Worcester Sharks New Leadership: Cleaning House, Rebuilding Team

Friday, July 12, 2013

Steve D'Agostino, GoLocalWorcester Business/News Contributor

COO John Tortora (center) announces the long-awaited addition of Joe Will (right) and Jon Gustafson (left) to the Worcester Sharks team.

For some time, Worcester Sharks fans have been waiting–to put it in hockey terms–for a shift change at the DCU Center. That moment arrived in rapid sequence, following the ascendancy last January of German billionaire Hasso Plattner to majority ownership of Sharks Sports & Entertainment.

In May, Mike Lehr, who was the Worcester Sharks’ original president and CEO, got iced as executive vice president of SSE. He was joined at the time by SSE executive vice presidents Charlie Faas, who was also CFO, and Malcolm Bordelon.

Later that same month, things crystallized further when Plattner appointed long-time SSE general counsel John Tortora, a veteran of the pro-hockey business world, to be chief operating officer. In short, Tortora is responsible for SSE’s overall operations. For the first time in its history, SSE had a C-level executive with a strong hockey background instead of skills developed in other sports.

The SSE icing show continued on June 28 with the firing of Michael Mudd as president and CEO of the Worcester Sharks, and the elimination of those titles. This past Wednesday, the local leadership team became truly ice-ready as SSE announced the appointment of pro-hockey veteran Joe Will as general manager in Worcester, overseeing all hockey operations. In addition, SSE tapped another pro-hockey veteran, Jon Gustafson, as vice president of business operations in Worcester, also overseeing all Sharks Ice centers.

During the past two seasons, SSE has lost a total of more than $30 million–much more than half of it during the latest season. The silver lining: During the 2012-’13 season, the San Jose Sharks of the National Hockey League made the playoffs for the ninth season in a row–getting eliminated in the semi-finals. The dark cloud: SSE’s minor-league franchise, the Worcester Sharks of the American Hockey League, missed the playoffs for the third consecutive season–posting their second losing season in a row.

It’s no wonder that the Worcester Shark’s home attendance is anemic. During the ’12-’13 season, an average only of 4,374 Sharks fans took in each home game at the DCU Center–well below the AHL’s regular-season home-game average of 5,711–earning Worcester the lowly No. 24 rank among the 30 AHL teams.

On the less-dark side, at least Worcester bested Springfield in home attendance for the ’12-13 season. The Falcons, who also had a losing record, attracted an average of only 3,906 fans to their home games at the MassMutual Center.

Enhanced communication and collaboration

COO John Tortora, in Worcester on July 10 to announce the latest management changes, maintains that no more local heads will roll. “We don’t think so,” he tells GoLocalWorcester. “The organization felt, at the Sharks Sports & Entertainment level, that perhaps we didn’t need the ‘president’ role.”

Tortora calls Michael Mudd, who was recently let go as president of the Worcester Sharks, “a great ambassador for the organization and a great friend to the community, and added tremendous value to the Sharks as a whole during his tenure here. But as we looked at our operation, both in San Jose and here in Worcester, we felt that perhaps we could do things a bit more efficiently and a bit more streamlined without the ‘president’ role in play. So we basically eliminated that position.”

Going forward, Tortora says, the addition of Worcester Sharks responsibilities to the job description of both Joe Will and Jon Gustafson “will further enhance the communication and the collaboration between Worcester and San Jose. Their experience with our franchise [coupled with] their overall experience should be a benefit to the Worcester operation.”

More importantly, Tortora continues, this is a moment for the staff of the Worcester Sharks “to embrace this change and to feel empowered by it.” He points to Eric Lindquist, director of public relations and broadcasting, Mike Myers, senior director of business and community development, and Suzanne DeGeorgesenior director of sales and marketing. They are, he says,“three very strong directors…who have been here since the franchise moved from Cleveland [in 2006]. I think it’s important that we give them an opportunity to grow and to continue to make this organization as strong as it is.”

Aiming for a sustainable business model

Following are edited highlights of a July 10 interview with John Tortora, Joe Will, and Jon Erickson, on how they plan to maintain and strengthen SSE’s minor-league franchise and presence in Worcester.

SSE continues to lose money. The deficit during the lockout-shortened ‘12-’13 season was, as you have described it, “substantially higher” than the $15 million lost during the ‘11-’12 season. Is that likely to change for the better in the ‘13-’14 season, which starts this October?

Tortora: It will change for the better because about a third of the loss for the organization as a whole during the ’12-’13 season was due to the [player] lockout. The lockout was necessary to achieve the objectives of the [NHL] that the teams wanted to meet, and they’ll be beneficial for us going forward. But we [at SSE] still suffer double-digit losses each year - $10 [million], $15 [million], $17 million, as the case may be–and we need to improve upon that, both in San Jose and in all aspects of our organization.

Hasso Plattner, the new majority-owner of SSE, has said that he’s not looking to make a ton of money in pro hockey–he’s not looking to lose a ton of money, either. What are his marching orders? Is it to just break even with the whole organization, maybe make a little bit of a bottom-line profit?

Tortora: I think he wants a sustainable business model that he can have confidence in as a stand-alone operation, going forward. And when you’re losing $10 [million] to $15 million a year and even more, that’s obviously not a sustainable business model.

…In terms of going into other areas outside of hockey, the organization has done that over the last 10 to 15 years with limited success. We’ve experienced some limited success with tennis. We were in corporate publishing for a while, we were in corporate merchandise for a while, we had the Strike Force mixed-martial-arts property, [and] we had an ownership interest in lacrosse.

Were all of those synergistic, or did you find that too many of them weren’t?

Tortora: Over time, we realized that they weren’t contributing as positively to the bottom line as we needed them to. So we slowly started to divest ourselves of these properties over the last few years, and that in part led to the [management] changes we had in San Jose about a month ago and in part to the change here [in Worcester] a couple of weeks ago.

A top goal in SSE’s mission statement, right after winning the Stanley Cup and growing hockey in the San Jose region, is, as you just noted, the creation of a “sustainable business model.” How long do you think that’s going to take?

Tortora: In theory, it’s a goal to get to every year. But realistically I think you want to show progress year-over-year to where you get to a level where the Board [of Governors] is comfortable with the performance of the operation as a whole.

Has owner Hasso Plattner given you a specific timetable–a date certain?

Tortora: No. But the sense from the Board is [to make] substantial progress, going forward.

Did the recent leadership changes in Worcester result at all because of the play on the ice?

Will: No, not at all. Our goal is to be the development team for the San Jose Sharks, here in Worcester. And to that extent, [the Worcester management] has done a great job of getting players prepared for the National Hockey League. …There have been a lot of players [who were made] ready for the NHL, coming out of Worcester. And Worcester has been great to prepare the players not just as ready to play on the ice but [also to] be good citizens and members of the community. …So that part’s been successful.

We do understand [that] in the last couple of years we’ve gotten a month away from the playoffs, and the team’s kind of dropped off. We will address that. This week, the two [Worcester] coaches are out in San Jose–they’re meeting with the head coach of the [San Jose] Sharks–and they’re working at ways to work together to have the Worcester team play exactly like the San Jose team. In San Jose, we’ve been in the playoffs [each] of the past [nine seasons]. Our intention is to do that here [in Worcester] …

I will have a little more presence with the Worcester team [than SSE Vice President and Assistant General Manager Wayne Thomas, who] did a fabulous job with this team in getting all of these players ready to go [play]. Wayne is also the goalie coach in San Jose, so he’s always with the goaltenders [there] and it just limits his time in [being able] to come out here [to Worcester]. I’m going to be able to be out here a bit more, and I plan on doing that.

What are the biggest challenges and opportunities for the Worcester Sharks between now and the start of the ’13-’14 season in October?

Will: It’s just really those little tweaks to get [Worcester] to play exactly the same way as San Jose, get us competitive at a really high level to play some exciting hockey, and to get us in a position to play well every night [during the regular season] and to be able to go into the playoffs–along with, again, don’t take a step backwards in terms of developing [Worcester] players for [the San Jose team.] This week, we actually have a development camp with 45 players, in San Jose. A majority of them will be headed to Worcester. So we’re already started on next season.

Jon Gustafon: What’s your biggest challenge and opportunity as vice president of business operations in Worcester and in also overseeing all Sharks Ice centers?

Gustafson: First and foremost, [it’s] just getting up to speed. Today’s my first day here in Worcester, meeting the staff, so it’s very important for me to integrate and meet all of the people here–especially, the key folks–and get on the same page and move forward.

John Tortora: How often do you plan to visit Worcester during both the regular season and the off season?

Tortora: I’ve been here twice over the last two weeks and I was here once last November, so I plan to be here quarterly. I’m on the East Coast regularly for NHL business, and taking a drive or a flight to Worcester will not be too difficult.

What are the key strengths and assets of the Worcester market–and how do you plan to leverage them?

Tortora: The key strength is the fan base. There is a very strong affinity between the fans and the Worcester brand. We expressed our commitment to the City of [Worcester] by extending out lease with the DCU Center back in November. And the City has expressed their commitment to us by spending millions of dollars in renovating the DCU Center. So I think what we want to try to do is, leverage that commitment to generate even more fan interest by adding more value to our fan base, by getting more people into the building [and] more corporate engagement, and to have more of an entertainment experience when a fan or a family comes to a hockey game.

The average home-game attendance during the past season was about 4,300.

Tortora: But it ranked [only] 24^th in the AHL, and I think we would like to see ways that perhaps that number can be improved.

Practically, what can you get the attendance figure up to?

Tortora: We’re not sure. We’re going to have to do an evaluation, to see what makes sense. We’ve got to look at the marketplace, talk to the staff here, try to learn what has worked in the past and what can work in the future, and also [learn] what the fans want. It’s very important to engage the fans in this process. [After this interview], we’re meeting with the Booster Club president because he represents an important group of constituents. We also want groups like Tim Murray and the [Worcester Regional] Chamber of Commerce to be engaged, [as well as] Mike O’Brien, the city manager. Both of these gentlemen and both of their organizations have been very supportive of the Worcester Sharks, and their involvement with us will only make us a better organization.

What are the key weaknesses and liabilities of the Worcester market–and how do you plan to address them?

Tortora: A lot of markets, whether it’s Upstate New York or Central Massachusetts, have been suffering since the economic downturn in 2008. We’ve seen some very positive signs of redevelopment here in Worcester, so what may have been a weakness over the last three or four years is now turning into a positive.

And the national economy seems to be coming back.

Tortora: Absolutely [yes], so we [as the Worcester Sharks] need to rise as the economy rises here in the [Central Mass.] marketplace.

The idea is to make Worcester a sort of glorified suburb of Boston. For people who can’t afford to live in Boston–because the housing and cost-of-living prices have skyrocketed in the last 25 years–Worcester’s a great place to live and raise a family, and do the commute out to MetroWest or Greater Boston, if that’s where you work.

Tortora: That’s absolutely correct. And if people are doing that commute, they’re probably bringing more income [back] into this community than may have been in the past. We want to engage them and have them partner with us in many ways.

What do you need–what do you expect–from Worcester business and political leaders, to make this all work well for the Worcester Sharks?

Tortora: [They need] to support the team in ways that they have not done so before. Many [of them] have supported [the team] with sponsorships and group-ticket sales and the like. I think we need more of that. At the end of the day, we are Worcester’s only professional sports team and we’ve been here for seven years.

Worcester has been through a lot of pro sports teams over the past two decades and the Sharks look to be the first one that can be healthy and sustainable for the long term.

Tortora: We would like to be, but we need the community support as well. But it’s also important for the community to provide feedback to us. So if there’s something we can do better, we want to hear about it. Some of the tweaks that we’re making on the hockey side are designed to have a team that mirrors how we play in San Jose–and the way we play in San Jose is nine straight playoff appearances–so that’s an adjustment we’re making, so we’re going to respond to the community in that way. But overall, we need the community’s ongoing and increased support. And if you want good entertainment, come watch professional hockey.

The Worcester Sharks have a youth hockey program. Is there anything else the team is doing to get out into the community?

Tortora: We have a lot of schools in the area–both private and public schools at the high-school level and now the colleges [with hockey teams]. We want to tap into those markets as well and generate fan bases, so that when those consumers are in the workforce, they can take some of their discretionary income and invest it in the Worcester Sharks.

…One final thing: While Jon, Joe and myself are all based in San Jose, San Jose is not that far away. We expect to have a very ongoing and strong dialogue with the people here in Worcester, and I think that’ll make our commitment to the Worcester community even stronger.

The full interview with Tortora, Will, Erickson and Lindquist will air on Sunday, July 21 at 10 p.m. (ET) on The Business Beat on 90.5 WICN and in streaming audio at WICN.org. By Monday, July 22, it will be available 24/7 in MP3 format on the Business Beat podcast page.

Steven Jones-D'Agostino is chief pilot of Best Rate of Climb: Marketing, Public Relations, Social Media and Radio Production.