Entrepreneurship and the Sports
Business
Case Studies Presented by Professor
Bruce Firestone and Mr. Ted Wagstaff
Telfer School of Management and
Algonquin College
Desmarais Building, University of Ottawa.
Room DMS 4101
February 24th, 2010 from 4 to 7 pm
Ottawa 67s
“WANTED: RICH UNCLE BUCK TO 
MILLIONS TO START MY SPORTS BIZ”
 Jeff Hunt and his brother relocate from NFLD to
Ottawa
 ‘Great’ JOBs– selling carpet cleaning at $3.50
per hour
 Jeff figures he can sell for himself
 Starts his own firm– he sells/his brother cleans
 Mom and Grandmother in tears
[Jeff Hunt (left) and CFL Commissioner Mark Cohon, Photo by Tom Hanson, Canadian Press]
Ottawa 67s
Jeff can SELL
Jeff’s insight: branding is important
‘Borrows’ Sears’ brand
Takes over all Sears Carpet Cleaning
coast to coast in Canada
Sears lends their name/get royalty in
return/money for nothing
Jeff visits Chicago
Ottawa 67s
Hung around long enough to go golfing
with Sears Roebuck VP
Turned down in US market
Months later: Houston we have a problem
Gets opportunity to turn around Sears
Carpet Cleaning in Houston
Makes sure he does a good job
Takes over US market
Ottawa 67s
A few years later– Sears decides to buy
back its own name!
Jeff is sitting on $40 million USD at age 40
What’s next?
Buy the Ottawa 67s!
Buys team from owner Howard Darwin
and his partner at low point– attendance is
less than 1,500 per game
Everyone tells him: DON’T DO IT!
Ottawa 67s
Everyone tells him:
* DON’T DO IT!
* YOU CAN’T DO IT!
* YOU’LL FAIL!
* IT’S A LOSER NOW THAT THE
SENS ARE IN TOWN!
Ottawa 67s
Makes every game an event
Brings in beloved stars of old (like Yvan
Cournoyer) to sign autographs and
collectibles
Sells out all 44 private suites by bundling
them with signage, sponsorship,
giveaways– things that leverage their
investment
Ottawa 67s
Turns a cost centre into a profit centre
> 500 charity requests per season
Instead of giving them money, Jeff gives
them discounted tickets that they can
resell for a profit
Never needs to turn anyone down!
67s set attendance records and is model
franchise
Ottawa 67s
Naming rights of Civic Centre never sold
Jeff creates a ‘lottery’
30 companies who each buy minimum of
$1,000 of 67s product (season
tickets/signage/suites/sponsorship)
entered into a draw.
Urbandale wins naming rights for a year
Ottawa 67s
67s set attendance records and is model
franchise, copied by not only other Junior
teams but by the NHL’s Ottawa Senators
and others
Franchise value is now vastly more than
Jeff’s purchase price
He is too young to retire!
Ottawa 67s– Lessons Learned?
 Jeff had confidence in himself
 Brand creates trust and trust creates the opportunity to
sell (more)
 Innovation, big and small, is important
 Never take ‘no’ for an answer
 Great execution counts– make a profit every year
 Buy low/sell high
 Turns a cost centre into profit centre– better yet, turn it
into a new distribution channel
 Never retire
 Started with nothing/bootstrapped his way to wealth
 Now leads Lansdowne Live and the return of the CFL to
Ottawa
Mont Cascade and Pro Slide
Rick Hunter, former Canadian Ski Team
Member
Retires after injury
Buys a ski hill
Mostly on credit and a bit of savings
Loses an atrocious amount year 1
Sitting on the hill in Spring of that year–
what to do?
Mont Cascade and Pro Slide
Family to support
Debt to repay
Bankruptcy facing him
Looks at hill/looks at lake/looks at hill
again
Eureka!
Mont Cascade and Pro Slide
Buy two straight plastic tubes from
manufacturer in Rigaud, Québec on (yet
more) credit
Buys a couple of pumps on (still more)
credit
One shack for women’s change
room/another for men’s
Reuse parking and food services and
toilets from ski hill
30,000 people show up that summer and
give Rick $13 to use his waterslides
Mont Cascade and Pro Slide
Saved!
Asks Rigaud manufacturer: “How about a
tube with a bend in it?”
“No we don’t do that.”
“Why not?”
“We do it that way because that’s the way
it’s always been done.”
Rick hires first engineer to design a
waterslide with a curve in it
Non trivial problem of g-force calculations
Mont Cascade and Pro Slide
 One day a Disney
executive hears about
this
 Rick gets the contract
for Splash Mountain
 Pro Slide is born
 World leader in
custom design,
engineering and
manufacturing of
fiberglass water rides
Mont Cascade and Pro Slide–
Lesson Learned?
Just because you’re a good skier doesn’t
mean you know anything about running a
ski hill– you need to be an expert
Opportunity is where you find it/disaster
focuses the mind
Never give up but be prepared to change
what you are doing if it isn’t working
What business is Rick really in? The
design business.
Which can not easily be knocked off or
outsourced to CHINDIA
Wilderness Tours and Mount
Pakenham
Joe Kowalski from Philly falls in love with
Algonquin Park
Decides to be an outfitter– taking visitors
on canoe trips
First summer is a disaster– turns out no
one wants a guide
But he learns that there are force 4 rapids
on the Ottawa River that no one had
traversed in over
a century
Wilderness Tours and Mount
Pakenham
Joe and his pal Robbie Rosenberger
scout out the territory
Joe sees BIG OPPORTUNITY
Less than 90 minutes away is a market of
800,000 outdoorsy people with lots of
disposable income
Next Spring, he and Robbie ask a farmer
for permission to set in to the river on his
property
They launch Wilderness Tours with two
rafts– Robbie in one and Joe in the other
Wilderness Tours and Mount
Pakenham
100s then 1,000s of people show up
Problem– while the rapids are terrific, the
ride is short
Joe embraces programming: swimming
the rapids/one channel for adventurous
paddlers/another for families who want to
bring kids/bungee jumping/kayaking/
mountain biking/rock climbing/volleyball/
horseshoes/paddle tennis/basketball/
soccer/ball hockey/lawn chess/softball
Joe starts to buy land
Joe starts to build a town
Wilderness Tours and Mount
Pakenham
4,000+ acres
owned by WT
Both sides of River
(Québec and
Ontario)
No development
permitted (other
than WT)
Problem– how to
keep good staff in
seasonal biz?
Wilderness Tours and Mount
Pakenham
Buy Mount Pakenham– winter time staff
reallocation
Another problem– smallest vertical
anywhere in the region
Turn Mount Pakenham into largest ski
school anywhere– safety becomes their
competitive advantage
Schools show up what ever the weather
More programming?
Add snow board park
Add tubing for non-skiers/boarders
Wilderness Tours and Mount
Pakenham
Further expansions– jet boat business in
Lachine and Niagara Falls
Another problem– smallest vertical
anywhere in the region
Turn Mount Pakenham into largest ski
school anywhere– safety becomes their
competitive advantage
Schools show up what ever the weather
More programming—snow board
park/tubing for non-skiers/boarders
Now selling fractional ownership for
Presqu’ile
Wilderness Tours and Mount
Pakenham– Lessons Learned?
Entrepreneurs would rather ask for
forgiveness than beg for permission
Start with nothing/bootstrap your way to
success/make a profit/cash is King
See and seize opportunities where others
fail to go
Outcompete your competitors
Be innovative and creative
Turn problems into opportunities– your
biggest weakness becomes your greatest
strength
Ottawa Senators
Terrace gets $18 per s.f. for its office
space/five years later it’s $6
What to do?
What does Toronto have that Ottawa
doesn’t have?
A zoo/Princess of Wales Theatre/
Wonderland/NHL Team
Conversation w/ Cyril Leeder and Randy
Sexton
Bring Back the Senators
Ottawa Senators
Cyril asks how much will it cost?
$35 million (est. based on NBA)
Actual NHL ask?
$50 million USD
Randy says let’s go for it
Cyril asks how will we pay for it?
Bootstrap capital, that’s how
Ottawa Senators
Buy 600 acres at $12,500 per acre
Put a NHL team and NHL-calibre building
in the middle of it
Drive up the value of the land to $112,500
per acre
Keep 100 acres for Scotiabank Place and
parking lot
Sell extra 500 acres for a profit of $100k
per acre or $50 million!
NHL franchise cost = ZERO!
Ottawa Senators
 Also get 32 Original
Corporate Sponsors
at $15k each
 And 500 Corporate
Sponsors at $500
each
 Sell 15,000 PRNs at
$25 each
 Raise $1,105,000 to
help with bid
 As Al Davis once
said: “Just win, baby.”
Anaheim Ducks
Can this work for a
large firm like Disney?
Sure
Buy a NHL expansion
franchise for $50
million
Of which $25 million
goes to the NHL and
$25 million to Bruce
McNall and LA Kings
Anaheim Ducks
But Bruce McNall gets $5 million per year
for five years
And Disney gets a leasing inducement
from Ogden for Honda Centre of $20
million
Plus Disney pledges their new asset for a
commercial loan of $30 million
Anaheim Ducks
So what is the actual franchise cost?
$50,000,000 - $20,000,000 - $20,000,000
- $30,000,000 = - $20,000,000
Minus $20,000,000!
This is called accretive buying– where you
have more cash on hand > a purchase
than before
Ottawa Senators and Anaheim
Ducks—Lessons Learned?
 When something isn’t working, do something new
 Learn from your competitor
 Commitment is important: “YOU’LL NEVER, EVER GET
A FRANCHISE IN … OTTAWA”
 You can bootstrap big projects
 Even Fortune 50 companies do that
 Sponsorship can apply to many industries and is a form
of Bootstrap Capital
 Keep your core competencies– outsource the rest
 If you are profitable, you will get financing not the other
way round
 Entrepreneurs make their own rules
Jim Balsillie, the Phoenix Coyotes and
the Hamilton Bid
If you want to join a private club, litigating
your way in probably not the best way
NHL a private club with 30 voting
members plus the Commissioner
Similar to a political campaign to become
Mayor– just fewer voters
Member clubs held in trust by their owners
for their fans
NHL believes they should not be moved
until all options exhausted
Jim Balsillie, the Phoenix Coyotes and
the Hamilton Bid
NHL leadership—two lawyers (Gary
Bettman and Bill Daly)
NHL leadership– no fear of litigation
Jim soundly defeated in Phoenix
courtroom
Expansion route probably would have
worked
Financial incentive for owners since they
share in expansion proceeds but not
relocations
Jim Balsillie, the Phoenix Coyotes and
the Hamilton Bid
“Do you want a new one or a used one?”
Relocation means disenfranchising fans in
other cities (Ask Cleveland Browns fans how they feel about the Colts)
New one creates opportunity for fresh
brand and sets stage for love affair
between fans and team
NHL agrees that TO and Buffalo do not
have veto
Expansion remains a possibility
Jim Balsillie, the Phoenix Coyotes and
the Hamilton Bid
But can you pay $400 million and make it
work? Sure by bootstrapping it!
Naming rights: $45 million
Arena management, product rights,
parking rights, F&B rights: $20 million
Pouring rights: $15 million
TV rights: $120 million
Debt: $100 million
Net Franchise Cost = $100 million
Jim Balsillie, the Phoenix Coyotes and
the Hamilton Bid– Lessons Learned?
Play to your strengths not your opponent’s
Be strategic
Litigation is a soul-destroying, time
sucking black hole
Bootstrapping lowers your risks and
increases your returns
“You can catch more flies with honey
than with vinegar,” Anon
Conclusion
Thank you
Questions?