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Case Study

Capital Sports and Entertainment Group

Improving Off-Ice Business Performance at the Ottawa Senators Hockey Club

BACKGROUND

In this day and age of professional sports, managing hockey operations, or the operations of any sports franchise for that matter, is a fulltime, 12-month a year job. To be successful from a fan’s perspective as well as a financial perspective professional teams must be competitive and entertaining. Truly successful teams will consistently make the play-offs, often winning at least two to three post-season play-off rounds each year. As a result, the sports component of the business commands a significant amount of skilled resources, time, money and effort.

However, off-ice (or off-field/court) performance also plays a significant role in the success of a professional sports organization and can have a major impact on the business --- both positively and negatively. Beyond winning and losing, customer service excellence and community involvement have a large impact on the fan’s experience, and the resulting level of financial commitment they have to supporting the team. Efficient, on target service delivery will be critical to customer satisfaction and retention --- and the bottom-line.

Even with salary caps, the organizations operations and service delivery must be managed with focus and precision to cover the costs of both the sports operation and the support/service aspect of the operation. Like the sports operation, operations such as sales, marketing, accounting, information systems, food & beverage, souvenir concessions, facilities management, and human resources must also operate as a well-coached team; a team committed to working together to achieve a clearly articulated and well understood mission, vision and game plan.

The challenge for many professional sports organizations is how to maximize their business performance, and how to do that without sacrificing the quality of their primary product --- the team.

KEY ISSUES AND CHALLENGES

September 16, 2004, was the first day of the NHL Lockout. The lockout lasted 310 days and resulted in the cancellation of the 2004-05 NHL season. It was the first time a major professional sports league in North America canceled a complete season due to a labour dispute.

During the 10-month long lockout, many NHL teams laid off their management and coaches as a way of reducing costs during a season without revenues. The Capital Sports Group of Companies (CSG), which owns and operates the Ottawa Senators Hockey Club, took a completely different approach. CSG’s executive team, Eugene Melnyk (Owner), Roy Mlakar (President and CEO) and Cyril Leeder (COO) decided to retain the majority of their management team during the lockout and focus on improving their off-ice business performance.

Cyril Leeder, Chief Operating Officer, CSG --- CSG had grown from 14 fulltime employees in 1990 to over 150 in 2004; we now have a total of 1600 employees working on game days. In addition to building a competitive hockey team during that time, we have had to deal with a

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