A few days ago on June 16, the owners of the Buffalo Sabres, Terry and Kim Pegula, dropped what would become a bomb on the hockey world beginning with the announcement that general manager Jason Botterill had been fired and an in-house replacement, Senior Vice President of Business Administration, Kevyn Adams would take over the position. We wouldn't know just how big of a bomb they had just dropped on the entire hockey operations department until we witnessed the huge mushroom cloud above Washington St. later that evening.
After a 2 pm Zoom conference call going over the morning events, the Sabres announced that Botterill's right hand men, AGM's Steve Greeley and Randy Sexton, the latter being the general manager of the Rochester Americans also got the boot. Sexton's staff in Rochester were also let go as head coach Chris Taylor plus his assistants Gord Dineen and Toby Peterson were shown the door as well as 14 of the team's 21 scouts, whom we'll name here:
Ryan Jankowski, Director of Amateur Scouting
Jeff Crisp, Assistant Director of Amateur Scouting
Amateur scouts Cory Banika, Steve Cocker, Mark Ferner, Marcus Fingal, Scott Halpenny, Randy Hansch, Tom O'Connor, Ron Pyette, Matt Tiesling and Magnus Weing
Pro Scout John Van Boxmeer
Player Development Coaches Krys Barch and Mike Komisarek
Dennis Miller, Rehab and Development (Performance Dept.)
BOOOOOM!
Frank Servalli, Senior Hockey Reporter for TSN tweeted of the purge, "It's a bloodletting that may be unprecedented in #NHL history - certainly in one day by one franchise."
Sure enough. It's now Friday, the dust has settled and the crater caused by this leaves Adams as a mere speck in the chasm created.
An about-face on Botterill and new economics impacting their decisions
Terry Pegula's wife Kim, who's the president and CEO of the umbrella organization Pegula Sports and Entertainment, as well as president of both the Sabres and the NFL's Buffalo Bills, had given Botterill a vote of confidence just a few weeks prior to firing him on Tuesday. “He’s our GM", she told John Wawrow of the Associated Press in a piece published on March 26. "Our plan is to continue with him."
What happened in those few weeks between that vote of confidence and Botterill's firing? In the interim, for one thing, on the same day that Wawrow piece was published, the NHL decided upon a format that would eliminate the Sabres from a 2020 playoff play-in thereby extending the Sabres playoff drought to a league-long nine years, just one shy of the NHL record. In addition to that the coronavirus was still having a global impact that wreaked havoc on the United States and the sporting world in America.
The NHL is doing it's best to salvage the season and eek out what they can from television contracts but the coronavirus will cause them to play games without fans in the seats. Although that doesn't have a direct impact on the Sabres organization this year because they're not in on the action, there are still huge question marks as to whether fans will be allowed to attend games next season which has a direct impact on every NHL team, especially a small market team like Buffalo. In addition to that, the American Hockey League cancelled the 2019-20 season and as of now it doesn't look as if there will be a 2020-21 season either.
Sure enough. It's now Friday, the dust has settled and the crater caused by this leaves Adams as a mere speck in the chasm created.
An about-face on Botterill and new economics impacting their decisions
Terry Pegula's wife Kim, who's the president and CEO of the umbrella organization Pegula Sports and Entertainment, as well as president of both the Sabres and the NFL's Buffalo Bills, had given Botterill a vote of confidence just a few weeks prior to firing him on Tuesday. “He’s our GM", she told John Wawrow of the Associated Press in a piece published on March 26. "Our plan is to continue with him."
What happened in those few weeks between that vote of confidence and Botterill's firing? In the interim, for one thing, on the same day that Wawrow piece was published, the NHL decided upon a format that would eliminate the Sabres from a 2020 playoff play-in thereby extending the Sabres playoff drought to a league-long nine years, just one shy of the NHL record. In addition to that the coronavirus was still having a global impact that wreaked havoc on the United States and the sporting world in America.
The NHL is doing it's best to salvage the season and eek out what they can from television contracts but the coronavirus will cause them to play games without fans in the seats. Although that doesn't have a direct impact on the Sabres organization this year because they're not in on the action, there are still huge question marks as to whether fans will be allowed to attend games next season which has a direct impact on every NHL team, especially a small market team like Buffalo. In addition to that, the American Hockey League cancelled the 2019-20 season and as of now it doesn't look as if there will be a 2020-21 season either.
All of that has a direct, immediate impact on sports financials for the Pegulas and "economics" was a focus of Terry and Kim during their Zoom call this week. They talked about becoming "much leaner" and being "much more efficient" which, as everyone knows when it comes to owner-speak means cost-cutting measures (although no one could have predicted the "Neutron Jack" Welch approach Sabres ownership took.)
Botterill was the first shoe to drop and no firm reasoning behind his firing was given by Terry or Kim as they used general, blanket statements like this from their press release, "We recognized we have philosophical differences regarding how best to put ourselves in a position to compete for a Stanley Cup." During the Zoom call Terry said, "I'm not going to sit here and dish on Jason Botterill," adding, "but we have a vision and we want to see our vision succeed. We were in detailed discussions with Jason, and how we felt we needed to move forward effectively, efficiently and economically running this franchise, we felt there were too many differences of opinion going into the future."
One might conclude, since guessing the reasons why is about all we've got, that Botterill wasn't ready to go all-in on the financial side with "neutron bomb" approach. Obviously, that stance it didn't sit well with the Pegulas, who were feeling the harsh economic effects the coronavirus on many levels of PSE and presumably into their core gas business. Terry made his money in the oil/gas industry and in April the industry was getting crushed by low demand because of the coronavirus plus an additional stomp from OPEC which had that group of countries increase oil production at the time when the world was already oversaturated. On April 20, the May futures for crude oil went negative for the first time ever meaning some were paying others to take their oil contracts. From MarketWatch, "West Texas Intermediate crude for May delivery finished down $55.90, or 306%, at negative $37.63 a barrel."
On that same day, Tim Graham of The Athletic wrote a scathing article titled, As Pegulas face business challenges, employees describe a ‘toxic culture’ at PSE. "Last January, within a couple of weeks of the Buffalo Bills reaching the playoffs for the second time in three seasons," wrote Graham, "owner and president Kim Pegula spoke to her employees about tightening their belts.
"Times ahead were going to be difficult, Pegula stressed, and sacrifices must be made."
Although the Bills had made the playoffs and they played in the NFL, a league that's basically an ATM machine for owners as lucrative television deals ensure a profit, the rest of PSE holdings weren't doing so well, including Pegula's natural gas wells which "were capped last summer" with "prices plummeting further," according to Graham. Within that piece Graham, who covers the Bills for The Athletic, stated "A source with knowledge of the numbers said the Sabres have been losing between $40 million and $60 million the past few seasons," something that was backed Servalli.
"Financial information is not available on the privately-held company," wrote Servalli for TSN, "but sources indicated that the Sabres have lost money virtually every year of Pegulas’ ownership, including significant losses of upwards of $30 million per season in some cases. Forbes Magazine reported in December that the Sabres earned $1 million during the 2018-19 season before interest, taxes, depreciation, and amortization," he continued, "while holding one of the league’s higher debt-to-value ratios at 20 per cent."
Botterill was the first shoe to drop and no firm reasoning behind his firing was given by Terry or Kim as they used general, blanket statements like this from their press release, "We recognized we have philosophical differences regarding how best to put ourselves in a position to compete for a Stanley Cup." During the Zoom call Terry said, "I'm not going to sit here and dish on Jason Botterill," adding, "but we have a vision and we want to see our vision succeed. We were in detailed discussions with Jason, and how we felt we needed to move forward effectively, efficiently and economically running this franchise, we felt there were too many differences of opinion going into the future."
One might conclude, since guessing the reasons why is about all we've got, that Botterill wasn't ready to go all-in on the financial side with "neutron bomb" approach. Obviously, that stance it didn't sit well with the Pegulas, who were feeling the harsh economic effects the coronavirus on many levels of PSE and presumably into their core gas business. Terry made his money in the oil/gas industry and in April the industry was getting crushed by low demand because of the coronavirus plus an additional stomp from OPEC which had that group of countries increase oil production at the time when the world was already oversaturated. On April 20, the May futures for crude oil went negative for the first time ever meaning some were paying others to take their oil contracts. From MarketWatch, "West Texas Intermediate crude for May delivery finished down $55.90, or 306%, at negative $37.63 a barrel."
On that same day, Tim Graham of The Athletic wrote a scathing article titled, As Pegulas face business challenges, employees describe a ‘toxic culture’ at PSE. "Last January, within a couple of weeks of the Buffalo Bills reaching the playoffs for the second time in three seasons," wrote Graham, "owner and president Kim Pegula spoke to her employees about tightening their belts.
"Times ahead were going to be difficult, Pegula stressed, and sacrifices must be made."
Although the Bills had made the playoffs and they played in the NFL, a league that's basically an ATM machine for owners as lucrative television deals ensure a profit, the rest of PSE holdings weren't doing so well, including Pegula's natural gas wells which "were capped last summer" with "prices plummeting further," according to Graham. Within that piece Graham, who covers the Bills for The Athletic, stated "A source with knowledge of the numbers said the Sabres have been losing between $40 million and $60 million the past few seasons," something that was backed Servalli.
"Financial information is not available on the privately-held company," wrote Servalli for TSN, "but sources indicated that the Sabres have lost money virtually every year of Pegulas’ ownership, including significant losses of upwards of $30 million per season in some cases. Forbes Magazine reported in December that the Sabres earned $1 million during the 2018-19 season before interest, taxes, depreciation, and amortization," he continued, "while holding one of the league’s higher debt-to-value ratios at 20 per cent."
Those are not good numbers, even for a billionaire who once flaunted how deep his pockets were by stating brashly at his initial ownership presser that if he wanted to make more money he'd "drill another well." Even now a defiant Terry Pegula said, "There is no financial situation.
"I don't know where that rumor started," he continued. "If you look at every oil and gas company, which is our core business outside sports, they're all—you might use the word—hurting. But we don't have any debt on our oil and gas business."
Yet you can't get away from the numbers and if they're accurate, or even close to accurate with the Sabres losing so much money, tearing down the hockey operations department based upon few successes and many failures might be expected, although it's never been done to this extent, according to Servalli.
From mediocrity to hope to worse than mediocrity and continuous turnover
The Sabres had been perceived as the grubby little street urchin of the league for a number of years prior to Pegula but when he bought the team in February, 2011 congratulations for long-suffering Buffalo fans came from around the league. Pegula and his wealth brought stability and financial freedom to a franchise with a modest history of success stories that came up just shy of winning the Stanley Cup. Buffalo is a hockey hot-bed that is consistently at or near the top of NHL television ratings and was perceived as the "little market that could," but just needed an owner that would allow them to play with the big boys.
Pegula was that man and it started out well as they made a late-season surge to make the playoffs in 2011 only to lose in seven games to the Philadelphia Flyers. Sabres GM Darcy Regier was kept on board, as was head coach Lindy Ruff, and the organization felt it needed a couple of pieces to get them to the next level. In the off season Pegula backed the high-priced signings of defenseman Christian Ehrhoff (whom some said Pegula insisted upon) and winger Ville Leino, two contracts that eventually would be regretted as both were bought out in 2014 as the league allowed for two compliance buyouts.
The optimism that fueled the 2011-12 season was soon steamrolled as Milan Lucic exposed the softness of the team Regier built in November and a month later Buffalo would lay an egg in Pittsburgh, Pegula's shining hockey city on the hill that he wanted his franchise to be like. "We saw some great goaltending tonight, didn't we?" said Terry in a derisive swipe at Ryan Miller and Jonas Enroth, as well as the team in general, after his Sabres lost to the Penguins 8-3.
Soon thereafter the lineup was slowly purged and the team went into tank-mode for a Pittsburgh Penguins-type, lose-now-to-win-later rebuild which secured two No. 2 overall picks--Sam Reinhart (2014) and Jack Eichel (2015.) This approach was met with league-wide derision and disdain and despite it being five years since their scorched-earth tank/rebuild, Pegula's Sabres still haven't been able to climb up from the lower rungs of the league.
Since the 2011-12 season, Pegula's first full season as owner, his Buffalo Sabres have compiled a 260-343-88 record and a .440 points percentage, good for a last place in the league. Since landing Eichel at the 2015 NHL Draft the Sabres have compiled a 156-188-53 record, or a .460 point-percentage, good once again for last in the league. And, although we don't have the empirical data to show what has transpired in other organizations, it's safe to say that the Buffalo Sabres under Pegula have gone through more organizational turnover than any other team in the NHL, or are at least near the top in that category.
Other than losing, the only other constant for the Sabres is turnover. Pegula's inner circle of Senior Advisors Ken Sawyer and Cliff Benson, are long gone as is Ted Black, the man who orchestrated the Sabres tank. Black and Russ Brandon preceded Kim Pegula as Sabres team presidents while the Pegula's have purged a number of other key executives including NHL/Sabres legend Pat LaFontaine, who was hired as president of hockey operations but left a few months later after a supposed dispute with ownership.
In addition to that group of higher-ups, the Sabres under Pegula the last nine years are on their fourth general manager, sixth head coach and have revamped their scouting department in a big way twice, the first time expanding it greatly, then cutting 2/3 of the staff in this latest purge.
A lot has been made concerning the release of Taylor and his coaching staff, but the Amerks were swept out both times they made the playoffs under him, despite much emphasis and dollars directed towards their success. And despite a large scouting staff on both the amateur and professional side of the equation, the results from both just haven't been there organizationally. This mainly centers around drafted players outside of Reinhart, Eichel and first-overall pick, defenseman Rasmus Dahlin, failing to make significant contributions up to this point as well as a long list of trades for pro players over the years that have either not brought back a significant return on equity or trades that have been an outright bust.
Attendance means dollars, poor attendance means...
Over the past few years the lifeblood of the Sabres, ticket sales, were diminishing. For the 2011-12 season, attendance at games ran at 99.9% or a 18,680 average attendance. Renovations led to 380 additional seats being added for the following season bringing their total capacity to 19,070, a number that coincides with the franchise being founded in 1970. The 2012-13 season was shortened by the owner's lockout and for 24 home games the Sabres were at 95.7% capacity with average attendance at 18,970.
Even during the tank years First Niagara Center's average attendance was 18,579 (97.4%) for 2013-14 and 18,580 (97.4%) for 2014-15, the year that saw management move on from any and every player with any semblance of NHL talent in order to finish last. Of note, that July over 15,000 fans headed to First Niagara Center to watch Eichel don the Blue and Gold for the first time in an intrasquad scrimmage at development camp.
Optimism was high that season and they averaged over 18,500 fans again. But the team stumbled the following season, head coach Dan Bylsma's second and final season before he and Murray were fired, and average attendance fell to 18,141. The enthusiasm of a Botterill/Phil Housley GM/Coaching duo led attendance to surge to over 18,500 again but a last place finish and a team that fell apart the following season saw attendance dip to under 18,000 and eventually Housley was fired. This past season saw attendance fall to just over 17,000 (barely above 90%) and over the past three seasons announced attendance was far above actual bodies in the seats as shown by a bottoming of the secondary market which saw tickets routinely going in the single digits.
When you add it all up, it's no wonder the Pegula's wanted to blow it up for a fresh start. And when you look at the time new general manger Kevyn Adams has to work with, as the possible start to next season could be as late as January 2021, common sense dictates that starting fresh might be a good thing.
The Real Pegulas of Boca Raton
However, as we've watched the Pegula's in action with the Sabres over the course of the last nine years, logic is usually tossed aside when assessing motives as one can never really tell what's going on behind the scenes. Rumors when he first took over had "Uncle Terry" going on a power trip early on during his meetings with Buffalo media to the point where he and The Buffalo News sports department were/are at odds. Veteran beat writer Mike Harrington has continued a chilly, detached relationship with the owners seemingly out of mistrust stemming from those early meetings as well as the team's performance over the nine years the Pegulas have owned the Sabres. It's a far cry from the rumored cozying up that WGR550 seems to do which, according to a source, was a direct affect of toeing the line early with Pegula.
Despite dressing down and trying to come off as an average Joe, Terry Pegula often times comes off as curt and aloof behind a microphone. Granted, he's not really good at facing the cameras and that might have something to do with it, but his image has slowly changed from the sobbing fan that was lucky enough to have the wherewithal to purchase his favorite hockey team to that of a king overseeing his kingdom, banishing those who disagree with him.
At the Zoom call on Tuesday the Pegulas were big on "communication," which is something they've talked about before. “I’m going to label communication as one of the biggest issues with the Sabres,” stated Terry. He also mentioned Adams as being very "communicative" (and "loyal") and said that their triad at the top of hockey-ops (ownership, Adams and head coach Ralph Krueger) had the "100% open communication for a sports team to be successful" while eschewing the need for a president of hockey operations. And while talking about the "philosophical differences" between him and Botterill, Terry lamented "we felt we weren't being heard."
What he and his wife haven't quite figured out is just what they're communicating to the team, city, fans and hockey world in general. It's not real pretty either.
Terry Pegula was quite cavalier to begin his tenure as a professional sports team owner. That included a drunken sailor, NHL free agent shopping spree in 2011 to kick off his tenure which, to be honest, was much to the delight of Sabres fans who were accustomed to years of a "just break even" Sabres philosophy. Much of the Western New York Hockey community, seemingly with the help of WGR, also got behind their 2014-15 tank season as well. The Pegulas and upper management featuring Black were rather brash about what they were doing while the NHL and the national hockey community generally frowned upon that tank approach. Ultimately, however, it comes down to ownership and how they want to run the team, but sometimes it just doesn't look good.
While all that was going on, the Pegulas were expanding their footprint in downtown Buffalo and were expanding to other sports as well as entertainment. In hindsight it was an overly ambitious PSE expansion plan, which now has Kim Pegula as president of the umbrella company while also being president of their sports franchises.
Looking at the situation in it's entirety, all of the above might be forgiven as plenty of wealthy owners have had similar grandiose thoughts replete with overwrought ambitions. However, when the chips were down and the veil torn, which is what we're witnessing in 2020, what's emanating from "Pegulaville" is an ostentatious flaunting, however unintentional it may be, of the huge gap between their wealth and everyone beneath them.
Terry Pegula has mostly been behind the scenes while Kim is the face of their empire. While Terry should remain in that role as he's very awkward in front of the camera, Kim has been struggling in the public relations department and as of late coming off as cold and unwittingly condescending. After stating during the Wawrow interview that they were sticking with Botterill despite a resoundingly negative chorus emanating from Sabreland, Kim stated, “I realize, maybe it’s not popular with the fans, but we have to do the things that we feel are right,” she said. “We have a little bit more information than maybe a fan does, some inner workings that we see some positives in.”
That went over like a lead balloon and only added fire to a Bastille Brigade of fans who still remembered her Marie-Antoinette moment from Graham's Athletic piece in April.
Kim Pegula had run a meeting with a video presentation for PSE employees stating the company's goals. Honest enough. Her three-pronged approach had one column for Win Championships, with a "sustain success" sub-header and the next focusing upon Sustainability for "future generations." All well and good as those are very noble goals. However, the third column was a "let them eat cake" moment when it listed Return On Investment (in and of itself not obscene) with the sub-header, "fund business, taxes, lifestyle."
“What that told me,” said one current PSE employee to Graham (while referencing the 'lifestyle' part,) “is I’m getting laid off before they cancel that family trip to Tahiti.”
Also mentioned in the article was a delay in building the Pegula's super yacht.
The human element lost
"I don't know where that rumor started," he continued. "If you look at every oil and gas company, which is our core business outside sports, they're all—you might use the word—hurting. But we don't have any debt on our oil and gas business."
Yet you can't get away from the numbers and if they're accurate, or even close to accurate with the Sabres losing so much money, tearing down the hockey operations department based upon few successes and many failures might be expected, although it's never been done to this extent, according to Servalli.
From mediocrity to hope to worse than mediocrity and continuous turnover
The Sabres had been perceived as the grubby little street urchin of the league for a number of years prior to Pegula but when he bought the team in February, 2011 congratulations for long-suffering Buffalo fans came from around the league. Pegula and his wealth brought stability and financial freedom to a franchise with a modest history of success stories that came up just shy of winning the Stanley Cup. Buffalo is a hockey hot-bed that is consistently at or near the top of NHL television ratings and was perceived as the "little market that could," but just needed an owner that would allow them to play with the big boys.
Pegula was that man and it started out well as they made a late-season surge to make the playoffs in 2011 only to lose in seven games to the Philadelphia Flyers. Sabres GM Darcy Regier was kept on board, as was head coach Lindy Ruff, and the organization felt it needed a couple of pieces to get them to the next level. In the off season Pegula backed the high-priced signings of defenseman Christian Ehrhoff (whom some said Pegula insisted upon) and winger Ville Leino, two contracts that eventually would be regretted as both were bought out in 2014 as the league allowed for two compliance buyouts.
The optimism that fueled the 2011-12 season was soon steamrolled as Milan Lucic exposed the softness of the team Regier built in November and a month later Buffalo would lay an egg in Pittsburgh, Pegula's shining hockey city on the hill that he wanted his franchise to be like. "We saw some great goaltending tonight, didn't we?" said Terry in a derisive swipe at Ryan Miller and Jonas Enroth, as well as the team in general, after his Sabres lost to the Penguins 8-3.
Soon thereafter the lineup was slowly purged and the team went into tank-mode for a Pittsburgh Penguins-type, lose-now-to-win-later rebuild which secured two No. 2 overall picks--Sam Reinhart (2014) and Jack Eichel (2015.) This approach was met with league-wide derision and disdain and despite it being five years since their scorched-earth tank/rebuild, Pegula's Sabres still haven't been able to climb up from the lower rungs of the league.
Since the 2011-12 season, Pegula's first full season as owner, his Buffalo Sabres have compiled a 260-343-88 record and a .440 points percentage, good for a last place in the league. Since landing Eichel at the 2015 NHL Draft the Sabres have compiled a 156-188-53 record, or a .460 point-percentage, good once again for last in the league. And, although we don't have the empirical data to show what has transpired in other organizations, it's safe to say that the Buffalo Sabres under Pegula have gone through more organizational turnover than any other team in the NHL, or are at least near the top in that category.
Other than losing, the only other constant for the Sabres is turnover. Pegula's inner circle of Senior Advisors Ken Sawyer and Cliff Benson, are long gone as is Ted Black, the man who orchestrated the Sabres tank. Black and Russ Brandon preceded Kim Pegula as Sabres team presidents while the Pegula's have purged a number of other key executives including NHL/Sabres legend Pat LaFontaine, who was hired as president of hockey operations but left a few months later after a supposed dispute with ownership.
In addition to that group of higher-ups, the Sabres under Pegula the last nine years are on their fourth general manager, sixth head coach and have revamped their scouting department in a big way twice, the first time expanding it greatly, then cutting 2/3 of the staff in this latest purge.
A lot has been made concerning the release of Taylor and his coaching staff, but the Amerks were swept out both times they made the playoffs under him, despite much emphasis and dollars directed towards their success. And despite a large scouting staff on both the amateur and professional side of the equation, the results from both just haven't been there organizationally. This mainly centers around drafted players outside of Reinhart, Eichel and first-overall pick, defenseman Rasmus Dahlin, failing to make significant contributions up to this point as well as a long list of trades for pro players over the years that have either not brought back a significant return on equity or trades that have been an outright bust.
Attendance means dollars, poor attendance means...
Over the past few years the lifeblood of the Sabres, ticket sales, were diminishing. For the 2011-12 season, attendance at games ran at 99.9% or a 18,680 average attendance. Renovations led to 380 additional seats being added for the following season bringing their total capacity to 19,070, a number that coincides with the franchise being founded in 1970. The 2012-13 season was shortened by the owner's lockout and for 24 home games the Sabres were at 95.7% capacity with average attendance at 18,970.
Even during the tank years First Niagara Center's average attendance was 18,579 (97.4%) for 2013-14 and 18,580 (97.4%) for 2014-15, the year that saw management move on from any and every player with any semblance of NHL talent in order to finish last. Of note, that July over 15,000 fans headed to First Niagara Center to watch Eichel don the Blue and Gold for the first time in an intrasquad scrimmage at development camp.
Optimism was high that season and they averaged over 18,500 fans again. But the team stumbled the following season, head coach Dan Bylsma's second and final season before he and Murray were fired, and average attendance fell to 18,141. The enthusiasm of a Botterill/Phil Housley GM/Coaching duo led attendance to surge to over 18,500 again but a last place finish and a team that fell apart the following season saw attendance dip to under 18,000 and eventually Housley was fired. This past season saw attendance fall to just over 17,000 (barely above 90%) and over the past three seasons announced attendance was far above actual bodies in the seats as shown by a bottoming of the secondary market which saw tickets routinely going in the single digits.
When you add it all up, it's no wonder the Pegula's wanted to blow it up for a fresh start. And when you look at the time new general manger Kevyn Adams has to work with, as the possible start to next season could be as late as January 2021, common sense dictates that starting fresh might be a good thing.
The Real Pegulas of Boca Raton
However, as we've watched the Pegula's in action with the Sabres over the course of the last nine years, logic is usually tossed aside when assessing motives as one can never really tell what's going on behind the scenes. Rumors when he first took over had "Uncle Terry" going on a power trip early on during his meetings with Buffalo media to the point where he and The Buffalo News sports department were/are at odds. Veteran beat writer Mike Harrington has continued a chilly, detached relationship with the owners seemingly out of mistrust stemming from those early meetings as well as the team's performance over the nine years the Pegulas have owned the Sabres. It's a far cry from the rumored cozying up that WGR550 seems to do which, according to a source, was a direct affect of toeing the line early with Pegula.
Despite dressing down and trying to come off as an average Joe, Terry Pegula often times comes off as curt and aloof behind a microphone. Granted, he's not really good at facing the cameras and that might have something to do with it, but his image has slowly changed from the sobbing fan that was lucky enough to have the wherewithal to purchase his favorite hockey team to that of a king overseeing his kingdom, banishing those who disagree with him.
At the Zoom call on Tuesday the Pegulas were big on "communication," which is something they've talked about before. “I’m going to label communication as one of the biggest issues with the Sabres,” stated Terry. He also mentioned Adams as being very "communicative" (and "loyal") and said that their triad at the top of hockey-ops (ownership, Adams and head coach Ralph Krueger) had the "100% open communication for a sports team to be successful" while eschewing the need for a president of hockey operations. And while talking about the "philosophical differences" between him and Botterill, Terry lamented "we felt we weren't being heard."
What he and his wife haven't quite figured out is just what they're communicating to the team, city, fans and hockey world in general. It's not real pretty either.
Terry Pegula was quite cavalier to begin his tenure as a professional sports team owner. That included a drunken sailor, NHL free agent shopping spree in 2011 to kick off his tenure which, to be honest, was much to the delight of Sabres fans who were accustomed to years of a "just break even" Sabres philosophy. Much of the Western New York Hockey community, seemingly with the help of WGR, also got behind their 2014-15 tank season as well. The Pegulas and upper management featuring Black were rather brash about what they were doing while the NHL and the national hockey community generally frowned upon that tank approach. Ultimately, however, it comes down to ownership and how they want to run the team, but sometimes it just doesn't look good.
While all that was going on, the Pegulas were expanding their footprint in downtown Buffalo and were expanding to other sports as well as entertainment. In hindsight it was an overly ambitious PSE expansion plan, which now has Kim Pegula as president of the umbrella company while also being president of their sports franchises.
Looking at the situation in it's entirety, all of the above might be forgiven as plenty of wealthy owners have had similar grandiose thoughts replete with overwrought ambitions. However, when the chips were down and the veil torn, which is what we're witnessing in 2020, what's emanating from "Pegulaville" is an ostentatious flaunting, however unintentional it may be, of the huge gap between their wealth and everyone beneath them.
Terry Pegula has mostly been behind the scenes while Kim is the face of their empire. While Terry should remain in that role as he's very awkward in front of the camera, Kim has been struggling in the public relations department and as of late coming off as cold and unwittingly condescending. After stating during the Wawrow interview that they were sticking with Botterill despite a resoundingly negative chorus emanating from Sabreland, Kim stated, “I realize, maybe it’s not popular with the fans, but we have to do the things that we feel are right,” she said. “We have a little bit more information than maybe a fan does, some inner workings that we see some positives in.”
That went over like a lead balloon and only added fire to a Bastille Brigade of fans who still remembered her Marie-Antoinette moment from Graham's Athletic piece in April.
Kim Pegula had run a meeting with a video presentation for PSE employees stating the company's goals. Honest enough. Her three-pronged approach had one column for Win Championships, with a "sustain success" sub-header and the next focusing upon Sustainability for "future generations." All well and good as those are very noble goals. However, the third column was a "let them eat cake" moment when it listed Return On Investment (in and of itself not obscene) with the sub-header, "fund business, taxes, lifestyle."
“What that told me,” said one current PSE employee to Graham (while referencing the 'lifestyle' part,) “is I’m getting laid off before they cancel that family trip to Tahiti.”
Also mentioned in the article was a delay in building the Pegula's super yacht.
The human element lost
What sometimes gets lost in all the business-speak is the human element.
“I was shocked when I woke up yesterday morning to get the text from Jason (about Botterill getting canned,) just totally shocked,” said Taylor via a Sal Maiorana piece in the Rochester Democrat and Chronicle. “I didn’t even know what to think.” And that was prior to hearing his news.
“I didn’t get the call until the afternoon and I was definitely shocked again,” said Taylor. “I didn’t see anything coming, any talks about it. Nothing, even after I talked to Jason and Randy in the morning. I never thought anything about our staff at all. I’m still shocked.”
Taylor talked about the importance Botterill placed on a successful minor league club and having the youngins in an environment where they could learn how to be a pro, grow into their roles and gain the confidence needed to take their potential as far as they could. It seemed to be working, but now it doesn't matter as Taylor, who had deep Rochester roots dating back to his playing days in the Sabres organization from 1999-2004, finds himself on the street with no where to go in the AHL.
"Our family grew up here, our kids were 3 and 5 when we moved here and we never left,” he said. “Even when I had different stops, we maintained our house here — it’s 20 years now. What a great community, everything about the city. It’s special to us so it’s hard right now. All of a sudden, I don’t have a paycheck in two weeks, no health care for my special needs’ child in two weeks. Everything is just sad. Usually you recognize when something is going to happen, you have a little inkling, but this was nothing at all.”
While the Pegulas are interested in their businesses, their corporate babies, at the bottom of all this are the livelihoods of the people that have dedicated their lives to the sport and now find themselves out of a job.
As mentioned earlier, Taylor had done a standup job in Rochester coaching the Amerks to consecutive playoff berths after a three year drought prior to him arriving and was on his way to a third until the season abruptly ended. He was also seen as a good development coach as players hitting Buffalo seemed well prepared for what lay ahead at that level. Yet he and his staff were a part of the blast that obliterated the Sabres hockey department (due to results, according to Terry Pegula) and it left him in a state of shock.
“I didn’t get the call until the afternoon and I was definitely shocked again,” said Taylor. “I didn’t see anything coming, any talks about it. Nothing, even after I talked to Jason and Randy in the morning. I never thought anything about our staff at all. I’m still shocked.”
Taylor talked about the importance Botterill placed on a successful minor league club and having the youngins in an environment where they could learn how to be a pro, grow into their roles and gain the confidence needed to take their potential as far as they could. It seemed to be working, but now it doesn't matter as Taylor, who had deep Rochester roots dating back to his playing days in the Sabres organization from 1999-2004, finds himself on the street with no where to go in the AHL.
"Our family grew up here, our kids were 3 and 5 when we moved here and we never left,” he said. “Even when I had different stops, we maintained our house here — it’s 20 years now. What a great community, everything about the city. It’s special to us so it’s hard right now. All of a sudden, I don’t have a paycheck in two weeks, no health care for my special needs’ child in two weeks. Everything is just sad. Usually you recognize when something is going to happen, you have a little inkling, but this was nothing at all.”
That's the human toll that makes business decisions so cold and it's the types of decisions businesses have to make.
The hits just keep rolling for the Pegulas in public relations department as one blunder after another dig them deeper and deeper into a hole of mistrust amongst the fan base. Much like their hockey team, their PR work has been a disaster under their leadership and the scary part is that they're of the firm belief only they can fix it. Perhaps said belief is simply hubris or perhaps it's a defense mechanism having been burned so many times by those outside the organization.
Past hires and failures cost dearly in more ways than one
The Pegulas have developed an aversion to hiring anyone from the outside and this aversion became stronger after having put their faith in Botterill. The list of coaches and GM's that have in the very least let them down, or worse sucked money from them with middling to poor returns, had been getting longer with each passing year and it brought them to the point of hiring Adams, someone who's been with them nine years. From Regier to LaFontaine to Murray and Botterill on the Sabres to Bills GM Doug Whaley (whom they kept on after buying the Bills and signed to a contract extension) and head coach Rex Ryan to former team president of both the Bills and the Sabres, Russ Brandon, it's been failure after failure and millions of dollars being doled out to fulfill contracts of those whom they'd parted ways with.
Ryan alone cost $15 million for three years to not work for them while Murray tacked on another three years of salary while they were paying Botterill as Sabres GM. They'll be off the hook with Murray at the end of this month but will then be paying Botterill not to be their general manager.
With that in mind, they didn't even begin a general manager search this time 'round. Instead they opted for an in-house hire in Adams because he's long been a part of the organization. "We had Kevyn in mind very recently only because we know him over nine years,” Terry Pegula said. “He has handled very admirably any job we’ve given him. We have had the pleasure of watching Kevyn build his post-playing career over the past nine years under multiple roles throughout our organizations.
"There’s a difference between interviewing an individual for the first time and never having met that individual and putting that individual in a position of trust in the organization," he explained. "We have known Kevyn for nine years and keep jamming him with responsibilities and he kept rising up the ladder. He’s a very knowledgeable and passionate person, he’s a great communicator and this isn’t some scattershot decision that we made."
Past hires and failures cost dearly in more ways than one
The Pegulas have developed an aversion to hiring anyone from the outside and this aversion became stronger after having put their faith in Botterill. The list of coaches and GM's that have in the very least let them down, or worse sucked money from them with middling to poor returns, had been getting longer with each passing year and it brought them to the point of hiring Adams, someone who's been with them nine years. From Regier to LaFontaine to Murray and Botterill on the Sabres to Bills GM Doug Whaley (whom they kept on after buying the Bills and signed to a contract extension) and head coach Rex Ryan to former team president of both the Bills and the Sabres, Russ Brandon, it's been failure after failure and millions of dollars being doled out to fulfill contracts of those whom they'd parted ways with.
Ryan alone cost $15 million for three years to not work for them while Murray tacked on another three years of salary while they were paying Botterill as Sabres GM. They'll be off the hook with Murray at the end of this month but will then be paying Botterill not to be their general manager.
With that in mind, they didn't even begin a general manager search this time 'round. Instead they opted for an in-house hire in Adams because he's long been a part of the organization. "We had Kevyn in mind very recently only because we know him over nine years,” Terry Pegula said. “He has handled very admirably any job we’ve given him. We have had the pleasure of watching Kevyn build his post-playing career over the past nine years under multiple roles throughout our organizations.
"There’s a difference between interviewing an individual for the first time and never having met that individual and putting that individual in a position of trust in the organization," he explained. "We have known Kevyn for nine years and keep jamming him with responsibilities and he kept rising up the ladder. He’s a very knowledgeable and passionate person, he’s a great communicator and this isn’t some scattershot decision that we made."
"The other GMs that we had hired or were here before, we interviewed them," added Kim. "You call around. But until you get to the day-to-day, sometimes it takes years to understand where they’re at and what common ground that you guys find together."
McDermott/Krueger...Beane/Adams...Bills/Sabres
One thing the Sabres organization has going for them is head coach Ralph Krueger, a former Premier League executive with Southampton. Krueger was hired by Botterill to take over the head coaching reigns from Housley, who's two years behind the bench in Buffalo were disastrous. The organization not only needed someone to earn the trust of players, but the new coach also needed to earn the trust of the Pegulas. The worldly Krueger served in that capacity well although his on-ice record and the failure of his team to make the playoffs contributed to the firing of the man who searched him out and hired him.
A lot has been made of the parallels between management of the Bills and their success under the Pegulas, which includes playoff appearances in two of the last three seasons after a 17-year drought, and recent developments with the Sabres. They hired Sean McDermott as Bills head coach before they brought on Brandon Beane as general manager. We're seeing the same thing play out with the Sabres as Krueger was hired, and stayed on through the front office transition with both McDermott and Krueger gaining the full trust of ownership.
Despite the similarities, there are big differences. Beane's resume' includes eight seasons as and executive in the Carolina Panthers organization, including two as assistant general manager, while Adams had less than two years as an assistant coach for the Sabres and comes from the business side of the equation. The NFL is a behemoth with a huge television contract and ample money to play with at all levels of the organization and owners are almost guaranteed to make money. The NHL isn't anywhere near those levels and desperately needs fans in the seats for most of its revenue. Which brings us to the present circumstances. Beane was hired in the luxury of the financial juggernaut that is the NFL, a league that seemingly can withstand almost anything, while Adams was hired in a more backwoods NHL amidst a pandemic that's shaking the very foundation of the league.
For as much pressure as Adams has, Krueger may be the key component moving forward and if things somehow work out he could go from being a behind the scenes executive guru to the type of executive that puts Terry and Kim Pegula firmly in the background. However, as of right now it's Adams and Krueger with the latter being more than willing to impart his knowledge on the Sabres third rookie GM in a row. "We had lots of conversations," said Krueger of his contacts with Adams. "They were much more around business because of my past as chairman in Southampton and Kevyn in his new role.
The Pegulas were noticed but is it an isolated incident or will it become a trend?
Will it work? Who knows? But in looking at what just transpired in Buffalo with Terry and Kim Pegula commandeering the Enola Gay and leaving a mushroom cloud in their wake for the entire sports world to see, professional sports in America is at a critical stage because of the coronavirus. No matter how much we may wish for normalcy, it doesn't look like there will be a return to that any time soon. Social distancing is the medically mandated new norm right now and until a vaccine is developed and proven to work as it should, or we reach heard immunity (and estimated 60-70% of the population being infected and developing antibodies,) which is far away right now (an estimated 5-10% are said to have developed antibodies,) the new norm is the norm. Because the NHL is a gate-driven league, they're about to get crushed if there are no fans in the stands and it's highly likely the Pegulas will be the first of many organizations taking draconian steps to financially deal with this new norm.
That quote was directed at the "bloodletting" he mentioned earlier while focusing the purging of Buffalo's scouting and development staff. "Not limited to 7 teams who might not play again until Jan.," he continued in the tweet. "Some worried others will take notice - w/ most scouting work already done."
This has been, and will continue to be, a summer unlike any other in the sports world with the Sabres at the forefront of what may be a rash of professional teams (at least in the NHL) following their lead. In a sense, and from purely a business perspective, however cold it might be, it could turn out to be an appropriate business decision, or even a survival decision, given the circumstances. Having said that, had the Pegulas been able to run the Sabres organization better than they have, perhaps the mega-tonnage they dropped on Sabreland this past Tuesday could have been scaled back with less impact on individuals like Chris Taylor, who really didn't deserve a fate like this.
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