DAVID EBNER

Dallas Stars on the rise

FRISCO, TEX. — The Globe and Mail

Dallas Stars new owner Tom Gaglardi waves to the crowd before the start of their NHL hockey game against the Edmonton Oilers in Dallas, Texas November 21, 2011. (MIKE STONE/REUTERS)

In the sprawled suburbs north of Dallas, several dozen women and men in their 20s work the phones, selling hockey tickets in Texas. The headquarters of the Dallas Stars buzzes, voices making pitches, trying to fill seats that in recent years often went empty.

This used to be easier work. The Stars, a dozen years ago, were a big-time team in the city, winning a Stanley Cup and selling out 238 consecutive games. It’s not easy work any more – but there is renewed vigour.

Story continues below ad

The Stars are reaching for a renaissance – under Canadian guidance. The worst stretch of the NHL club’s history came two years ago, in the final months of bankruptcy, when attendance guttered at 6,306, the American Airlines Center two-thirds empty. Through the fiscal ordeal, the team bled, and booked losses of more than $100-million (U.S.).

The man who saw value in the financial wreckage is Tom Gaglardi.

Based in Vancouver, the billionaire Gaglardi family has deep roots in British Columbia, where Tom’s grandfather was a provincial government minister and his father started the family’s Northland Properties Corp., hotels (Sandman) and restaurants (Moxie’s, Denny’s) business.

Tom Gaglardi has led the expansion of the company and, a decade ago, tried but failed to buy the Vancouver Canucks. When the Stars deal emerged, it was a fit. Gaglardi’s mother grew up in small city east of Dallas.

The overhaul is under way, even as results arrive in staccato fashion. The NHL team last winter let a shot at the playoffs slip away, missing the postseason for the fifth consecutive year. The pace of remaking and reviving then intensified.

In the off-season – putting in pillars Gaglardi believes can form a Detroit Red Wings-like foundation – the team hired Jim Nill as general manager. Nill hired former Buffalo Sabres stalwart Lindy Ruff as head coach, and traded for young star Tyler Seguin. The Stars also enjoy a shift to the time-zone appropriate Central Division from their last ill-fitting home in the Pacific.

“I like where we sit,” Gaglardi said this week. “The business of the Dallas Stars dug quite a hole. We’re well on our way to getting it fixed.”

Fans have responded. Attendance jumped 20 per cent last year from the terrible 2011-12 season. The team has the equivalent of 7,000 season-ticket holders, up from 6,000 in early 2013. There were fewer than 5,000 season-ticket holders when Gaglardi arrived.

The Stars’ first two home games did not sell out but merchandise sales each night, buoyed by new jerseys, were $100,000-plus. Much of the rest of October will be on the road, starting Friday in Winnipeg.

The skeleton and innards of the franchise are rehabilitated. Results on the ice are what propels the enterprise now.

“Dallas loves winners,” said Mark Masinter, a major commercial real estate broker who is among a group of locals advising Gaglardi. “Losing does not sit well in Dallas.”

Bellwether for NHL

On a wall in the team’s practice facility is written: “Details build empires.” This is precisely the thinking of a key non-hockey guy in the office, Jason Farris, the team’s chief operating officer.

Obsessed by hockey as a hobby, Farris had previously worked as an executive in banking and technology, until Gaglardi, a long-time friend from high school, called.

Farris has helped pilot the post-bankruptcy Stars. He negotiated a new debt deal, buying out three dozen old lenders and bringing in Bank of America to lead a new group of four banks. Other changes include new systems to make sure the club is making all the money it can, right down to where to most profitably position the children’s merchandise kiosks at the arena.

A richer television deal is near-ready, and would kick in next season. The Stars make some $12-million a year from their current Fox Sports contract, a figure that is set eclipse $20-million, similar to an increase the network handed the Los Angeles Kings.

The success of such efforts will be a bellwether for the business of the NHL in the southern United States. After bailing out of Atlanta, and finally finding new owners for clubs in Florida and Phoenix, the league needs success in a city such as Dallas, one of the largest metropolitan areas in the country and, early last decade, one of the NHL’s best markets.

The economy in Dallas is there. The city did not suffer a housing crash – prices fell less than 10 per cent – and employment has climbed, as people and businesses, lured by low taxes, flock here.

“The market’s phenomenal,” Farris said. “The market didn’t go away. The Stars kind of went away. Just weren’t relevant. That was our doing, not the market. The community is there, and waiting, and ever bigger.”

Gaglardi, before the changes last summer, initially reached into the past. He hired several people who made the team what it was in its best days. The first gambit was to reinstall Jim Lites as club president and other hires included Mike Modano, the long-time Stars captain/local hero, as a face of the franchise.

Gaglardi extended welcome to big business names in Dallas, creating an ownership-advisory group of some of the city’s prominent business people to help spread the word, such as Masinter, as well as the chief executive officer of 7-Eleven Inc., Joe DePinto. That connection has helped the Stars sell some discount tickets to families to repopulate the stands and stoke long-term interest.

Money flows, too. The front office, emaciated through bankruptcy, has been restaffed, and on the ice the Stars are spending close to the salary cap.

The first time Lites arrived in Dallas to run the Stars he came from the Red Wings after the North Stars moved south from Minnesota in 1993. He departed in 2007, before the team began to flounder. The bankruptcy was part of a bigger bust for previous owner Tom Hicks, a leveraged-buyout investor who also owned baseball’s Texas Rangers and carried too much debt into the global financial crisis.

In Lites’s office, adjacent to the several dozen salespeople marketing hockey tickets, and overlooking the Stars’ practice rink, there are framed pictures from the team’s first game in Dallas. Back then, Lites saw a buoyant, affluent market but he didn’t know whether the sport would sell in a city and a state that knew football and nothing of ice. When Lites returned, convinced to take the helm again by Gaglardi, he wasn’t sure at first it would work, with the sparse crowds, terrible TV ratings, indifferent advertisers.

“I was really nervous when I came back,” Lites said . “But if you ask me now, what do I think? I think we’re going to be good. I really do.”

The Stars missed the postseason in each of the first two years under Gaglardi and Lites – so Lites has brought more change, and more Detroit. The hiring of Nill – who replaced Joe Nieuwendyk as GM – adds a deep Detroit vein, as Nill, 55, was assistant GM of the Wings for 15 years. Nill then brought in Joe McDonnell, the long-time chief of amateur scouting in Detroit, a position he now holds in Dallas.

As Gaglardi hired Lites, Lites has marketed Gaglardi. Lites pushed the reluctant owner into the spotlight in a city where sports owners are typically iconoclasts, like Jerry Jones and his Dallas Cowboys, or Mark Cuban and the Dallas Mavericks.

“If you’re owned by banks and creditors, nobody gives a crap,” Lites said. “People invest their money and their time and their emotion in teams they believe in.”

‘Somewhat fearless’

Suite 1104 at the American Airlines Center is the domain of the ownership-advisory group. At a game last winter, Lites was there, intently watching his team on the ice. Don Carty, former chairman of American Airlines Inc., was also dropped by. Brett Hull, a star of the Stanley Cup-winning Stars, was visiting.

The real-estate broker Masinter came to the arena from the airport after returning from a business trip. Among the clients of Masinter’s Open Realty Advisors is Apple Inc., for which Masinter helped the tech company open its retail stores. Gaglardi has attracted blue-chip people.

Making money comes down to winning. Five years ago, when the Rangers weren’t winning, their ballpark was half-empty. Now the team has the fifth-highest attendance in baseball. Cuban produced an NBA winner in the Mavericks and the basketball team has been a top draw for a decade.

“Tom is a can-do guy,” Masinter said of Gaglardi. “You have to be somewhat fearless to come in and make a significant investment in the NHL.”

In the throes of bankruptcy, Gaglardi paid $267-million for the Stars and half of the American Airlines Center. A bargain, perhaps, but the losses were enormous.

“A guy said, ‘You got a deal,’” Gaglardi said. “I was like, ‘No, I just paid too much, that’s why I got it.’ But did I pay too much? Ask me in five or 10 years.

“Frankly, if we get this thing fixed, you’re going to look back and say, ‘Wow, you bought that franchise and half of that building for that, that’s a hell of a deal.’”

Follow on Twitter: @davidebner

Topics:

More Stories