According to the Athletic (subscription only), the Dallas Stars furloughed staff this week for a second time this year as the organization and owner Tom Gaglardi face mounting financial difficulties. That’s an unusual problem for a team that just made a fairy tale run through the 2020 NHL playoffs, reaching their first Stanley Cup Final since 2000. But then 2020 is an unusual year.
The deep playoff run should have meant record crowds and plenty of sold out home games, not to mention a boost in merchandise sales and other revenue. Instead, the NHL played all of its games in front of empty stadiums in two “bubble” arenas in Edmonton and Toronto. The NHL relies more heavily on revenue from ticket sales than other major sports, which means all of the league’s teams are hurting after a year that the season canceled after the outbreak of COVID-19. The financial difficulties for the Dallas Stars, however, are amplified by the fact that Gaglardi’s other businesses–Gaglardi made his fortune in hotels and restaurants–have proved particularly vulnerable in the COVID-19 economy. Gaglardi also purchased land near the American Airlines Center right before COVID-19 reached Dallas, hoping to develop the property for entertainment and hospitality amenities.
And the problems don’t stop there.
According to Stars president Brad Alberts, when Tyler Seguin and Jason Dickinson took a knee during the national anthem before a game against the Vegas Golden Knights, a number of Stars season ticket holders canceled their subscriptions and a sponsor threatened to pull its backing. Other team sponsors were supportive of the two players, as well as the Stars’ show of support for NHL-led diversity and equity initiatives. According to the Athletic’s sources, some season ticket holders reached out to the Stars organization and urged them to be more clearly outspoken about issues of race and equity, saying that the Stars “’can’t just be right down the middle and need to take real action,’ when it comes to diversity initiatives.”
The contention among fans over how the Stars have handled the recent infusion of political activism in professional sports underscores the tricky position many franchises now find themselves in, and it couldn’t come at a worse time for the organization. Alberts said that the financial uncertainty around the team that led to this week’s furloughs is deepened by the lack of a clear start date for next season or the ability to anticipate when fans will be allowed back in the arena. Even though the Stars hosted watch parties for the playoff run at the American Airlines Center, the team didn’t make any money off the events.
In addition to decisions around staffing, the financial strain is influencing choices on the ice. “The Stars have made decisions they wouldn’t in typical years when it comes to signing fringe prospects or AHL-level players, while the organization parted with long-time employee Les Jackson when his contract ended,” the Athletic reports.
It is not just the team’s success this year that makes the financial struggles difficult to swallow. Before COVID-19 blew up 2020, the franchise had reached a peak:
According to sources, it’s even more frustrating for Gaglardi given how 2020 started. The Stars opened the 2020 calendar year playing in the Winter Classic in front of 85,630 people against the Nashville Predators. It was a high point for the franchise when it came to both publicity and finances.
The Stars sold out of Winter Classic jerseys quickly and had to find ways to quickly re-stock to meet demand. On top of that, according to a source, interest in season tickets increased after the Jan. 1 game.