Billings is once again being asked to host a hockey franchise, only this time it is a professional team, a new one to be formed as part of the ECHL.
"The ECHL is a major professional league with 27 teams in the US and Canada. The play of ECHL hockey is at a higher level, and there should be no comparison to the semi-professional leagues with which Billings is familiar", said Ray Massie, Marketing Director for MetraPark. “This is very far from Junior Hockey.”
Massie sees the proposal as a potential boon for MetraPark in terms of filling event dates and generating additional revenue. MetraPark Advisory Board members are broaching the proposal with considerable caution. During their regular meeting last Tuesday, the board failed to pass a motion to ask the county commissioners to pursue the proposal, with many board members saying they want more information.
The hang up is ice and timing. The four businessmen who are making the proposal are asking that MetraPark invest more than $3.1 million to install ice and provide for offices, locker rooms and training space. MetraPark abandoned their aging ice facilities some years ago.
That’s a tough decision to make, said County Commissioner Robyn Driscoll, given all the other constraints on the county’s budget. “The county isn’t going to say here’s $3 million, go for it,” she said.
Commissioner Denis Pitman, who was also at the meeting, said the commissioners would like feedback from the board.
Massie laid forth details of the proposal which would include a five year lease agreement with the team. MetraPark’s Finance team crunched the numbers, based primarily upon the experience of the franchise team in Rapid City, South Dakota and they believe the proposal is doable. The worst case scenario is that MetraPark would break even and be left with a valuable asset – an ice sheet – that would accommodate MetraPark engaging other events, such as Disney ice productions or exhibition games, which would generate other revenues.
“I see an opportunity to improve our facility and community, pay for a solid capital asset, and maybe make money in the long run. Investing capital money in items that can make money seems like the right thing to do.” said Massie.
“This is stuff the capital improvement fund was made for,” said one board member, Lyle Hill.
Billings was one of four cities identified as a good location for an ECHL team by the team investors, two of whom are Colin Sinclair, a former professional hockey player, and Arthur Yasinski, a senior Microsoft employee. Billings was favored over the other locations because “on the map, it just makes sense” and because of its strong hockey history.
The $3.1 million does not include the cost of building offices and workout facility. Adding those costs to the required capital investment could push the cost to MetraPark nearer $4 million. There has been discussion that maybe the franchise investors could help fund some capital costs; as it is the investors would be committing similar amounts in the venture.
Estimated revenue from the team for MetraPark could be $1.1 million to $1.3 million depending on the attendance and support of the community. Net revenues are in the $200,000 -$250,000 range annually. In addition, the franchise would bring significant direct spending including payroll and other expenses annually to Billings.
The investors would like a response from Yellowstone County and MetraPark by December 7, so they can submit a formal application to the league by the December 15 deadline to be considered in January for the 2019-20 season. A second opportunity for the matter to be taken up by the league will occur in June, but that would delay development to the 2020-21 season of play. The investment group has indicated that such a delay is less attractive to them, and they would either need to find local partners to include or possibly abandon their efforts. It would also put MetraPark under a tight schedule to build the ice plant.
Driscoll said that the December deadline isn’t feasible.
The Billings Chamber of Commerce and Visit Billings have submitted a letter, dated Oct. 3, 2017, to the county commissioners in support of pursuing the proposal saying it would increase entertainment opportunities and is a great opportunity for Billings’ hospitality industry.
While Massie believes a hockey franchise poses an opportunity for MetraPark, he concedes that they have many other demands on their capital resources. “MetraPark has too many needs for a diversion of capital to another program not to have some impact on MetraPark’s ability to serve the public.” For example, MetraPark is currently in the process of having an engineering firm locate a 100-years of utility line placements across the property and to estimate the cost of updating and replacing its utilities. The cost is expected to be significant.
It was suggested that perhaps MetraPark could borrow the money to cover all its needs, including ice for hockey, with the recognition that MetraPark was able to completely pay off its debt to rebuild the arena following the Father’s Day tornado in 2010, and the facility is bringing in more revenue, now, than ever before. From all sources, in FY 2017, MetraPark had $9 million in revenue – “the best year in the history of the facility.” - with a net income of about 4.5%.
Initially, the investors are asking that MetraPark develop a potential lease agreement with the team and a Memorandum of Understanding, in which Yellowstone County agrees, if the franchise is awarded, to build the ice plant to league specifications. The investors would also need to take deposits for 1500 season tickets, and secure at least $250,000 in sponsorships while the arena upgrades are taking place. If all conditions are met there is still a final approval required from the league.
Massie said that selling 1500 season tickets would speak well to the franchise’s viability. That should be doable based upon what happens in other franchise cities, many of which are no bigger than Billings. Their biggest challenge, believes Massie is selling $250,000 in sponsorships.
What happens with the team at the end of the first contract?
The goal of the ECHL league, which has been in existence for 30 years, is for stability among its teams, so while teams do move, the incentives are to maintain stability. The owners are typically prepared to absorb losses through the ups and downs of doing business, but the only reason to believe they would leave is if there were sustained losses over a period of time. The team owners would be making a substantial investment which they aren’t going to walk away from, but if for some reason the agreement terminated at the end of five years, the worst case scenario, said Massie, is that MetraPark would have an asset for which they have limited use.
A 26-week ECHL season would involve 36 home games plus playoffs or exhibition games. That would fill 36 empty nights at the Rimrock Auto Arena. With 75-80 percent of their games landing on Fridays and Saturdays, the schedule would not normally conflict with concerts since concerts seldom fall on weekends. But, just in case, there would be a “claw back” provision in the contract, should MetraPark need a date for a concert. Bumping a date to a Sunday would be eminently possible. Most of the rest of the hockey games fall on Wednesdays, and MetraPark has almost zero arena events scheduled for Wednesdays. Massie said that he looked at the ECHL schedule for 2017, beginning in November and, “We had 13 weekend dates available for scheduling.”
Building an ice plant would require demolishing the floor of the arena and pouring new concrete, a project which would take 35 to 45 days. “There’s only a couple times during the year that could be done,” but there are opportunities to accommodate it, said Massie. The biggest risk is if for some reason the construction took longer and they might have to cancel an event.
Is Billings large enough and interested enough in hockey to support the team?
“That’s the risk which we have no way of knowing, today,” said Massie, “There has not been hockey played at this level, ever, in the city. To compare the Bulls or even the Bighorns to the ECHL is to do a disservice to the ECHL.”
MetraPark’s assistant manager, Sue DeVries commented that in the past “most of the teams did extremely well under the right leadership.” And, it was noted there is a significant following of hockey in the city. As with people in all cities, said Massie, “Billings does tend to support winning teams.”
Billings has hosted a series of past junior league, minor leagues and semi-professional teams, which experienced varying degrees of success -- Billings Blazers, Billings Bighorns, Montana Magic, Billings Marlboros, and the Billings Bulls. The game began at MetraPark with the Billings Blazers in 1975 and ended in 2006 when negotiations over the use of MetraPark broke down. The Bulls joined the Tier III Northern Pacific Hockey League, in which they continued to participate until this year.