL Pacific" division -- if five teams from the ECHL's National Conference (or more) would all manage to land AHL franchises at the same time, and make the en masse entry into that league... though that would have to come at the expense of existing AHL markets, clearly, and there are SO many moving parts that would have to come together.

My personal bet is that this is going to get weirder before it's resolved, unfortunately.