CONCORDIA UNIVERSITY CHICAGO
Doctoral Program
Student:
Jeffery Trout
crf_troutjl@cuchicago.edu
41 Tomahawk St, Trabuco Canyon, CA 92679
Day Telephone:
Evening Telephone:
949-354-1015
949-264-6647
Assignment Title:
Date of Submission:
Assignment Due Date:
Chicago Blackhawks Turnaround
March 8, 2015
March 8, 2015
Course:
SPML6090 –Sports Administration
Section Number:
Semester:
Course Instructor:
8995.201530
Spring 2015
Dr. Lashbrook
Certification of Authorship: I certify that I am the author of this paper and that any assistance I
received in its preparation is fully acknowledged and disclosed in the paper. I also have cited any
sources from which I used data, ideas, or words, either quoted directly or paraphrased. I certify
that this paper was prepared by me specifically for the purpose of this assignment, as directed.
Student’s Signature: Jeffery L. Trout
[Digital signature]
Running head: CHICAGO BLACKHAWKS TURNAROUND
Chicago Blackhawks Turnaround
Jeffery L. Trout
Concordia University, Chicago
SPML6090 –Sports Administration
Dr. Lashbrook
February 21, 2015
Chicago Blackhawks Turnaround
1
This essay examines the Chicago Blackhawks, a National Hockey League (NHL) team,
and their turnaround as an organization since H. Rockwell (Rocky) Wirtz assumed control of the
organization soon after his father’s death. According to Slack and Parent (2006), a turnaround
strategy is considered a defensive move where an organization attempts to counter increased
costs and falling revenues when the demand for its product or services decreases.
The Blackhawks were purchased by Rocky’s grandfather, Arthur Wirtz, in 1954. Arthur
was a shrewd businessman who was able to build an empire in sports entertainment, real estate
and alcohol distribution. Wirtz and his business partner James Norris purchased the Olympia
Stadium in Detroit along with a professional hockey team, the Falcons, which he renamed the
Red Wings. They also bought the Chicago Stadium in 1933 for $300,000, which had been
constructed just seven years earlier for $7 million. In 1946 when the Blackhawks owner
franchise was facing bankruptcy, Wirtz and Norris stepped in to help Bill Tobin purchase the
ailing franchise in order to save one of National Hockey League’s “original six.” Arthur Wirtz
assumed control of the team in 1954, and from then through the late 1960s, the Blackhawks were
the most popular sports team in Chicago, winning the Stanley Cup in 1961 (Shein and Kannry,
2012).
Arthur’s son (and Rocky’s father), William (Bill) Wirtz, assumed control of the
Blackhawks in the late 1960s. Unfortunately, the policies of Rocky’s father alienated both fans
and players. While maintaining some of the highest ticket prices in the NHL, he was reluctant to
spend money to retain Chicago’s star players (Hathaway, 2013). The Blackhawks fan base
slowly dwindled over a 30-year period to an estimated 3,400 season ticket holders in the early
2000s. This downward spiral culminated in the Blackhawks being named the worst sports
franchise by ESPN in 2004 (Johnson, 2004) and Bill Wirtz being named the 4th greediest owner
Chicago Blackhawks Turnaround
2
in professional sports. Rocky Wirtz spent his time prior to his father’s death managing the
family’s other businesses. He was the Chairman of their Judge and Dolpf, LTD beverage group.
In fact, he stayed away from the team the last few years of his father’s life because he didn’t
want to be associated with how the team was being run (Rozner, 2013).
Rocky’s grandfather, Arthur Wirtz, had spelled out in his will how the trust that controls
his businesses would transfer to his sons and upon their death to Rocky. While ownership is
shared among family members, Arthur insisted that authority over the family’s corporate assets
and the Blackhawks sit with one person to reduce infighting (Hathaway2013). Even though
Rocky’s brother, Peter, was the senior vice president of the team and seemingly groomed over
two decades while Rocky managed the family’s wholesale wine, beer and spirits business, within
days of Bill’s funeral, Peter announced that he was leaving the family’s businesses, including the
Blackhawks. Rocky would run the team (Rozner, 2013).
Change Leadership
When Rocky took control of the Blackhawks in October 2007, he recognized the need for
organizational change as the team’s operations were in crisis. Over the 41 years that his father
had managed the team, there had been little change. Scott (2014) states that sports organizations
operate in a rapidly changing and complex world and they must be able to respond to these
changes. Bill Wirtz’s policies of not paying big salaries to attract or retain talented players
caused the team to perform poorly and alienated players and fans alike. Not allowing home
games to be televised locally also had a detrimental effect on the team’s fan base. The
Blackhawks, one of the original six NHL teams playing in hockey’s third-biggest city, had
become perennial losers with the second-worst attendance in the NHL (Vardi, 2009). The team
Chicago Blackhawks Turnaround
3
value in 2007 had dropped by over $40 million during the previous 5 years (Shein and Kannry,
2012).
According to Kotter (2012), identifying an eight-stage process for leading change calls
for “establishing a sense of urgency.” This involves evaluating the market and competitive
environment for opportunities and potential crisis. Rocky Wirtz felt that the easy way out would
have been to wait for a year, bring in a consultant and evaluate the situation. Wirtz didn’t feel he
had the luxury to do that and felt he had to start over immediately to “turn things around”
(Haggerty, 2013).
To effect change, he sought to reverse one of his father's most-hated policies. He
immediately struck a deal with Comcast to televise 11 home games during the 2007-08 season
even though the broadcast schedule for the year had already been set. Wirtz personally lobbied
companies to sign on as sponsors for the telecast to get the deal done. He viewed each hockey
broadcast as a three-hour commercial (Vardi, 2009).
Muczyk and Steele (1998) looked at leadership styles that are most appropriate in
turnaround situations. They suggested that an autocratic leader in the individual stages of a
turnaround may be required. Rocky Wirtz took an autocratic approach, especially in the initial
stages of his plan. Muczyk and Steele note that it is common for managers to be replaced and
employees to be terminated, and that these actions do not lend themselves to participative
leadership.
Kotter (2012) identified “creating a guiding coalition” as another of the eight stages in the
process for leading change. This involves building a team with a high level of commitment to
guide change. In addition to relieving his brother Peter of his position as Vice President of
Operations for the Blackhawks and reassigning him to management of the family’s food service
Chicago Blackhawks Turnaround
4
business, Rocky also reassigned or replaced many longtime front-office employees, stating that
“we have an obligation in every single category of this organization to get better and improve our
operation.” The most important hire was recruiting John McDonough to serve as the team's
president. McDonough had no ties to hockey. He had been the president of the Chicago Cubs
where he was instrumental in boosting the team's attendance, revenue and national profile
(Haggerty, 2013).
John McDonough was a marketing guru who led the Chicago Cubs to success both on
and off the field of play. Under his leadership, the cubs set attendance records and won the
National League Central title in 2007. McDonough quickly modernized the Blackhawks, an
organization that did not have a human resources manager or even a receptionist when he joined
the club.
McDonough changed the Blackhawks’ radio contract to WGN, the largest station in
Chicago, put on a Blackhawks convention and brought the NHL Winter Classic, the annual
outdoor hockey game played on New Year’s Day, to the league. He scrapped the team’s ad
agency and its outdated rotunda pricing scheme, under which all tickets on each arena level cost
the same, whether for the corners or center ice. The inaugural winter classic held at Chicago’s
Wrigley Field between the Blackhawks and Detroit Red Wings drew 40,818 fans. The game
received an 11.8 overnight rating and a 21 share on NBC in Chicago, making it the mostwatched NHL game in almost 34 years. McDonough also shared Wirtz’s commitment to
winning. He fired coach Denis Savard, replacing him with Joel Quenneville, who has guided the
Blackhawks’ on-ice success (Vardi, 2009).
McDonough would later state that “the first two years were a blur.” The Blackhawks
replaced a good percentage of their staff in hockey and business operations. “There had to be a
Chicago Blackhawks Turnaround
5
seismic culture change. We had to have people think differently about themselves and about the
Blackhawks.” This had to be done with a sense of urgency. “This wasn't sit back and assess the
terrain and see where we are in a couple of years” (Isaacson, 2011).
Building a Culture of Success
When Wirtz took over the Blackhawks, they had only made the playoff once in the
previous ten seasons. They did not have a winning culture. His father had let his star players go
to other teams rather than pay them more money. This earned him the nickname ‘Dollar’ Bill
Wirtz. However, in 2007, Rocky did have some excellent young players, specifically right
winger Patrick Kane Jr. and center Jonathan Toews. Wirtz and his management team that now
included General Manager Stan Bowman then went out and paid top dollar to acquire a star
defenseman, Brian Campbell, pushing the team’s payroll to the league’s salary cap. This led to a
Stanley Cup Championship in 2010. Rather than trade or let his star players go through free
agency, Rocky re-signed them and built the nucleus of a dynasty.
After their Stanley Cup win, the Blackhawks found themselves faced with having to get
rid of a number of key support players and go into a retooling mode due to salary cap
considerations. While the Blackhawks did not return to the Stanley Cup Finals in 2011 and
2012, they were still a winning team. Bowman brought in new players who helped the
Blackhawks get back to the top. In 2013, they set a record at the start of the season by going 24
straight games without a regulation loss. They culminated the year with a second Stanley Cup
Final in four years. In 2014, the Blackhawks came one goal short of returning to the Stanley Cup
Finals.
Since Rocky Wirtz assumed the role of chairman of the team in 2007, the team has won
two Stanley Cup championships and they are currently ranked 4th among NHL teams in
Chicago Blackhawks Turnaround
6
valuation at $825 million. They led the league in average attendance in 2014 with 21,775
(Forbes, 2014). This change of fortune has been called “arguably the most remarkable
turnaround in the history of sports in the United States” (Vardi, 2009).
Vision
In order to make immediate changes to the Blackhawks organization, Rocky Wirtz
needed to communicate his vision for the organization. Cartwright & Baldwin (2007) defined
vision as an imagined or discerned future state that clearly captures the organization’s direction
and defines its destination. Scott (2014) indicated that collective thinking across an organization
is required to tackle many of the challenges facing the sports industry. John McDonough
explained that when he was hired by the Blackhawks, he and Rocky spent several hours together
one afternoon to discuss their management philosophies. They found that their philosophies
“lined up.” They agreed on how to approach many of the issues facing the Blackhawks. They
also saw “an incredible sense of urgency” to implement their shared vision of “putting a
premium on hiring the right people, drafting, developing and, in some instances, making really
tough decisions” (Powers, 2015).
The Blackhawks also placed an emphasis on fan input. They instituted fan surveys to
gauge the preference of their fans. That led to changing things that may seem small to an
organization but big to fans, such as the start time for games or changing the songs played during
intermission (Powers, 2015). This feedback can guide an organization to shape its future vision
to better accommodate its customers.
Winning was an obvious goal of Rocky’s vision, but he also saw opportunities to capture
synergies through his other business entities. His wine and spirits business saw an increase in
business in the middle of a recession as bars and restaurants in the Chicago area saw increased
Chicago Blackhawks Turnaround
7
patronage during the Blackhawks’ playoff run in 2010. This took a combined vision across the
different business units within the organization. Wirtz understood that a winning sports
franchise could “cross-pollinate” the different business units and increase revenues for both
(Isaacson, 2011).
Future Steps
John McDonough stated that while “It’s very complimentary for people to say it’s the
greatest sports turnaround in all time,” they have a long way to go (Powers, 2015). The
Blackhawks cannot rest on their laurels as it is easy for an organization to lose its way and return
to the policies and practices that plagued it in the past. A look at the National Football League
(NFL) Oakland Raiders provides a primer in how a franchise can fall from dominance. After
appearing in four Super Bowls and making the playoffs in 22 out of 27 seasons, they have not
had a winning season in 13 years. They don’t sell out their home games in an era where most
NFL teams have no problem doing so, and under league rules, their home games are not
televised in their local market when the games are not sold out. They are contemplating a move
to Los Angeles for the second time in the history of the team. They face some of the same issues
that the Blackhawks faced in 2007.
The Blackhawks cannot afford to rest on their laurels. They must continue to work to put
together teams that are competitive and entertain fans. They are currently making a run at the
playoffs and their star player and goal scorer, Patrick Kane, recently suffered an injury that will
keep him out of the lineup into the playoffs. To overcome this, the Blackhawks made five trades
between the injury and the NHL trade deadline, including forward Antoine Vermette and
defenseman Kimmo Timonen for high draft picks. While the motivation for these moves is to
Chicago Blackhawks Turnaround
8
win now and potentially get to the Stanley Cup Finals, even if they don’t succeed, they are
communicating to their fan base that they are willing to do what it takes to win.
Another future consideration is to provide superior facilities for the organization’s
players. NBA teams have led the way in building state of the art practice facilities for their
players. Chris Grant, Assistant General Manager for the Cleveland Cavaliers, stated that "we're
in a highly competitive business. Any edge that a team can gain to be more competitive we're
going to do." Their practice facility may have also played a part in luring Lebron James back to
Cleveland (ESPN, 2006).
The Blackhawks are currently considering the construction of a new practice facility
adjacent to the United Center. This facility could not only improve the Blackhawks’ on-ice
performance but also make Chicago a more desirable location for a free agent to consider. This
facility could also be opened to the public when not in use by the team and provide additional
grass roots support of hockey (Powers, 2014).
The goal of any sports organization is to increase its fan base, thereby increasing ticket
and souvenir sales. While much of a potential increase in the popularity of ice hockey is
dependent on the NHL and exposure on TV, Rocky Wirtz has put himself in a position to be a
leader in the NHL. One way to increase viewership is to increase the globalization of the sport,
and a key to this globalization is the continued participation of NHL players in the Winter
Olympics. However, many in the NHL have a problem with their players participating in the
Olympics as the Games fall right in the middle of the NHL season.
Rocky Wirtz indicated immediately after the 2014 games in Sochi, Russia, that he
doesn’t have an opinion on whether the NHL should continue to allow its players to participate
in the Olympics. He stated that he is only one of thirty owners and doesn’t have much influence
Chicago Blackhawks Turnaround
9
over the vote. The NHL Commissioner expressed a similar sentiment, indicating that, as the
commissioner, he didn’t have a vote, and therefore no opinion. Javidan and Walker (2012)
recognized that global leaders in the 21st century must establish a “global mindset” to influence
individuals from other parts of the world in order to help achieve their organizations’ objectives.
Scott (2014) suggests that the pace of globalization will continue to increase in the future, and
sports leaders must recognize that sports organizations contribute to and are strongly influenced
by this globalization.
It is imperative to the growth of the sport that NHL players continue to represent their
national teams in the Olympics. Wirtz should use his position as the owner of one of the most
popular teams in the NHL to guide the league’s position on this issue. Other measures to assist
in the globalization of the sport would be to bring back the North America vs. The World format
to the All-Star game and play the game in Europe. Taking the Winter Classic to a European
venue would also serve to increase exposure outside of North America. As an influential owner,
Wirtz should push for these changes as well.
Chicago Blackhawks Turnaround
10
References
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