Thursday, April 30, 1998 | 8:31 a.m.
What's wrong with this equation?
Team A plays about 50 home games a year (including preseason games and playoffs), has ticket prices ranging from $10 to $22, and averages about 6,600 fans per game.
Team B plays about 72 home games a year, has ticket prices ranging from $4 to $8, and averages about 4,500 fans per game.
Here's comes the tricky part. In five years of existence, Team A has never finished in the black and, in fact, expects to lose well over $1 million this year. Meanwhile, in 15 years of existence, Team B, despite lower ticket prices and attendance, has always finished in the black.
Team A is the Las Vegas Thunder of the International Hockey League. Team B is the Las Vegas Stars of the triple-A Pacific Coast League.
Both teams are co-owned and operated by Hank Stickney and his son, Ken, as well as Mandalay Sports Entertainment.
So what's going on here? How can the Thunder, with its much higher ticket prices and about 50 percent more fans per game, be losing money while the Stars roll along in the black?
The answer is player salaries and team affliations.
The Stars have an agreement with the San Diego Padres to be their triple-A franchise. The Padres provide the players, coaches, uniforms, equipment and perhaps most importantly, pick up the salaries.
The Thunder? It's an independent team with a minor player arrangement with the Phoenix Coyotes of the National Hockey League that provides only a couple of players each season. So the Thunder has to provide players, coaches, uniforms, equipment, workman's compensation and salaries.
"When you isolate things, player compensation is the big difference," Ken Stickney, managing director for the Stars and Thunder, said.
"Travel is a little less for baseball and the rent at Cashman Field is obviously less than the rent we pay at the Thomas & Mack Center for the Thunder. ... a couple of hundred thousand dollars. But the big difference is player compensation."
To begin with, the IHL has a salary cap of $1.3 million. That's exactly $1.3 million dollars the Stars don't have to worry about because the Padres pick up the player and coaching payroll.
"And it's not just paying the players and coaches," Stickney said. "For about every dollar we pay in salaries, we probably pay another dollar for things like worker's compensation, payroll taxes, equipment, uniforms, rehab expenses and trainers. Our team operations cost about $2.7 million a year. Baseball is just a fraction of that. It's a big hole to dig out of."
"In my opinion, the biggest flaw in hockey is that the league itself is flawed," Don Logan, general manager of the Stars and vice president of sales and marketing for the Thunder, said. "It's minor league hockey. You can't be paying guys $200,000 a year to play minor league hockey."
But because most IHL teams don't have NHL affiliations --- the American Hockey League serves more as the triple-A for the NHL --- the IHL squads find themselves bidding for many of same veteran players that haven't been able to hook on with an NHL team that year.
Unlike triple-A baseball players who are assigned to their squad by the parent club, many of the hockey players are free agents who can use an offer from one IHL team to bid against another.
"The biggest problem the IHL has are the salaries," Logan said. "I think more of an emphasis needs to be put on it becoming more of a developmental league in cooperation with NHL teams like the AHL is.
"I saw a story the other day that 16 of the 19 IHL teams are losing money. But there are owners in this league who don't care about making money. Our owners, the Stickneys and Mandalay, put up a lot of money for this. If you're good businessman like they are and you keep losing lots of money, sooner or later you're going to say this isn't working and get out."
Stickney said the affiliation issue has been discussed.
"There's been talk of the IHL affiliating with some NHL teams," he said. "That's why we're working with NHL teams like Phoenix now. Still, they already have a deal in the AHL with Springfield."
Stickney estimates the Thunder would begin making money if it averaged about 2,000 more fans per game.
"And that's full-price tickets," he said. "We're not talking about group discount seats."
The Thunder will enter the final year of it's original six-year lease with the Thomas & Mack next season. There have been rumors about the club relocating, possibly to a proposed new arena in Ontario, Calif., not too far from Rancho Cucamonga where the minor league Quakes baseball team owned by Hank Stickney has been a huge success.
"Ontario, that's pretty far out," Ken Stickney said. "You're talking about $60 million to build a new arena. Like I'm just going to pull out a check and write a check for $60 million."
Instead, Stickney said he expects negotiations to begin soon on a lease extension for the Thunder at the Thomas & Mack.
"We're totally committed to them," Stickney said. "Both (the Stars and Thunder) are special in our hearts. I think hockey can eventually succeed here."
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