Wayne Gretzky means lines. Lines of hockey fans waiting to buy tickets at The Forum. Lines at the concession stands waiting to purchase refreshments. Lines at the souvenir stands. Lines of reporters waiting to hear what the Great One has to say. But as far as Los Angeles Kings owner Bruce McNall is concerned, the most significant line is the one at the bottom of the ledger sheet. Here, again, the 28-year-old Gretzky has had an enormous impact.
"In terms of paying $15 million for him and adding the salary of $2 million a year, I figured we'd need $5 million more per year for five years," says McNall. "My goal was to break even at the end of five years. Now it looks as if we'll break even a lot sooner."
It has been a year since the Edmonton Oilers sent Gretzky, Mike Krushelnyski and Marty McSorley to Los Angeles in exchange for $15 million, Jimmy Carson, Martin Gelinas and three first-round draft picks. Besides ending the Oilers' on-ice dynasty, the trade drastically shifted the balance of power throughout the Smythe Division. It also turned the lackluster Kings, who are located in the second-largest media center in North America, into one of the NHL's showcase franchises.
After losing an average of $4 million annually for several years, the Kings are projecting 1989-90 as the first profitable season in their 22-year history. Advance ticket sales for the coming season are more than $4 million over total ticket sales for last season. And the 1988-89 season, in which Gretzky had worn his number 99 for the first time as a Los Angeles King, was the team's best at the bank: gross revenue was up by more than $9 million over 1987-88. Some of the items that contributed to that $9 million: a $1 million increase in advertising revenues; an additional $1 million in TV rights fees; $800,000 in concession and rent kickbacks (based on a percentage of the increased profits on concessions, merchandising, parking and ticket sales); a $2 million increase in licensing fees and sales of Kings merchandise; a 27.4% increase in attendance—the team had 24 sellouts in 40 regular-season home games in the 16,005-seat Forum, three times its previous single-season high—which brought in $4.2 million.
October 8, 1989
It's impossible to put a specific dollar figure on the current market value of the Kings. However, the 39-year-old McNall, who in March 1988 bought the 51% of the team that he didn't already own from Jerry Buss for $20 million, says, "This franchise is in line with other major [sports] franchises around the country. Most of the top basketball and hockey teams are I worth I around $70 million to $100 million, and with the Kings being in Los Angeles, it brings [this franchise] to the higher end."
The ramifications of the trade are by no means confined to Los Angeles. The Kings used to be a lousy draw on the road. Enter Gretzky and—ka-ching!—cash registers began to ring up an additional $3.46 million in black ink for the 20 other NHL teams. The Vancouver Canucks lost out in the Gretzky sweepstakes—they tried desperately to make a trade with Edmonton for the NHL's nine-time Most Valuable Player—but they are among the biggest winners in the monetary windfall that the trade caused. The Canucks' attendance for four home games against the Kings in 16,553-seat Pacific Coliseum last season was up an astounding 92% over the previous season. That meant more than $750,000 in added revenue. In Winnipeg attendance was up 33%, which brought in $400,000 in increased revenue. The Kings were a godsend even for teams not in the Smythe Division. Minnesota, the poorest drawing team in the NHL in 1988-89, saw attendance in games against L.A. rise by 32%. The Kings played to 30 road sellouts last season, versus none in 1987-88.
The trade also opened a market that had been virtually closed to hockey. NHL licensing and merchandising, which the league had all but ignored until a couple of years ago, pulled in an estimated $150 million at retail outlets last season, 50% above the NHL's projections. Says Fred Scalera, the league's general manager for retail licensing, "One licensee has said that he did more business in L.A. last season than he had done in the franchise's previous 22 years combined."
Last season the Kings hired Harvey Boles to become the team's first-ever director of merchandising. Among other moves, Boles opened a store three miles from The Forum called Slap Shop, which sells Kings jerseys, T-shirts and the like. The store began with a modest 200 square feet, but by season's end it had grown to 450 square feet.
"The Kings were up against some strong competition," says Scalera. "They had a World Series champion [Dodgers] and an NBA champion [Lakers] in that marketplace. Before last season we didn't have much placement in the retail establishments in Los Angeles. With Gretzky, there's a whole new attitude. He's opened up one of the major U.S. markets."
Over the long term, Gretzky's greatest contribution to hockey might be the new status he has given the game. It's not just a matter of movie stars from Malibu suddenly showing up in The Forum, but the Gretzky effect has made believers of some of the NHL old guard. Based on the failures of professional hockey franchises in several U.S. cities—Atlanta, Oakland, Cleveland, Kansas City and Denver—owners such as Bill Wirtz (Chicago Blackhawks), Jeremy Jacobs (Boston Bruins) and Harold Ballard (Toronto Maple Leafs) were leery of expansion. Instead of aggressively moving into West Coast markets, and thus giving hockey a shot at network television revenues in the U.S., they and other like-minded NHL owners prevailed upon the league to stand pat. Such thinking left Los Angeles virtually isolated—1,300 miles from Vancouver, its nearest Smythe Division rival, and some 1,800 miles from its nearest U.S. rivals, the Minnesota North Stars and the St. Louis Blues.
Gretzky's impact in Los Angeles has changed that attitude. For the first time since it absorbed the World Hockey Association in 1979, the NHL is seriously looking to expand. Within the next three months, the NHL will probably announce plans to add three teams, one of which may be situated in the western U.S. Possible sites include San Diego, San Jose, San Francisco, Anaheim and Seattle.
Says McNall, "No question about it, we should try to expand in the next couple of years, while Gretzky is still playing. We have the equivalent of Babe Ruth on the ice for us right now, so...."
McNall wants the NHL to strike quickly for its own good, but he also realizes that the addition of West Coast teams would make the Kings more profitable. More West Coast teams would cut the Kings' travel expenses, plus lead to stimulating local rivalries. It's a matter of success breeding success.
All it took for Los Angeles to turn the corner, and drag a reluctant NHL along with it, was a $15 million investment in a player named Gretzky. With the addition of Gretzky, the Kings have become a winning franchise, on the ice and on the bottom line.
Paul Fichtenbaum is a former staff writer for "Sports, Inc." magazine.