Al Howell's Record May Be Biggest Obstacle to WHA Hockey - MLN Sports Zone

Al Howell's Record May Be Biggest Obstacle to WHA
The wannabe sports mogul, whose World Hockey Association (WHA) touts a two major-league hockey world may find his greatest obstacle to success is his own past.

Brian Ross

A modest amount of cash and a lot of hard work can take you a long way in the minor leagues. In the majors, cash and the credibility needed to get it are the cornerstones of success. The WHA and its minor league, the WHA-2 will need millions of dollars in league fees, sponsorships, and television revenue to put themselves in a survivable position with the NHL (See "Hockey's Big Gamble").

Yet the track record of one of the founders of the World Hockey Association may jeopardize the league's ability to gain the financial credibility to get off the ground.

Don't Leave Home Without Them.

Al Howell resigned as the Chief Executive Officer of the Canadian Football League's Ottawa Roughriders in 1995 in the wake of a scandal caused by a charge filed in Ontario Court, general division, by the provincial Crown Attorney's office in Ottawa. The indictment alleged Howell's involvement with 58 counts of forged checks in a travel business.

The charges were later withdrawn by Crown attorney Enno Meijers, who cited a lack of proof of criminal intent. Innocence in a legal sense is one thing. The practical damage of such charges to any person who runs a public entertainment business was significant, particularly in a sports business where some notion of above-board conduct around games is a keystone of the business

Rough Ride for the Riders

In 1994, Howell had convinced Chicago multi-millionaire Horn Chen to take ownership of the Roughriders. After another money losing season and the Howell scandal, Chen pulled the plug on the team's finances during the 1995 season.

Reports at the time indicate that Howell predicted the demise of the area surrounding the stadium if the Riders closed shop. In fact, very little happened.

Driving Hard on Sports' Memory Lane

Howell's next foray into the world of sports involved a business called Major Four Sports Brokers, Inc. Its mission: To boldly broker deals between teams and prospective ownership.

In 2001, Howell worked to broker new cities and foundering teams for the struggling American Basketball Association 2000 (ABA 2000).

Despite some very good talent who took the court, the ABA 2000 was an ill-conceived, overly optimistic, and seriously under-capitalized mess in its first year of operation. In its inaugural year, teams were rushed into operation. Several teams were in markets with NBA teams as a low-cost "alternative" league. Marketing ranged from good to non-existent.

In towns where the NBA played, the league drew sparse attendance numbers, often less than 2000 per game. Attendance numbers in arenas like the Fabulous Forum in Los Angeles were only around 3000 per game. As low as they were, the numbers were often inflated with a healthy number of comp tickets. In non-NBA towns, attendance was marginally better.

The league scrambled to reorganize for its second season in 2001, which began later in the year to deal with the large numbers of openings and closings of sketchily-funded franchises.

Howell stepped into the fray, trying to roll out franchise deals.

For those unfamiliar with the sports business, most survivable major league franchises spend at least a year, more often three or more, in the planning and funding stages. Howell was calling on potential ownership, trying to get them to start a business right as the season began.

Lonie Glieberman, another former Rough Rider president, then based in Detroit, had been contacted by Howell about opening up an ABA-2000 franchise in Anaheim, California just two weeks before the season opener. Glieberman passed.

The Memphis Houn'Dawgs, which had been rolling around the rim of the attendance abyss, were dealt a death blow earlier in the summer when the National Basketball Association (NBA) announced that it would be opening up shop in the shadow of Graceland.

Howell tried to negotiate a deal with 'Dawgs owner Clyde Perlee to bring the team up to Ottawa.

Sources in the ABA at the time told MLN that the league had logistics problems with that city, as they were trying to cut down on travel costs to make it through the second season.

One also cited the double-tax US/Canada whammy for U.S. players in Canada on low salaries as a potential limitation. Perlee couldn't make the numbers work out in time. Ottawa did not receive the franchise, which closed up shop within weeks.

Howell did not bring the league to Canada. Within months, the ABA-2000 began a slow collapse. Its demise came quietly, as the offices of the principals who touted great success as the"alternative league" closed their doors and turned off the telephones.

Moving on to the Long Bomb

Examining the hot market for indoor football in the U.S., with rapidly expanding leagues like the AF2 and the NIFL rolling out franchises, Howell decided to set up his own Canuck export, the Canadian Indoor Football League, of which he became the league president.

Howell bragged to the media that the CIFL would be operating coast-to-coast in Canada by the Spring of 2002. $50,000 franchise fee, half a million Canadian bucks in net worth per year and a dream could get you into the fabulous world of indoor football.

Howell pitched how expensive the AFL/AF2 franchise fees could be. He offered the promise of affordable team ownership in ten franchises in cities major and minor across Canada. He talked up a potential national TV deal. He talked up low salaries: Players would be from ranks below the Canadian Football League (CFL) (Read: SEMI-PRO) and would earn $200 a game on a sixteen-game season. That's non even particularly good semi-pro money, particularly in Canadian Dollars.

So far, the dream of coast-to-coast indoor football in Canada remains just that.

Howell on Ice

Today, Howell presses forward with the WHA. Some of the same red flags are emerging that should give potential owners, fans, and the media, pause:

The Big Gamble - Rolling the dice on starting a league whose "alternative" talent has to come from a lock-out by your competitor is a very high-stakes gamble.

Bad Player Math - The league is being sold on math that doesn't add up in a free market economy, where the players largely dictate the standards of salary. The WHA proposes salary caps of $3million for the marquee player and $10 million for the rest of the team. Even if the players in the NHL face a protracted lock-out, their agents surely will be telling them that, no matter what the final version of the collective bargaining agreement looks like, most of them will be making more in the NHL, even if they wait out a strike, than they would in the WHA. The WHA will appeal to AAA level players in the AHL that aren't going anywhere in their developmental system who want a shot at more money, and at saying that they played in a major league. Hardly equivalent product to what the NHL is putting on the ice.

Capital Requirements for Ownership Too Low - Ownership has to have $50million in net worth. Yet, with player salaries of $13,000,000 in the major league, a potential requirement to carry possible another $300,000 to $500,000 in WHA-2 salaries,a front office, arena fees, arena staff, insurance, advertising, and travel, the additional costs may be an estimated $2,000,000 and $5,000,00 per team. If there is a total loss, the ownership groups net worth is still $25 million to $40 million short of being able to sustain five years in a worst-case scenario. For those who don't believe in worst-cases, they usually happen in fledgling sports leagues.

The Rush to the Ice -Howell's pronouncement to the media has been that they will be operating a league in 2004-2005. Baseball's Diamondbacks were years in the planning and development. So were football's Houston Texans. To try and skate under the NHL's lockout, Howell's group is trying to run at break-neck speed to get a league operating by 2004-2005. If history is a teacher, then the failures of leagues like the IBL, ABA-2000, and even the former WHA should tell you something.

Failure to Communicate - Howell, Young and Vaccaro, to a lesser extent, speak for the WHA. They needed a great PR person from the get-go to channel information properly.

They send out press releases about opening a WHA franchise in Birmingham, which didn't sustain more than 8,000 fans on its best day in the old WHA.

All of them are full of ideas, many of which they drop on reporters like trial balloons. Not all of those ideas line up. Howell and Young have different facts and figures for the league's start up, for example. Young proposes that WHA franchises own minor league clubs. Howell talks more of owning one franchise and perhaps carrying some player salaries in future years.

Just the oddity of setting up offices in Niagara Falls, New York was a bad PR move. The town is known for the falls, Three Stooges humor ("Niagara Falls! SLOW-LY I turned, step-by-step..."), cheesy honeymoon suites, and gambling over the border.

Track Record - If you are trying to raise $150 to $180 million dollars (Howell tells the media $100 to $110 million) to run a league. you better be a huge success at operating a sports business at some level. Your financial record, whether in real or perceived problems, better shine brighter than the brass in a Donald Trump property. Howell's history running sports franchises does not seem to make him a prime candidate for being the point person for such a large enterprise.

Mr. Howell has lead a colorful and interesting life around the periphery of the sports world. His style of deal-making and his personal history in both business and sports should make for significant bumps in the road to achieving the dream of running a successful major hockey league.

Thanks to Tim Baines and the Ottawa Sun for their assistance with this article.

Whether it's the ABA2000, the CIFL, or the WHA, the sport may be different but the tune remains the same:

"Affordable Ownership" - Money guys who have tall hats and very few cattle, but fancy themselves to be the next Jerry Jones, can get in to the deal with a fraction of the money needed to run a club in that expensive other league. There is a reason that leagues with legs get higher franchise fees: It separates out the owners with deep enough pockets to run a club from the wannabees.

"Alternative League" - The current pitch for the WHA is the same pitch that failed with the ABA-2000. The other pitch that goes hand-in-hand with this is "Low-cost, fan-friendly entertainment." There are people who can't watch the Lakers or the Rangers because they can't afford the seats. They already have an alternative which meets their needs: TELEVISION.

If Howell and others who handy this phrase about would just call it an independent minor league, expectations would run about right. If you're going to be an "alternative" league, you have to put the same or better quality product out on the court, ice or field.

In the formulas espoused by the ABA-2000, or in the CIFL or WHA pitches, you are working in a free marketplace. The likelihood of drawing players at 1/3rd of major league salaries and putting an "alternative" product out is almost not possible.

The Big TV Deal - Television is the promised land of sports revenue. The tall hats with few cattle love hearing about it, because it means they won't be cleaned out by team ownership if they buy in to a league.

Sports on sports channels sell. Increasingly entertainment channels, who don't like the disruption in their programming schedules, want less and less to do with well established sports. New leagues have ESPN2 and maybe TNT or BET.

Assuming that a few games can be aired, the money won't be much. It will evaporate if the television company airs rows of empty seats. In some of the NBA's NBDL games, they were re-seating people on the side of the arena where the television cameras point to try to make it look less empty.

Target Cities - In the CIFL and WHA deals, Howell pitches to the public and investors the potential target markets for teams to stir up the pot. He provides the big vision of a football league stretching across Canada, or a hockey league that will operate in ten to twelve great markets that the NHL doesn't play in.

A lot of the markets projected have had checkered histories of professional sports.

In interviews, Howell will counter with the standard reply that these are markets that were poorly handled by the previous sport, league, team or owner.

Within the realm of possibility: Yes. Probability: Unlikely. Usually markets that have bad attendance suffer from:

Being burned too often by third-rate franchises operating a year or two here or there (Time, in years, heals those wounds)
Lack of promotion (which the budgets of teams in a WHA or CIFL could not do much to improve upon), or too little community outreach.
Failure to be out in the community. Grass roots barnstorming is cheap, and might yield enough fans for a small minor league club, but hardly enough for a major league hockey franchise.