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Miracle on ice: How Sabres turned it around

The Buffalo Sabres — a franchise that sank into bankruptcy five years ago —  has emerged as a bright spot and could offer a blueprint to NHL teams that are struggling to sell tickets and land corporate sponsors. SportsBiz Spotlight, by contributor David Sweet.
Brian Campbell, Daniel Briere, Tim Connolly
The Buffalo Sabres have been a success on the ice ... and off. In fact, the Sabres have emerged as a bright spot and could offer a blueprint to teams that are struggling to sell tickets and land corporate sponsors.David Duprey / AP file

When Larry Quinn, managing partner of the Buffalo Sabres, approached fans about buying season tickets in 2003, he was hastily rebuffed.

”The thing we heard the most was, ‘My kid doesn’t want to go with me,’ “ recalled Quinn. Companies who already held season tickets reported they couldn’t give them away to clients.

Faster than you can say Gil Perreault, the mood turned.

“Now, we hear about kids fighting over who gets the tickets,” Quinn said. “Companies now call us for tickets.”

As the National Hockey League prepares to drop the puck on another season Oct. 3, troubles plague the 81-year-old league. The Nashville Predators, only a decade old and a linchpin of the league’s new-market strategy under Commissioner Gary Bettman, are in ownership limbo at the moment.

Of the six teams drawing the least number of fans during the 2006-2007 season, five – Boston, Chicago, New Jersey, Washington and the New York Islanders – sit in major markets that need to thrive to help spur national interest in pro hockey. Of these five franchises, none of them even averaged 15,000 customers a game. The easiest job in sports writing is to compare the annual Stanley Cup television ratings to that of some absurdly bad TV show or third-tier sports programming (roller derby, anyone?).

But Buffalo — a franchise that sank into bankruptcy five years ago — has emerged as a bright spot and could offer a blueprint to teams that are struggling to sell tickets and land corporate sponsors.

When billionaire B. Thomas Golisano bought the franchise for $92 million in 2003, Buffalo lured fewer than 6,000 season-ticket holders. That moved higher in Golisano’s first year, the 2003-2004 season, mainly because he slashed season-ticket costs by about 25 percent to try to draw fans.

By the start of the 2006-2007 season – on the heels of a strong playoff run the year before – the Sabres counted almost 15,000 season-ticket holders. During their recent 62-win campaign, they sold out every game in 18,600-seat HSBC Arena. The franchise expects to repeat that success this year, starting Oct. 5 against the Islanders.

What happened? No doubt a much-improved team helped, as did a marketing campaign where pictures of players in street clothes (“It was like a fashion show,” Quinn said) blanketed Buffalo and helped fans get to know their heroes without helmets. And yes, by its nature, the frigid city on the Canadian border is a hockey-obsessed town.

But there’s more to it. When Golisano — the founder of Paychex, a payroll services company — took over, he emphasized three points: the franchise had to be a great place to work, it needed to be a great product for fans, and it had to make money.

Though scores of employees decided it wasn’t a great place to work after being let go soon after Golisano’s arrival, those who remained have enjoyed a franchise on the rebound. A great product (a deep run in the playoffs last year sparked by a high-flying offense recruited mainly from its farm system) has engaged fans, the most loyal of whom have appreciated being pampered.

”A lot of sports teams do ticket promotions that are not fair to season-ticket customers,” said Quinn. “We made sure the season-ticket holder got the best offer, not the worst.”

At the same time, the Sabres have focused on persuading youngsters to attend by offering a handful of games affordable to families.

”I can’t overstress the importance of young people,” said Quinn, a former developer who helped build HSBC Arena in a previous stint with the Sabres under one-time owner Seymour Knox III. “If you get a 15-year-old to love the game, you have him for 50 years.”

Corporations have jumped in. Whereas HSBC Arena’s 80 suites were not even 75 percent sold five years ago, all leases are spoken for now. Sponsors were once fleeing; now, new ones, such as Dunkin’ Donuts and Blue Cross Blue Shield, have climbed aboard.

Unlike the National Football League, where franchises receive about $100 million a year in television revenue, NHL teams can’t count on such largesse. The league’s primary deal, with cable’s Versus, is worth a little more than $2 million per team annually.

Golisano & Co. have signed a local TV deal with MSG Network through the 2016-2017 season believed to be in the high seven figures annually, in which the Sabres bring in money by selling advertising and where they control production (whose costs they bear). Under previous owner John Rigas, founder of cable firm Adelphia Communications, the team’s broadcast territory through Empire Sports Network barely made a dent in the Empire State. Today, their games can be seen as far away as Albany, helping to mint new fans.

Add into the mix the fact that the 2005 labor agreement capped player salaries (no more than $50.3 million per franchise this season) and that Buffalo has received revenue sharing from the pact, and Golisano’s final goal has been achieved. The Sabres have turned a profit the last two years — the first times, Quinn believes, it has been in the black during its 37-year history. And the franchise’s value jumped 43 percent to $149 million in 2006 from two years before, according to Forbes magazine.

The NHL is feeling so good about the franchise that it scheduled an outdoor game, which Pepsi will sponsor, at Buffalo's Ralph Wilson Stadium on New Year’s Day. The way things are going these days, kids will be fighting over tickets (after all, 42,000 were sold on the first day of availability) to shiver in a massive football stadium and watch a true rags-to-riches story.

David Sweet, a sports business writer in the Chicago area, can be reached at