Columbus Business First: Not so blue about the Jackets

Staff reporter-Columbus Business First

The Columbus Blue Jackets have been here before, watching the Stanley Cup playoffs unfold from afar, weeks after being eliminated from post-season contention.

In what doubters may call a return to the same old Jackets, the club followed up a 2013-14 playoff appearance with a disappointing campaign derailed by a slew of injuries.

But the naysayers are quieter than at any point over the life of the 15-year-old franchise, as fresh leadership and a talented young core of players have ushered in a new optimism that’s filtered throughout the organization and connected with success-starved fans.

The change of attitude, from “we’re just happy to be here” to “we want to win now,” has made the Blue Jackets a more viable business – one ownership expects soon could become profitable for the first time, joining the majority of National Hockey League teams that reportedly operate on an annual surplus.

“I’m satisfied with people understanding what the message is, how we’re going to run the franchise,” said John Davidson, who joined the team in 2012 as president of hockey operations. “I like our direction, I like the way we’re changing the culture slowly and methodically – it’s attitude, leadership, it’s drafting and developing.”

Business back up

The Blue Jackets’ trajectory has been anything but upward since joining the NHL in 2000, recording just one winning season in the first decade of play.

But by summer 2014, under the fresh leadership of Davidson and General Manager Jarmo Kekalainen and coming off a compelling playoff series with the Pittsburgh Penguins, what happened on the ice began pulling along the business side of the house.

During the latest season, sponsorship sales reached a historic high and attendance, TV ratings and merchandise sales all jumped.

“Last year was probably the strongest momentum they had going into an off-season,” said Jim Kahler, a former sports marketing executive and now executive director for the Center for Sports Administration at Ohio University. “(This year) they got off to slow start but seemed to capture the imagination of the market.”

Not only did attendance at the 18,144-seat Nationwide Arena reach a six-year high, but corporate sponsors took note and threw more money at the team. Sponsorship sales hit a record in the 2013-14 season and then again last season, said AJ Poole, the Blue Jackets’ vice president of corporate development.

Revenue from corporate deals has grown 28 percent since 2009.

“When people are more excited about the product on the ice, the story you have to tell (to potential sponsors) is more compelling,” Poole said, pointing to an accord with T-Mobile and other new deals. “Where I’ve seen the biggest change is the recognition of the speed and direction (of the team).”

It’s an important perception, Kahler argues, in a community occupied by a perennial sports powerhouse in the Ohio State Buckeyes football team, fresh off January’s national championship.

“If you’re in charge of an advertising budget you can’t always support everything, so you’re going to support the team that’s hottest,” Kahler said.

So, too, will fans.

“There’s no question there’s a direct correlation,” Davidson said of the team’s game performance and business results. “Obviously, the more you win, the more the fans really get into it. And the fans here have been starved.”

The young, talented Jackets were more popular on television last season, drawing 18 percent higher ratings on Fox Sports Ohio, according to Nielsen Co.

Meanwhile, average attendance at Nationwide Arena climbed 5 percent to 15,511, inching closer to the 16,000 threshold that team President Mike Priest has said is important if the team hopes to become profitable.

“All the things we look at to measure our business are on a positive uptick,” Executive Vice President of Business Operations Larry Hoepfner said.

This time’s for real

Though fans showed up in rising numbers to witness big-time hockey’s first years in Columbus, the honeymoon was marred by a long streak of losing.

One playoff appearance over the team’s first 12 seasons left fans disenchanted and had some questioning the viability of hockey in Central Ohio. Indeed, many measures of the team’s business success plummeted.

Sure, the Blue Jackets have flirted with success in the past, and, yes, the team had a disappointing last season that surely could leave some questioning the direction.

But several developments have the franchise better positioned financially than when the Jackets first made the playoffs in 2009.

The team freed up as much as $10 million annually by selling Nationwide Arena to Franklin County and the city of Columbus.

And the NHL signed national TV deals with NBC and Canada’s Rogers Communications, valued together at more than $600 million a year – revenue that’s shared, in part, among teams.

The Blue Jackets in April switched minor league affiliates from the Springfield Falcons in Massachusetts to Cleveland’s Lake Erie Monsters in a step seen boosting the team’s business prospects by building connections to other areas of the state.

Of course, making the playoffs more consistently will help, said OU’s Kahler, noting NHL teams may break even during the regular season and then see a big financial boost for making the post-season.

“It’s good that people are demanding and they want to see playoffs. I understand all that stuff,” Davidson said. “But it’s my job, though, to keep everything in perspective and keep things evolving as a franchise. We’re close right now to being a good hockey club.”