During an NHL game against the Calgary Flames in mid-December, Dallas Stars owner and governor Tom Gaglardi sits alone in the front row of the owner’s box. He clutches a beer with his left hand, and his right arm dangles over the side of the seat, fingers waggling in the air. He looks antsy. Members of the Stars front office, as well as some of Dallas’ top business executives, are scattered about the suite chatting. But Gaglardi is silent, eyes on the ice, watching the play. And the play is not going well.
His team looks sluggish and uninspired. The Flames score two goals late in the first period to take a 2-1 lead. Early in the second, the Stars push into the Calgary zone, but when the puck is knocked around the net to captain Jamie Benn, the superstar center misplays it right in front of the goal. Calgary steals possession, and the Flames take off on yet another offense break.
“Jamie!” Gaglardi shouts. “What are you doing?”
It’s rare for the Stars to be playing this badly. Since Gaglardi (pronounced guh-LAR-dee) purchased the team out of bankruptcy in 2011, he has turned it into the envy of the NHL. By the end of December, the Stars would boast the best record in the NHL and lead the league with 137 goals, 20 more than any other team. The team is young, fast, and exciting. There is a new energy around it. But on this particular night they are playing like the team Dallas had come to expect over the past decade—that is, poorly.
“When your best players don’t play, it’s hard to win,” Gaglardi says, sounding like a fan whose team is playing so well he expects them to win every game. “And that’s what you’re seeing so far; our best players aren’t playing.”
It’s clear that Gaglardi, 47, expects to win in Dallas. He has engineered a complete financial turnaround of the franchise. The team is selling more tickets than it has in years, has engaged the local business community like never before, and is winning plenty on the ice. But for the new owner, real success seems to revolve around one thing: winning it all, and bringing the Stanley Cup back to Dallas.
New Life Needed
It’s been a long time since the Stars were playing well enough for anyone to take much notice. The team’s history in Dallas after its arrival from Minnesota in 1993 follows the arc of a heroic rise and tragic fall. Led by Mike Modano and his All-American smile, the Stars of the 1990s put together a string of deep playoff runs and hoisted the Stanley Cup in 1999. In 2001, it moved into American Airlines Center and became the highest-grossing team in the NHL. But just a few years later, it all unraveled. Then-owner Tom Hicks ran into financial trouble. The team languished, attendance dropped, and the franchise leaked money. By 2010, the Stars were heading toward bankruptcy, and the league was in desperate need of a new owner who could breathe new life into the franchise that was once considered the darling of the NHL’s southern expansion.
[inline_image id=”1″ align=”” crop=”full”]A Canadian restaurant and hotel executive might not have seemed like the obvious choice to take over the team. But Gaglardi had been on the league’s radar ever since he attempted to purchase a majority stake in the Vancouver Canucks in 2004. Although his bid came up short, the experience whet the appetite of the lifelong hockey fan. In 2007, he purchased the Kamloops Blazers, a Canadian major junior league team, and flirted with buying the Atlanta Thrashers and moving them to Canada in 2010. When the Stars came up for sale in 2011, Gaglardi saw his opportunity. With a $240 million bid, Gaglardi beat out a local group vying for the team that consisted of oil and gas magnate Billy Quinn, Mike Modano, and Jim Lites, the former president of the Stars under Tom Hicks.
By the time Gaglardi took over the Dallas franchise, it was bleeding around $30 million a year. The season ticket base had eroded, and most of the front office talent jumped ship during the bankruptcy. The teams on the ice were never that bad—they tended to finish middle of the pack, sometimes flirting with the playoffs—but they were drawing like a last-place team. Dallas is a sports town that likes winners, and the team that was winning at the time was the Dallas Mavericks.
Gaglardi had some connection to Texas—his mother grew up in Longview—but he’s always lived and grown his family’s businesses in Canada. Now he found himself parachuting into a foreign city with the task of cleaning up after a train wreck. Everyone he spoke to about turning around the Stars seemed to know the one thing he should do: hire back Jim Lites, the team’s president during the heyday of the late-1990s, early-2000s. Hicks had fired him after Lites objected to the hiring of Brett Hull as general manager in 2007, a move that’s now seen as the moment when the team began to slip out of control. To Gaglardi, Lites represented the old regime, not the breath of fresh air the struggling organization so desperately needed.
“My attitude was, I need to find Jim Lites 20 years younger,” Gaglardi says.
“We were just making sure that everyone knew that we were going to be robust and dynamic, that we were going to rebuild.”Matt Bowman
Still, Lites’ name kept coming up. So Gaglardi finally relented.
“Apparently I need to meet you,” Gaglardi said to Lites when he reached out to him on the phone. The two set a lunch for opening day of the 2011 season. Lites was planning on attending the game that night to send off one of the last front-office executives who remained from his time as president. Lites met Gaglardi at the W Hotel, and the new owner immediately laid into him.
“Is this a job interview?” Gaglardi asked Lites aggressively, attempting to set the terms of the conversation from the get-go.
“Well, it could be,” Lites said.
“How old are you?”
Lites was taken aback.
“Fifty-eight, but that is an inappropriate question to ask in the United States,” Lites said. “In fact, it is illegal.”
“It is illegal in Canada, too,” Gaglardi cracked, and he continued to press Lites. “Why the f— would I hire a guy who was in the chair before twice and the franchise is this sorry a situation?”
“Don’t f—ing blame me for the state this is in,” Lites shot back. “I can’t make the owners do the right thing.”
After 15 minutes, Lites couldn’t wait to get out of there. But every time Lites made a motion to leave, Gaglardi pressed him further. An hour passed. Then another one, and another.
“When you get older in this business, and you get all this white hair, you expect a modicum of respect from people, and he didn’t give it to me,” Lites says of his first meeting with Gaglardi. “He pissed me off to start with, and so he was able to suck every bit of information out of me.”
Gaglardi asked Lites how he would run the team. Lites told him that anyone with talent had probably already jumped ship, so he’d better hire experienced people. He said he would need someone who knew how to sell tickets. He also said he had to make strong connections to the Dallas business community. Lites then tore into the person Gaglardi had been considering for president, another Canadian from Ottawa.
“You can’t bring a Canadian into Dallas, Texas, and have any credibility,” Lites told Gaglardi. “Are you kidding? Good luck with that.”
When Lites left the lunch he called his wife to tell her how it went.
“Well, let’s not quit our day jobs,” he joked.
Later that evening, the suite in the AAC was a reunion of people who had worked for the Stars in the good old days. The sale of the team really did feel like the end of an era. The Stars were winning the game, and spirits were high. Then Tony Tavares, the team’s NHL-installed interim president, came up to Lites.
“He loves you,” Tavares said. “You killed it. He wants to hire you.” Less than two months later, the team announced that Lites was once again president of the Dallas Stars.
Congeniality and Confidence
If Tom Gaglardi occasionally breaks balls, it’s because he prizes loyalty and honesty. That initial lunch set a tone not just between Lites and Gaglardi, but through the entire Stars organization. Around the front office, there is a palpable sense of congeniality and openness, as well as a confidence that belies an organization that feels tightly run but not tightly wound. Lites compares Gaglardi’s management style to Mike Illitch, owner of Detroit’s Red Wings NHL team and MLB’s Detroit Tigers, “in terms of his ability to know what people want and to be rock solid to his employees, loyal to the people working for him,” Lites says.
[inline_image id=”2″ align=”” crop=”full”]Gaglardi is a solid man, built like a bull. There was a time when Gaglardi might have thought he had a better chance at playing professional sports than owning a sports team. He was a good hockey player in his youth—skated well, had soft hands and a nose for the net. His teammates on his high school football team nicknamed him “Cowboy” because he was such a big Tom Landry and Dallas Cowboys fan. But Gaglardi’s girth didn’t set in until after adolescence. Tall and thin, he was an accomplished tennis player. But by high school, Gaglardi had already decided to follow his father into the family business.
The Gaglardi family’s Northland Properties Corp. is a Vancouver-based hotel and restaurant developer founded by Tom’s father in the 1960s. In the 1980s, it was already a player in the Canadian market, but was struggling through tough times and nearly went bankrupt. Tom Gaglardi started out on the ground floor, working weekends in high school as a greeter and a waiter in his father’s hotels. By college, he had worked his way up to managing construction sites. When he became president of the company in 1994 at the age of 26, Northland had once again found its financial footing and was on its way to becoming the largest family-owned hospitality company in Canada.
Turning around the Stars would take a similar amount of patience and determination. Gaglardi and Lites completed their senior management team by hiring a Canadian (and one of Gaglardi’s high-school classmates), Jason Farris, as COO and CFO, and another Stars veteran, Brad Alberts, as chief revenue officer. One of the first things the new regime did was renegotiate the leases for the money-leaking StarCenter ice rinks—public rinks offering the likes of youth hockey and figure skating. Then they negotatied a contract expansion with FOX Sports Southwest, and the terms of the NHL’s collective bargaining agreement. All together, they shaved $20 million off the club’s shortfall. The remaining $10 million would have to be made up with new revenue.
It had been 13 years since the Stars hoisted the Stanley Cup. Under GM Joe Nieuwendyk, Dallas managed to put some pieces together for a successful team. They had some prospects and boasted one of the best young Canadian hockey players in the game in Jamie Benn. But most of the future was still in the minor leagues.
“People lost faith in the organization,” says Matt Bowman, the Stars’ vice president of ticket sales, whom Alberts recruited from the start-up NBA franchise Oklahoma City Thunder. “The apathy was the hardest part to get over. We were just making sure that everyone knew that we were going to be robust and dynamic, that we were going to rebuild. That’s the story we’ve been telling.”
“I like being a fan. I just like coming and having a nice time. It is a good release for me. I don’t do this for a living.”
“I like being a fan. I just like coming and having a nice time. It is a good release for me. I don’t do this for a living.”
But the biggest shift in the Stars’ fortune came when they lured Jim Nill, considered one of the best general managers in the game, away from the Red Wings. Under Nill, the Stars retooled. They added young superstars—Tyler Seguin, Patrick Sharp—and stocked a farm system that was already an embarrassment of riches. Nill’s goal was to build a future team that could remain successful for a decade or more. But in 2015-2016, success arrived a little ahead of schedule.
Re-engaging fans was a major challenge, but so was getting the Dallas business community excited about being associated with hockey again. That challenge was further complicated by the fact that the team’s new owner lived in Vancouver. To bridge the gap, an ownership advisory group was launched. The group functions like a collection of minority owners, only none of its members have an equity stake in the team. Instead, they simply enjoy all the perks of being minority owners—access to the owners’ suite, the ability to travel on the team jet—in exchange for in-kind support, guidance, and advice.
“All we ask people to do is help us sell,” Lites says of the group that now includes the CEOs of 7-Eleven, Frito-Lay, and other major North Texas corporations. “Introduce us to your marketing departments, your advertising departments, or your lawyers. We don’t care what it is. Whether it is tickets or advertising or foundation support, we don’t care. And I’ll be damned, it has turned into millions of dollars of support.”
In the last couple of years, Gaglardi and his team’s work has started to pay off in spades. Full season equivalents—the number of seats guaranteed to be sold to a game before groups and individuals buy tickets—have more than doubled, from a dismal 5,000 in 2011 to 11,500 tickets per game, nearly 60 percent of capacity. Revenue from full season tickets has doubled, and revenue from corporate partnerships now ranks among the top 10 in the NHL. AT&T, Lexus, Frito-Lay, Pizza Hut, and 7-Eleven have all formed partnerships with the team. Last year, the Stars boasted the highest increase in attendance in the NHL.
The owner’s suite on the night against Calgary is a microcosm of the Dallas-Fort Worth business community. Nill, Lites, and other members of the front office are scattered around chatting with executives from Frito-Lay and 7-Eleven. Behind Gaglardi, a lawyer is entertaining a client who’s in town from Hong Kong. When Gaglardi comes to Dallas every three or four weeks, all he needs to do is sit in his suite and he can rub shoulders and share beers with some of the region’s most prominent business leaders. It’s an efficient way to address the challenges of having an owner who lives more than 2,000 miles away from the stadium, but it also seems to suit Gaglardi’s personality and management style—casual but engaged.
Sitting with Gaglardi during the game, there isn’t much of a trace of the hardballer Lites had lunch with back in 2011. He is affable and speaks matter-of-factly. “We like our team,” he says plainly when I ask about the Stars’ tremendous start to the season, “but we’re not overly surprised.” The Canadian’s modesty feels out of place in a sports town that boasts two of the biggest owner personalities in professional sports in Jerry Jones and Mark Cuban.
[inline_image id=”3″ align=”r” crop=”tall”]Gaglardi may not be as flashy as Cuban, or as meddling as Jones, but he does stay active in his team’s day-to-day operations. He’s on the phone with his management team daily and, when he comes to town, he calls his key managers together to scroll through the budget, line by line. He’s shown a willingness to go after big players, but he’s also open to spending money on little things—like a new kitchen in the practice locker room so players can enjoy made-to-order meals. He also pushes his staff on details, especially ticket pricing.
“He gets a ticket report every day,” Lites says. “I never sent Tom Hicks a ticket report, ever.”
When I ask Gaglardi about his involvement, though, he is dismissive.
“I like being a fan,” he says. “I just like coming and having a nice time. It is a good release for me. I don’t do this for a living.”
What Gaglardi does for a living is build hotels, and business is booming. In addition to buying the Stars in 2011, Gaglardi’s Northland Properties Corp. purchased Sutton Place Hotel Group, a luxury hotel chain. Northland currently has eight hotels under construction in England, Scotland, and Canada. Gaglardi is planning an expansion into Texas as well.
“We have tentacles here now,” he says.But it is clear that Gaglardi has plenty of room in his mind for hockey. He has been involved in the sport in some form or fashion his entire life. Up until three years ago, he continued to play on an adult hockey team. As I ask him about his hotel business, he interrupts me to break down a play unfolding on the ice.
“Did you see that?” he asks me as the Stars charge through the neutral zone. “We’re a north-south team—we catch a lot of teams in the change.”
During a pause in the game, the music in the AAC amps up and the video boards explode. The Dallas Stars Ice Girls skate out onto the rink with shovels, while the ever-smiling Stars’ dancers—just a few feet from the owner’s box—burst into choreographed kicking and spinning.
“In Canada, you don’t have to do all these things,” Gaglardi deadpans. It is something of a stereotype to say that Canadians take their hockey very seriously, but Gaglardi certainly does. Regardless of the stadium hoopla, he seems to understand that in Canada and Texas, what it really takes to engage fans is quality hockey on the ice.
“They have to be convinced that you are trying to win,” he says. “Because it is not just their money that they are coming to invest, it’s their time, their heart, their mind. They’re fans. It is an emotional relationship, and you have to hold up your end of the bargain.”
Everything about the Dallas Stars in 2016 indicates that Gaglardi is holding up his end of that bargain. As of this writing, the team had the third-most points in the NHL. The franchise that hasn’t won a playoff series since 2008 was cruising toward the postseason with expectations of going deep. There is an air of confidence around the club that hasn’t been felt in this city for a long time—a sense of expectation. I can’t count the number of times I’ve heard people throughout the organization utter those two sacred hockey words: “Stanley Cup.”
Gaglardi isn’t shy about his expectations. He believes the Stars are in a spot to bring Lord Stanley’s cup back to Dallas at some point in the next three years. That’s his goal, and he’s confident that if they can stay focused on that, the rest of the business will follow. “It is not about making money for us,” Gaglardi says. “We want to win. And if we do the right things on the ice, then off the ice will take care of itself.”