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The Hartford Whalers Are Going Going ...

2264 words - 9 pages

The Hartford Whalers Are Going Going ...The Hartford Whalers are in a very tough situation at this time. When Peter Karmanos bought the team in May of 1994, he inherited the worst lease agreement at the smallest arena in the NHL. The Hartford Civic Center lease agreement creates profit for private companies; however, the lease causes the Whalers to lose money. The mall is owned and operated by Aetna; therefore it has nothing to do with the Whalers. The city of Hartford owns the coliseum, parking garage, and exhibition hall. The state of Connecticut pays a 1.6 million dollar annual leasing fee to take control of the coliseum, parking garage, and exhibition hall. The state hired Ogden Entertainment Services to run the coliseum, and Ogden receives all of the revenue from luxury boxes, the coliseum club, advertisements, rental fees and the exhibition hall. The state also hired Kinney Systems to run the parking garage and Service America Corporation to run the concessions. Both companies receive all revenue from the service they run. After all of this, there is no money left for the Hartford Whalers (Swift & Arace, 1+).The reason why these three companies keep all of the revenue from the Civic Center can be blamed on Richard Gordon, the former owner of the Whalers who did not want the city of Hartford to run the Civic Center. In 1993, the state decided to negotiate a new lease with the Whalers. The state of Connecticut did not want to run the coliseum so they hired three private companies to take this job. These companies would only run the Civic Center if they could keep all of the revenue from the service they controlled. Richard Gordon accepted this lease because this agreement would repay him for an additional ten million dollars in loses and he sold the team a year later (Lang 53-69).The Hartford Whalers is the only major league team in Connecticut and at the Civic Center. They currently have a bad lease which causes them to lose money. The Hartford Whalers play all exhibition, regular season, playoff games, the training camp, and some practice time rent free at the Civic Center. However, the Whalers get no revenue from concessions, luxury boxes, parking, and the coliseum club. The Whalers get sixty percent of the revenue from advertisements along the boards but no revenue from all other ads around the coliseum (Swift, 1+). The Whalers can leave Hartford after the 1997-98 season if they lose a cumulative thirty million dollars from 1994-95 through 1997-98. They must also pay a five million dollar penalty to leave Hartford. If the Whalers lose more than thirty million dollars and they choose to stay, they can subtract one-half of only thirty million dollars from the 25 million dollars they owe the state to complete the sale of the Whalers. This amount is 10 million dollars. If the Whalers do not lose thirty million dollars in this four year period, they must subtract one half of their loses from the 25 million they owe the state to complete...

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