PowerPlay Magazine

Managing Your Finances - A Principled Guide to Building a Successful Hockey Team

- PMullings, March 31, 2014

By way of introduction, my name is Dave.  I go by the handle PMullings, which is derived from the misappropriation of the name of a disabled young boy; I am not a good person.  This is my first article for the PPM Mag.  I do not write to pass along my sage advice as to how to be a better human being, fortunately for everyone, but rather to impart the wisdom of my experience as the manager of a PPM hockey team.

My aim in this piece is to share with you the principles that I have applied to earn both immediate and long-term success through the lens of sound fiscal management.  Who is excited now?! 

What follows is a simple set of priorities which I apply when deciding on how to best invest my funds. 

1. SPEND!
   
   If you have money, don't sit on it.  Spend it!  Your money doesn't earn interest in your account, so unless you're saving up for something specific, carry a minimal balance.  You have to spend money to make money, baby, and if you're no spending, you're not earning.
    
2. Sell Out.
   
   A die-hard Maple Leafs fan (and boy am I dying now), my priorities are perhaps skewed by that which I know.  I do not know a true winning organization, but I have extensive exposure to one that knows how to make money.  
   
   Your arena is the backbone of your team's economy.  If your arena is selling out, add more seats!  This is priority number one.  If your fans are clamouring for more tickets to see the worst team in the league, give them that opportunity at $400 per ticket!  The ticket sales, souvenir sales, skybox leases, and media sponsorship will return your investment and more very quickly and give you the money you need to spend on improving your on-ice product.
   
   
3. #winning!
   
   The aim of the game, but just 3rd on my Maple Leafs inspired list of priorities, winning is one of the primary vehicles for your economy: it inspires your sponsors to shell out big bucks to associate with your team, puts butts in the seats, and moves unconscionably priced merchandise.
   
   Get the most out of the lineup you presently have.  Focus on maximizing your talent through training and master the psychology of tactics and counter-tactics.
   
   If the lineup you have can get you into the playoffs and challenge for a top four position, don't waste your money on personnel, even if it may push you to a division championship.  Spend your money on developing a sustainable core -- unless you're into the Miami Marlins' method of competition.
   
   If, on the other hand, you're having trouble making the playoffs, then it's time to turn to the market.  
   
   You don't want to have to blow your whole wad on the market to the detriment of your arena and facilities, but if your team is stagnating or moving down the standings, then you have three options: you can spend to improve, you can do nothing and stagnate, or you can sell and rebuild.
   
   The second option is not a good one.  Your income is going to flat-line or drop while your expenses continue to mount.  Your growth is going to slow or stop and the teams that continue to grow are going to pass you.  It is not uncommon to see a team finish 10th to 12th in the standings season after season.  Again with the Leafs theme.
   
   The question you face as a manager is whether to buy or to sell.  Analyze and decide quickly. Your veteran players aren't getting more valuable to you or to anyone else.
   
   If you can supplement your lineup and become a winner again, do it now.  The influx to your lineup is going to result in a temporary dip to chemistry.  The sooner you add players, the sooner they're able to help.
   
   If you decide you can't compete with this group, then it's time to sell and it's time to sell now.  Relegate and follow these principles.  Soon enough, you'll promote and be on the #winning path again.
   
   In coming to your decision to be a buyer or seller, compare your team to the top teams in your division.  Identify what you need to compete with those top teams by comparing your Overall Team Strength (OTS) to theirs.
   
   Your OTS is comprised of four main elements, each of which affects your OTS equally: Goaltending, Offence, Defense, and Shooting.
   
   The easiest to address is goaltending; one player makes a 25% impact to your OTS.  Defense is the next easiest with only eight players affecting it.  Offense is next with 12 and Shooting last with all skaters affecting it (to varying degrees). Keep your eye out for a future canucks357 article on this specific shooting topic.
   
   Like Brian Burke always advocates, improve from the net out.  You can easily boost your OTS by adding a goalie or a couple of defensemen.  Is it enough to compete?  If so, for how long?  Is the rest of your team catching up?  The decision will be unique to your team.
   
   
4. Sustain It, Build for the Future.
   
   Adding players through the market is not a sustainable model.  It is a supplement to, not a replacement for, growth from within.
   
   Develop your facilities, specifically your Training, Regeneration, Sports Academy, and Medical Facilities.
   
   If your facilities are comparable to the best in your division, then consider adding young talent to supplement the ones coming out of your Sports Academy, preferably good Canadian boys who you can pay less for their services.  Your goal should be to develop talent better than anyone else in your division.  This will allow you to save on player additions and to reinvest more in your arena and facilities while you maintain your spot atop the standings.
   
   Eventually, you are going to promote, but if you don't have a sufficient base and core, you're going to relegate very quickly.
   
   
5. Scrimp and Save, Budget and Plan!
   
   Before Day 1 of any given season, you should have a very good idea as to what will be in your bank account on any day of the upcoming season, plus or minus a few million.
   
   Plan out your season and keep key dates in mind.
   
   You're going to want your Human Resources facility and stands in the arena to be completed before contract offers come in.  You're also going to want to try to plan your training camps to take place after your Sports Academy has increased a level, if possible.  Know how much you'll need on certain dates.  Save up or plan to eat the costs of a loan.
   
   Minimize the costs of your players, staff, maintenance, and transfer fees while maintaining your competitiveness.  Dollars saved are dollars earned.  Spend wisely and you'll have more to spend and invest.
    

Thanks for taking the time to read my inaugural piece.  If you have any questions or comments, please feel free to write in the comments section or to send me a PM.

Go Leafs Go [chokes back a sob],

PMullings