Reading Royals Sold

[Woo Hockey]

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[CHRDANHUTCH]

I was just about to post the same thing

 

[wildcat48]

Berks County Convention Center Authority buys Reading Royals

 

[mk80]

Didn't they own the Royals before Gulati?

 

[royals119]

Somewhat surprising move. The authority owned the team previously for a few years. Originally co-owned by the Kings (AEG) and SMG (who manages the arena), the Kings sold out to SMG some time after they moved their ECHL affiliate to Ontario. SMG was rumored to be shopping the team to a guy from Baltimore for potential relocation when the convention center authority stepped in and bought them. They operated the team on a shoestring budget for a few years and then said they would prefer someone else buy the team, since they were concerned their income from hotel taxes may not be able to support paying the bonds from arena construction and covering the cost of operating the team. Guiliati stepped up and bought the team. He is also an investor in the new doubletree hotel across the street, and has other businesses around the area. It was thought that even if they team didn't make a profit he would still benefit from some crossover with the hotel and promotion of his other restaurants and businesses at the games. He is also a millionaire who wants to see the city recover from its economic crisis, so he seemed willing to spend his own money to keep it going for the benefit of the downtown.

The convention authority obviously doesn't want to lose the team because the games still bring people to the arena 36+ times a year to buy food and beverages and pay box office fees. Will they be able to operate the team financially in a way that any losses are offset by other income? The current manager of the arena was the GM of the Royals when the authority owned the team last time. I assume they will put him in charge of both once they take charge. He also manages the nearby theater, and is developing a building next to the arena that the authority owns to be a sports bar and office space. That's a lot of hats for one guy. The key to long term success is going to be finding people with customer service skills who can reconnect with the fans, and enough business sense and connections to spend money wisely.

Guilati has been involved in a dispute with the mayor and the parking authority over parking at city owned garages. Long story, but Guilati's pal, (the now deceased Al Boscov) was instrumental in developing the hotel and a movie theater, and negotiated favorable parking deals for the garages that were built next to each. They both also supported the mayor's opponent in the last election (who is spending time in federal prison for bribery and corruption). The Royals also have a deal with the parking authority to provide discounted parking for season ticket holders. There was a dispute over the summer about who owed who money from last season's contract. It got resolved just before this season, and we got out parking passes late. The current mayor has tried to break the parking leases for the hotel and the theater, and they are currently in litigation. Not sure if that plays a role in the sale, but it certainly didn't help.

 

[Hurricane Ron]

I'm curious if the decision to sell the Royals has anything to do with Gulati also owning the Allen Americans, and the costs associated with running that team. Unlike the prior ownership group for the Americans, Gulati has increased their travel expense budget, with the Americans only busing to games in Tulsa, Wichita and Kansas City; and flying to their other out of town opponents.

Interestingly, the additional expenses being incurred with the Americans, has resulted in a reduced lack of success on the ice since his purchase. It has been reported that after his purchase, that he expected "butts in the seats" for the improvements/additional expenses he was incurring for the team. Attendance has also decreased since his purchase.

It will be interesting to see if he keeps his ownership of the Americans, or has decided to sell his interests in minor league hockey completely.

 

[JMCx4]

... Interestingly, the additional expenses being incurred with the Americans, has resulted in a reduced lack of success on the ice since his purchase. ...

I doubt you can cite Mr. Gulati's additional expenses as the cause of the Americans' precipitous fall from near the top of the League to the bottom in just 2 seasons. Unless you're suggesting the teams' play has suffered from all those airline meals.

 

[Royalsflagrunner77]

I know from personal experience . That since jack took over the Royals customer service took a hit . Also he made a ticket price adjustment that hurt attendance . With that being said you could also see since jack bought Alan how he was budget cutting in Reading . Most if his working staff are college interns and he also took the ticket reps compensations away . The serious decrease in wage hurt reps job performance making most of the good reps leave for other opportunities.

 

[Hurricane Ron]

I doubt you can cite Mr. Gulati's additional expenses as the cause of the Americans' precipitous fall from near the top of the League to the bottom in just 2 seasons. Unless you're suggesting the teams' play has suffered from all those airline meals.

Poor choice of words on my part. I was trying to convey that the increase expense budget for travel hasn't resulted in better results on the ice, nor the box office, for the Allen Americans.

I also was questioning whether his purchase of Allen, and the associated expenses, was a factor in him selling the Royals.

 

[JMCx4]

... I also was questioning whether his purchase of Allen, and the associated expenses, was a factor in him selling the Royals.

Now THAT is believable. When the announcement was made that Gulati was purchasing the Amerks, I wondered how long it would be before he sold the Reading team. I guess the answer was: "Oh, about 2 years."

 

[royals119]

Latest article in the paper here says his original agreement was to own the team for five years. The five year agreement was ending, so he was looking to sell, and the arena authority bought the team so it would stay in town. I have no idea if he had a similar agreement in Allen where he promised to own the team for a specific period of time. He was sharing administrative staff between the two teams though. The CFO and the director of merchandise were spending time with both teams. Obviously that won't continue, so that may impact Allen also.

In his defense he spent a lot of money on the team while he owned it. He got the new high definition center hung video scoreboard, he replaced all the boards and glass, made other arena upgrades, invested in a new bus, and didn't skip on equipment and supplies for the players. His hiring and people skills weren't the greatest, and his falling out with Larry Courville certainly did some damage to the fan base (some loved Larry, some didn't, but the way he was forced out certainly turned some people off).

I think the biggest problem was poor customer service, and disorganization among the staff. You ask someone a question, they answer, you follow up with someone else based on that information and you get a different answer. A few days later there is an email or press release the contradicts both.