RICHMOND, VA. – During the Civil War, the city of Richmond, Virginia became the capital of the Confederate government from 1861 to 1865 before being destroyed by retreating Confederate troops as the Ulysses S. Grant and the Union Army captured it days before the end of the war. As time went on, the city was rebuilt and has grown into one of the premiere business centers in the United States with nine Fortune 500 companies and four more Fortune 1000 businesses calling it home. As 2009 begins its third month, the economic crisis that is gripping the country is battering Richmond, causing countless business closings, layoffs numbering in the tens of thousands and a general tightening of the purse strings by those still lucky enough to have a job and enough income to get by. For those businesses still in operation, the days and months ahead have become a scary proposition as no one is really sure when the economy will turn back upward. Sports franchises are not immune to the sting of the financial downturn. Even seemingly successful teams like the Richmond Renegades of the Southern Professional Hockey League are having to assess the big picture and look for ways to continue to fit into the entertainment landscape of their particular markets. On February 24, in an obvious nod to the current situation and the unknown of the future, the Renegades announced that due to a myriad of reasons, they are planning to ask the SPHL for a suspension of operations for next season amid a projected loss of $250,000 to $280,000. “There’s probably not another state or a city in a state that has been slammed consistently as hard as Richmond has over the last six to eight months,” Renegades President & G.M. Allan B. Harvie Jr. said. “Everybody’s been hit by the economy so Richmond or Virginia is not any different than anybody else.” Harvie has been a part of hockey in Richmond for years. The present day Renegades are the second incarnation of the franchise that he started in the ECHL back in 1990. He sold that team after three seasons but returned three years ago to revive the franchise as part of the SPHL after the UHL River Dogs left the scene. Coming into this third year with the “new” Renegades, Harvie was beginning to see the fruits of a successful organization. The team had averaged 3,902 fans for 26 home games at the Richmond Coliseum during the 2007-08 campaign, bringing the ‘Gades bottom line to the break even point – quite an accomplishment in minor league hockey. Season ticket sales and corporate advertising sales were looking quite good for the 2008-09 season so the Renegades staff was feeling very good. Then the economy began to turn. “We were up probably 30-35 percent this year over last year in June and July so we were trending toward a really dynamic, successful year (in 08-09) and each day looked even better. Everybody was excited,” Harvie said. “Then of course, all of the gas prices started going through the roof for everybody which got people thinking. Then the stock market, the housing market – all of the same things that hit everybody hit here.” If there was ever a perfect storm of bad luck, Richmond had the misfortune of getting hit by it. Since Richmond is the state capital, the Renegades had been able to secure advertising and group ticket sales from agencies within the state government. When Governor Tim Kaine saw that the state was facing a 2 billion dollar deficit, he ordered all non-essential spending to cease, meaning that whatever revenue the Renegades had coming in via state agency agreements was wiped out. It was just the tip of the iceberg. For Harvie and his staff, it was something akin to watching a chain of dominos fall. “You’ve got the companies that deal with the government who now have lost their main meal so they start calling up and cancelling everything they’ve got because they don’t have a source of income anymore because the government shut their programs all off,” Harvie said. “Once that’s all over with, you sit back and you’ve lost a substantial amount of business which is what happened with it.” Although a daunting task, surviving the loss of revenue from the government sector and its subsidiary relationships is doable as long as other businesses stay solid. This is where Richmond took its third hit. Companies such as Circuit City, LandAmerica Financial Group, SMK, Mattress King and others – all Richmond based companies – were forced to file for bankruptcy or worse. Add in the myriad of financial institutions and brokerages that suffered some or severe damage and the recipe for disaster is coming to a boil. Of course, if the bigger companies are having problems, the smaller ones – the ones that make up a large percentage of advertisers – have problems as well. Many of these types of companies account for dasher board advertising, special event sponsorships and group ticket sales. “We’ve got a large number of small sponsorships as well as a small number of large sponsorships. We’re pretty successful that way in getting sponsorships. All of our dasher boards are sold. If you ever watch a game on the B2 Network, most of our ice you can‘t find any white space on it,” Harvie said. “If I went back to the Coliseum and sat there and looked around the boards, probably right now off the top of my head 40-plus percent of those are either out of business or on the verge of going out of business. If it’s like this right now, what’s it going to be like for everyone going forward?” The first place that Harvie and his staff attempted to go in moving forward was in ticketing. With nightly attendance being down from a year ago due to people becoming less willing to partake in “discretionary spending”, the Renegades altered their pricing to offer all seats in the upper bowl of the Richmond Coliseum for $5. Then came the roll out of playoff packages since Richmond has been in the top three in the league (four qualify for the post season) for a while. Next, on February 14, the team announced that season tickets packages and renewals for next season were available. Over the subsequent ten days between February 10 and February 24, Harvie said that 20 season ticket packages were purchased, adding to the simmering pot of trouble and prompting the team to announce its decision to ask for a suspension of operations for the 2009-2010 season. By Friday, February 26, Harvie was announcing a “Save the Gades…Pack the Coliseum” plan for the final three home games that will make all lower bowl seats available for $10 to go along with the $5 upper bowl seats. “Basically, we knew that if we were to return next season, we would need at least $250,000 – $280,000 in order to make up for the anticipated shortfall,” Harvie said in the release announcing the new campaign. “If we decreased the pricing and made the lower level $10 and the upper level $5 and sold out for the final three games we could make up $150,000 or perhaps even more. That would make a huge difference in the needed shortfall. So now, instead of looking outside for funding, we have gone to our fans and asked them to help us sell out the Coliseum for the three games. In the process, we will create a great number of new fans and create a stronger bond with our current fan base.” Harvie told RichmondBizSense.com that since starting the “Save the Gades” plan and putting season ticket packages back on the table for sale, the response has been positive. The team announced on March 2nd that with the help of the Holiday Inn I-64 Crossroads – one of the team’s corporate sponsors – they will be holding a pep rally on March 5th to “get our fans and sponsors excited about keeping the Renegades in Richmond” according to Harvie. The team has also been soliciting “outside-the-box” ideas from anyone and everyone on how to close the financial gap. When asked about whether the team faced any deadlines should they find the money to continue, Harvie noted that the Renegades need to inform the Coliseum of their intentions by April 30 in order to exercise the first of two, one-year team-held extension options on the building lease. Building lease aside, the biggest problem is knowing whether or not the economy and financial situations will be turned around soon enough for the Renegades to continue on. “It’s really difficult right now to judge and see what the market is going to do and what the economy is going to do. I’m not an economist. I’m not a stock broker. I’m not anything but a small business guy trying to keep a sport alive in a city,” Harvie said. “I’ve got to look at things realistically and say is this going to continue, is this economy going to stay like this. If we’re seeing this type of economy right now, what are we looking at come April, May, June, July and August or next September, October and November? What’s going to happen then?” At this point, no one knows the answer to Harvie’s question but the longer the economy stays like it is, the more company he’ll have asking it. Contact the author at don.money@prohockeynews.com
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