Ice hockey is a hot business for Stockton

by Eric Miller, CVBT Correspondent

STOCKTON
July 16, 2017 9:01pm


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The ice melted weeks ago but for the Stockton Heat hockey has no off-season.

“Summer is busy,” said Brian Petrovek, chief executive officer for the Stockton Heat. “We’re preparing for next season. To hit our business goals in winter we need to execute now.”

Mr. Petrovek, a newcomer to Northern California, joined the Heat as its CEO in March after owning and managing professional hockey teams in New York and Maine over the past two decades. His move to California is as unlikely as the westward migration of hockey to Stockton.

Hockey originated in Nova Scotia, Canada, around 1800, half a century before the Gold Rush lured pioneers to California. One of North America’s oldest games, ice hockey pre-dates the invention of baseball (1839), football (1860s) and basketball (1891).

Stockton with its inland seaport along the San Joaquin River are renowned as a major trade area and have been since the Gold Rush itself. Today’s Port first opened for business in the early 1930’s. On the ice the Stockton Heat matches the area’s reputation as a strategic geographic link except that instead of importing and exporting foreign- and American-made consumer goods, the Heat imports and exports American and foreign made hockey players.

Whereas the Stockton and San Joaquin County region is known for agriculture and farming, the Stockton Heat are a leading farm team for the Calgary Flames, a National Hockey League (NHL) franchise located 1,291 miles north and one time zone east.

The top four professional sports leagues by revenue in North America include the National Football League, Major League Baseball, the National Basketball Association, and the NHL. Based in Calgary, Alberta, the Flames compete in the NHL’s Pacific Division of the Western Conference, which includes three California teams (Anaheim Ducks, San Jose Sharks, Los Angeles Kings), three Canadian teams, a team from Arizona (Arizona Coyotes) and the Edmonton Oilers along with the new Las Vegas franchise, the Vegas Golden Knights.

The significance of Stockton to Calgary is its relative proximity and ease in transferring assets. Like baseball farm teams, minor league hockey players are called up to the major leagues to fill positions.

“It’s better to develop players. Calgary is in the Mountain Time Zone. We can transfer players easier from the west coast than flying them from the east coast,” said Brandon Kisker, director of broadcasting and media relations for the Heat.

A Brief Guide to the NHL’s Workings

Similar to Major League Baseball, the NHL either owns or establishes partnerships with minor league hockey teams. Calgary is one of 31 NHL franchises, clubs that rely on minor league team affiliates based in the American Hockey League (AAA level) and the ECHL (AA level). Over half of the AHL teams are owned by their respective NHL franchise, the others by private owners.

Semi-pro hockey was first introduced to Stockton with the Stockton Colts nearly 40 years ago at the Oak Park Ice Arena. Minor league hockey gained a foothold in 2005 when the Atlantic City Boardwalk Bullies were sold and relocated as the Stockton Thunder, an ECHL team. The Thunder had historical affiliations to the Phoenix Coyotes, San Jose Sharks, Edmonton Oilers, and the New York Islanders. In 2015 the Calgary Flames purchased and moved the Thunder to upstate New York to replace an existing AHL team that was relocated to Stockton.

Stockton may have lost the Thunder but it gained a AAA team, the Heat, where players are only an injury, hat trick, shutout or phone call away from being called up to the NHL.

Last season’s Heat roster included athletes born in the United States, Canada, Sweden, Denmark, and the Czech Republic. Six Heat players are now restricted free agents for the Flames.

For those uninitiated to hockey, the game excites and engages spectators. Rookie fans quickly catch on to basic rules: whoever scores the most goals wins. Players skate on blades less than three millimeters thick on ice at speeds exceeding 20 miles per hour, shooting pucks at over 100 miles per hour. Players rotate throughout the game in minute long shifts, scrambling for control of the puck, sprinting and passing, often times colliding with opponents. The sport requires agility, endurance, finesse, strength, speed, skill and strategy.

How It Works as a Business

The Heat’s Mr. Petrovek, a Boston native and former All-American goaltender for Harvard University, is responsible for creating and implementing the Heat’s business plan. For Mr. Petrovek the hockey business is more than just filling a roster. Heat coaching staffs plug roster holes, review entry drafts, attend amateur prospect meetings, build player lists, meet with scouts and agents, and implement summer signings. Their job is to attract and develop prospects pushing for spots in Calgary.

“My focus is not the players as much as our sales and marketing executives and managers who develop and carry out our finance, operations, and ticket sales and marketing plans,” Mr. Petrovek explains. “We recently had our budget approved for the coming year. Inter-governmental relations with City Hall and synergistic relationships with the Stockton Arena and our neighbors, the Stockton Ports baseball team, are also vital to our success.”

Mr. Petrovek’s prior ownership experience in New York and Maine is a huge asset to the Heat but in those cold weather states hockey is already well known. Smaller urban areas such as Portland, Maine, or Utica, New York, each about a third of Stockton’s population, fill arenas. Indoor and outdoor hockey rinks in those areas are nearly as commonplace as baseball fields in California.

“Our market footprint is larger than Stockton,” said Mr. Petrovek. “It’s San Joaquin County and beyond. We need to penetrate a portion of Sacramento to be sustainable. We’re targeting a population of about 730,000. Our research shows that fans are willing to drive 45 minutes to experience Stockton Heat Hockey and that excites us. We have a loyal fan base. Stockton is not encumbered by a major league mindset such as in the Bay Area and we need to leverage that and create our own memories with our fans.”

Considering that San Joaquin County’s population is larger than the state of Vermont’s, and that California’s population is larger than Canada’s, one can envision the potential growth of hockey in California.

By all accounts the Heat continues winning over fans. In its second AHL season the Heat marked its first sellout in history last April with nearly 9,300 fans packing Stockton Arena to watch the Heat beat arch-rival San Jose Barracuda, the minor league affiliate of the Sharks. The Heat ultimately lost a best of five playoff series against the Barracuda but fans remained passionate to the final buzzer.

“Among our largest challenges is growing our fan base, especially younger fans,” Mr. Petrovek continued. “We have an aging, traditionally white fan base. We’re trying to reach those aged 35 or younger. Demographic groups such as Millennials and Hispanics/Latinos are a huge opportunity for us and we need to do a better job reaching out and establishing those relationships, which I'm confident we will do.

“California in general has a lack of hockey facilities, whether for ice or in-line (roller) hockey. Fans in those particular demographics have never had the opportunity to grow up with a non-traditional sport such as hockey. Our fans have many options to spend their leisure time and discretionary dollars. We need to become a more compelling part of that conversation … to induce more trial and get more people in Northern California to realize the value of our live entertainment option in downtown Stockton. We are excited about our future and look forward to the days ahead."

The Heat’s venue, the Stockton Arena, is a big factor in gaining and retaining fans. “We direct and produce 34 performances, our home games, during the regular season. Then add play-off games. Our job, among others, is to sell as many seats as possible.”

Mr. Petrovek paused, contemplating the challenge. “We have a finite inventory of games and finite number of seats to fill. The Stockton Arena is relatively young but reemerging and adding energy to our community. It’s a beautiful facility with modern amenities. Plus the Stockton Ports play nearby so there’s synergy with another minor league team (the Ports are the Single-A affiliate of the Oakland A’s). But what challenges us is developing an urgency for fans to watch the Heat — to see us multiple times per year.

“With many games to choose from casual fans can simply decide to come or not come, unlike a concert where artists perform once or twice. We’re not just selling high caliber hockey but rather a high value family entertainment product at an affordable price in a safe, clean environment. The Stockton Arena has a role in the performance and we’ve developed an excellent relationship with SMG Stockton and with the city. We work closer and closer every day, identifying common goals, efficiencies, developing sponsorships and such. Both the Heat, SMG Stockton and the city are in the business of providing quality entertainment and creating memories."

Kendra Clark is the general manager for SMG Stockton, manager of the Stockton Arena. SMG has been in the venue management business for 40 years. Its venues include NFL stadiums (New Orleans Saints, Arizona Cardinals), MLB stadiums (Houston Astros), and multi-event arenas in the United Kingdom, Puerto Rico, Germany and Ireland. “We manage over 260 venues world-wide,” said Ms. Clark, “SMG is a global enterprise.”

Ms. Clark began her career with SMG as a marketing assistant in 2003 at Fresno State University’s Savemart Center. “SMG Stockton took over management of the Stockton Arena in 2011 after responding to a request-for-proposals issued by the city [the city owns Stockton Arena]. SMG won the bid and is contracted to manage the Arena through 2021. We’re quite happy in Stockton and we look forward to helping the Heat grow.”

In addition to hockey, the Stockton Arena hosts concerts, performances, Monster Truck shows, and private events. “We book about 115 events per year. Singer Carrie Underwood and comedian Kevin Hart recently performed, as well as Disney on Ice and the Harlem Globetrotters. With the events and hockey, the building is in use 365 days per year. Events are always transitioning,” she said.

Ms. Clark reiterated a strong partnership with the Heat. “The Arena’s success is the team’s success and vice versa. Our marketing departments work together to develop new ideas for performances. Next season we’re collaborating on several theme games ranging from Star Wars to the Teddy Bear Toss.” Ms. Clark chuckled when mentioning the Teddy Bear Toss, where fans bring teddy bears to throw onto the ice after the Heat scores its first goal. “All the bears will then be collected and donated to the United Way of San Joaquin County. We’re in the business of programming entertainment, plus there’s a great hockey game.”

This community marketing element resonates with Mr. Petrovek. “Our Calgary Flames relationship, as owners of our franchise, gives us freedom to develop an approach and commitment to our community. We have no prescribed marketing plan from Calgary. We create and implement our own plan. The Flames support us; it’s not top down management.”

Mr. Petrovek continued, “We’re providing a high quality and high value family friendly performance for a reasonable price. We want a team that cares about its community and at the AAA level the community wants to be entertained and engaged. That's both our challenge and opportunity and we cherish that. But we’re expected to win games, too.”

“Twenty percent of the Heat’s overall attendance includes fans from Tracy, Livermore or Dublin,” adds Ms. Clark. The figures jive with roughly a 40 to 60 minute drive as researched by Heat marketing staff.

“The community has embraced the Heat,” said Wes Rhea, CEO of VisitStockton.org. “We’re traditionally a baseball town. When the Arena first opened in 2005 it hosted ice hockey, arena soccer and arena football. Hockey outlasted them all. Plus with the Heat making the playoffs this year, fans from out of town enjoyed our restaurants and hotels. An economic multiplier trickles throughout the community.”

Ms. Clark continued, “Our goals as a venue manager are to continuously improve. They’re tied with the city of Stockton. Tourism brings dollars. This past March we hosted the NCAA Women’s Regional Basketball playoffs. And with the Heat’s ties to Calgary we’re seeing more Canadians visit during winter. We also communicate with hockey management groups within the Pacific Division, with teams based in San Diego, San Jose, Bakersfield, and Ontario. We want all teams in the Division to do well. Though we’re competitors we collectively work together. A rising tide lifts all boats.”

For Heat players the stop in Stockton is part of their career path. “We have the second youngest group of athletes within the AHL,” said Mr. Kisker. “These are young professionals out to prove they’re worthy of playing in the NHL. Many have signed two-way contracts allowing them to migrate back and forth from the AHL to the NHL. Unlike the ECHL and lower level leagues, our athletes do not need part-time jobs or family sponsors to house them. They are pros. Their summer regimen includes off-ice conditioning, maintaining nutrition, and staying healthy. This is a new level of hockey for Stockton. We had a terrific season. We also support the Stockton Colts youth leagues. We want to involve young kids. Hockey in Stockton is here to stay.”

Mr. Petrovek, who’s risen from a college hockey goalie to LA Kings draftee to AHL owner/operator and CEO, offers a focused perspective. “Throughout my career as a player and in business I’ve been able to see the entire field of play. The bottom line is we need to marry the Stockton Heat hockey brand to market and develop long term, sustainable relationships with customers for generations to come, creating memories along the way. General sports and live entertainment fans may not care about the details of our business plan — but they do care about what their team means to their community beyond the wins and losses."

Mr. Petrovek reflected on his career, which included NHL management positions with the New Jersey Devils. Does he strive to repeat a climb up the NHL ladder?

“No. Job one is here in Stockton and I'm excited about this opportunity. My work is creative, exciting, focused about accountability and outcomes, and presents huge challenges and opportunities that engages our entire staff.” He grinned, "See you here in the playoffs next spring.”

About the writer

Eric Miller is a freelance writer based in Chico who writes about business innovation and people who make a difference. He has industry experience in waste management and water resources, and also writes humor articles for Hockey Player Magazine. Contact him at eric@etcguy.com, via Linked In, or visit his humor blog at www.etcguy.com.

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