Vancouver Canucks Chase a Stanley Cup

The Vancouver Canucks have become one of the ?most consistently profitable franchises in ?the NHL. But how much longer can it ?last without a Stanley Cup?

Canucks COO Victor de Bonis is the latest in a string of savvy operators who’ve helped turn the team into a moneymaking machine.

The Vancouver Canucks have become one of the 
most consistently profitable franchises in 
the NHL. But how much longer can it 
last without a Stanley Cup?

For a building that has entertained sellout crowds more than eight years running, Rogers Arena can be a pretty quiet place. It’s an off day and only a few staffers wave hello as Victor de Bonis, the Vancouver Canucks’ chief operating officer, strides along the corridor near the Canucks locker room, pausing to say hi to one of the organization’s carpenters. “Might have a job for you later,” he calls out behind him, adding, “You always need a good carpenter.”

Long-suffering Canucks fans hope the franchise has the right builders in place, but 40 years of disappointment have created a natural wariness. De Bonis can’t answer for all four decades, but he was here by the time they built this joint and named it after a car company. In fact, young de Bonis was parking cars at the Pacific Coliseum back when the ’80s Canucks were there putting together 11 straight losing seasons dressed in multi-coloured pajamas. After a detour through accounting firm KPMG, de Bonis joined the Canucks operation in 1994, and has since seen various regimes come and go – “three ownership groups, six or seven presidents, just as many GMs and maybe more coaches,” he guesses. At the heart of an NHL franchise in a hockey-crazed town, de Bonis performs a job only tangentially related to the on-ice action. He must attend to the sort of hockey business that draws no roars from the crowd, managing the day-to-day complexities presented by a major sports organization. While the GM sets the team vision, the COO is tasked with making the big machine go. Unlike GM Mike Gillis, whose day-to-day primary focus is on hockey operations, de Bonis says, “mine is on business operations.”

Financially speaking, de Bonis and company are doing something right. If the Canucks were publicly traded they would be a strong buy. The Canucks currently rank eighth on Forbes magazine’s annual list of most valuable NHL teams, with an estimated valuation of US$262 million – two slots and $68 million higher than on the same list in 2006. That number is also $55 million higher than the amount Francesco Aquilini reportedly paid for the team in 2005. According to Forbes, “The Canucks have become one of the most consistently profitable teams in the NHL, earning $70 million in operating profits over the past four years (only the Maple Leafs, Canadiens, Rangers and Red Wings did better).”

Look around a packed and buzzing Rogers Arena – if you somehow manage to get a ticket – and it’s easy to forget that it was not always so. In 1997 designated saviour Mark Messier was leading his team into the wilderness, Trevor Linden was soon to be headed for the New York Islanders, and GM Mike Keenan was busy alienating players and fans alike. Attendance of 9,000 in the 21,000-seat arena was not uncommon. What powered the Vancouver franchise on the end-to-end rush that has made this one of the most admired teams in the NHL? 

Not all of the team’s current success is of its own making. A soaring loonie has been a boon for a team that pays salaries in U.S. dollars while collecting revenue in Canadian. And with their current popularity, the Canucks are tapping a fan base that was always there, waiting for a winner, in what is essentially a one-and-a-half-sport town. The arena, owned by Aquilini and his brothers, is a profit machine that reportedly generates $25 million a year in private boxes and corporate suites alone. As the team enters its fifth decade of operations, the case can be made that it is now at a historic peak, lacking only a Stanley Cup to be recognized as one of the elite NHL operations. But if current management deserves kudos, it has built on foundations laid by predecessors now long gone.


Arthur Griffiths, Canucks
Arthur Griffiths, team owner from 1984 to 1997;
Brian Burke, Canucks
former GM Brian Burke;
Dave Cobb, Canucks
ex-Canucks COO (and current BC Hydro CEO) Dave Cobb;
John McCaw, Pat Quinn, Canucks
and former owner John McCaw (left) with then GM Pat Quinn.

The Canucks’ debut

When the Vancouver Canucks played their first regular-season game on October 9, 1970, many felt it was at least three years overdue. Vancouver was thought to be a natural choice for one of the first six expansion franchises in 1967, but the city’s bid was rejected. The rumour mill blamed opposition from the Toronto and Montreal franchises, unwilling to split CBC-TV revenues. But when the Oakland Seals ran into financial trouble almost immediately, a group attempted to relocate the franchise up the coast. NHL officials nixed the move but promised an expansion team to an ownership group led by Minnesota businessman Tom Scallen at a price of $6 million, three times greater than the 1967 fee. 

Frank Griffiths bought the team in 1974 and his son Arthur took over in 1981. Arthur had big plans for the company, centred on a new arena. “In the ’80s and ’90s, it was very hard to make the Canucks into a real business, as our costs where spiraling and our revenues were relatively flat,” Arthur Griffiths recalls. “We played in an arena we did not own or control. Our revenue was in Canadian dollars, often down around 64 cents against the U.S. dollar, and our player costs were in U.S. dollars.” Overextended, Griffiths was forced to sell his majority stake in 1997 to reclusive billionaire John McCaw Jr. and his Orca Bay Sports and Entertainment group (since renamed Canucks Sports and Entertainment).

Globe and Mail columnist and former Vancouver Sun sports reporter Gary Mason believes the younger Griffiths made matters worse with questionable moves such as his purchase of the NBA’s Grizzlies. But the Canucks’ financial problems started much earlier. “It was a mom-and-pop operation, an old-school franchise,” Mason says. “I don’t think Frank was much into maximizing profits.” 

Tom Mayenknecht is the host of The Sport Mar­ket on TEAM 1040 radio and former vice-president of communications and public relations for Orca Bay. He believes Dave Cobb, the man hired by Arthur Griffiths as vice-president of finance and who ultimately rose to COO under McCaw, played a key role in transforming the Canucks’ fortunes. “What he had, which his immediate predecessors did not have, was the important blend of busi­ness acumen, as an accountant and financial manager coming out of KPMG, and hockey passion,” says Mayenknecht. (It was Cobb who brought ex-KPMG colleague Victor de Bonis into the Canucks organization.) “He gained the trust of the McCaw ownership and gradually ensured that the right decisions were being made with on-the-ground input. He was also terrific at collaborating with Brian Burke, who also gave the Canucks a strong face in the community.” 

Burke had been hired as GM in 1998. It was not his first go-round with the Canucks; he’d previously served as director of hockey operations under GM Pat Quinn in the late ’80s before doing a tour in the GM offices of the Hartford Whalers and serving five years as the NHL’s vice-president and director of hockey operations. But in the middle of the disastrous 1997-98 season, the Canucks came calling again. Mason believes Burke’s job as GM was made easier by Cobb’s operational savvy: “Brian Burke and Dave Cobb led the transformation of the Canucks into one of the best franchises in the NHL. Burke rebuilt the fan base while Cobb rebuilt the financial side.” 

Cobb and Burke may have been working different parts of the arena, but in hockey there’s no separating cause and effect. Turning around the Canucks’ financial picture was intrinsically linked to improving the on-ice product. Burke’s greatest on-ice legacy may have been the Sedin twins, snapped up together after some draft-day wheeling and dealing in 1999. He also re­acquired Trevor Linden and watched Markus Naslund and Todd Bertuzzi gel into one of the league’s most feared combinations. On the financial side, Cobb’s task was eased by the revenue streams from the arena, advantages unavailable to the Canucks of the 1970s and ’80s. Burke, now president and GM of the Toronto Maple Leafs, looks back at his and Cobb’s Canucks tenure with satisfaction. “Our loss at the close of [the 1998] fiscal year was $36 million, I believe,” Burke says. “Four years later it was zero.”

The Canucks’ moneymaking power

Under the ownership of Francesco Aquilini, the upward trend has continued. While de Bonis will not discuss numbers, Forbes estimates Canucks revenues for the 2009-10 season at $119 million, with profits of roughly $18 million. Revenue per fan is calculated at $56, among the league’s highest. 

One of the ways the Canucks have accomplished that in recent years is by aggressively pushing to develop ancillary revenue streams, including merchandising. “From a merchandise perspective, we are near or at the top of the NHL,” de Bonis claims. “This year we are the second-highest in the league ‘per caps’ at home games – ‘per caps’ meaning the average amount spent per fan on merchandise at a home game.” But it remains a gate-driven league, and without the massive U.S. broadcasting deals typical of the NFL, NBA and Major League Baseball, arena economics – general tickets sales, club seats, suites, concessions and arena advertising – are critical success factors for NHL teams. Not surprising then that de Bonis says the arena experience is the Canucks’ major focus. “Since Mr. Aquilini took over there’s been $40 million spent on upgrading the visual and audio facilities at the arena,” he says, “and we’re not finished yet. The fan experience is the most important driver for us – making sure the building is full and the experience is great.”

Eating into those revenues, however – especially for wealthier teams such as the Canucks – is the NHL revenue-sharing agreement and salary cap, both of which were established in the wake of the 2004-05 NHL lockout. NHL revenue-sharing is administered through a bewilderingly complex formula. The top 15 money-­earning clubs are ineligible for funds; large markets with over 2.5 million households are also ineligible for most assistance (which eliminates struggling teams such as the New York Islanders). Not all the other franchises get funds – lesser teams can still make enough to be disqualified. Teams that do get money must meet conditions, including an average attendance of 14,000. This leads to situations such as the Columbus Blue Jackets promotional offer this season that included a game ticket, hot dog, popcorn, Pepsi, a hat and a voucher for a free skate at a nearby rink, all for $25. With luck, the free hats would come out of Columbus’s share of the equalization money, which amounted to approximately $140 million last year. 

The Canucks, as one of the top money-earners, are on the paying end of the arrangement. De Bonis will not confirm the exact amount, but an October 2008 Globe and Mail story estimated the Canucks’ contribution to the previous year’s revenue sharing at $10 million.


Orland Kurtenbach, Canucks
Original Canucks captain, Orland Kurtenbach.
Stan Smyl, Canucks
Stan Smyl, captain in the ’80s.

The NHL salary cap

The league salary cap may be even more complex. Calculated according to total league revenues, this season the cap is set at US$56.8 million, with a salary floor of US$40.8 mllion. All franchises are required to make total salary payments fit within that range, but figuring out how multi-year, performance-bonus-laden deals are calculated against the cap is enough to make your eyes bleed. Nevertheless, even though the Canucks are now in the NHL’s upper echelon, Mason believes the salary cap has been a positive development for the team. “Think of the pressure there would be on Aquilini to spend to the skies and sign every free agent on the market” if there wasn’t one, he says.

The Canucks’ recent on-ice performance suggests they are masters of the cap art. But there are second-guessers in every paid seat. A few years ago the Canucks decided that goalie Roberto Luongo would be the cornerstone of a championship team. His massive 12-year, $64-million contract extension is now considered by some to have been a major miscalculation. On the flip side are the Sedin twins: five-year deals at $6.1 million each. “Two players that good for that money? Best deal in the league,” Mason says. 

Attracting the right players is not just about dollars, especially now that teams are limited in how much they can offer. Care and feeding of the modern NHL skater can involve strategies that might seem counter-intuitive from a strict bean-counting standpoint, like the kind of inducements that would have caused 1970 Canucks management to spit up their beer. The franchise recently hired a “sleep doctor” to advise on optimum flight and travel arrangements in an effort to mitigate the difficulties of brutal West Coast schedules. A meditation room has also been provided for players. Don Cherry be damned – this stuff not only makes the athletes happy but, according to Mason, pays financial dividends at contract time: “A franchise starts to get a great rep around the league, and players hear about that. The result is you get some discounts – players who sign for less just to be part of a first-rate organization.”

Trevor Linden, Canucks
Trevor Linden, a captain in the ’90s.
Sedin twins, Canucks
Current team stars Henrik and Daniel Sedin.

“We have more resources now to build a competitive team,” de Bonis acknowledges. “It makes a difference for the players. The business model hasn’t changed, just the delivery. We want to deliver a world-class experience.” 

In this 40th-anniversary season, when Trevor Linden and Markus Naslund have seen their jerseys hoisted to the rafters, executive alumni have scattered far and wide. Brian Burke now struggles to satisfy the rabid partisans of Toronto; Dave Cobb (who left the Canucks at the same time as Burke, in 2004, to join VANOC) is now CEO of BC Hydro. Arthur Griffiths is based in London, working for an event security and services company called Contemporary International as well as sports apparel company Bosco Sport. Like almost everyone who follows the Canucks’ fortunes, Griffiths identifies the remaining challenges simply: “Winning the Stanley Cup.”

It’s not just a fan’s desire. The recent history of the franchise suggests what prolonged mediocrity can do to the bottom line. After the team’s 1994 run to the finals was followed by several disappointing seasons, sellouts were hard to come by. While the Toronto Maple Leafs have shown that a consistently bad Canadian team can still be a financial powerhouse, it’s a risk – Ottawa and Edmonton (17th and 20th on the Forbes valuation list) prove that it usually doesn’t work out. It’s the nature of the hockey business that your forward lines often determine your bottom line. “You do everything you can,” de Bonis says, “but you can’t tilt the ice. You can’t move that puck just a half-centimetre to the right so that it goes in instead of hitting the post.” 

So is Vancouver now a Toronto-style market? Will the fans keep coming, win or lose? De Bonis believes that, within reason, fans will hang on. “You want hope,” he muses. “You want to see that we’re on the right path and one of these years the stars are going to align. Lots has to happen. I think our fans are sophisticated and understand that. And one day we’re going to get there.”