As hockey changes, Silvertips aim to reconnect with Everett

EVERETT — The Everett Silvertips begin training camp Thursday, reaching their 15th season as a franchise in the Western Hockey League and surviving in a business where the battle for profits is every bit as intense as the action on the ice.

The anchor tenant of Xfinity Arena, the Silvertips have outlasted often winning teams that offered indoor football, lacrosse and basketball.

The Silvertips, comprised of players aged 16-to-20, are coming off two U.S. Division titles in four seasons. Yet that success wasn’t enough to earn a contract extension for Kevin Constantine, the most-successful head coach in franchise history. Three consecutive second-round playoff exits certainly didn’t help.

The new coach, Dennis Williams, has long worked for the Silvertips’ parent company, Consolidated Sports Holdings International, Inc. He was head coach of the North American Hockey League’s Amarillo Bulls and the United States Hockey League’s Bloomington Thunder. There also are new uniforms in a throwback style that drop the words “Everett Silvertips” and bear logo on the front for an old English “E.”

“We do have a lot of casual hockey fans and we do have a lot of people who haven’t been to a game yet even though we’ve been here for 14 seasons, so we’re really hoping to reinvigorate our connection to the community and to the region,” said Zoran Rajcic, the chief operating officer of CSH International. “The anticipation is that we’ll have a solid hockey club this season again, that people will come, and we’ll see the dynamics of the new style of play that Coach Williams is going to bring to the table, and we’re excited about all those things.”

Medicine Hat, Alberta, businessman Bill Yuill is the chairman and CEO of the Monarch Corporation, a private investment firm that owns the Silvertips through CSH International, its sports properties division. He comes from a family of Canadian entrepreneurs who made their fortune in cable television and fiber optics, railroad and real estate. Yuill is a former owner of the Seattle Thunderbirds before launching the Everett team. He’s been involved with Puget Sound-area hockey for 28 years.

Everett, which reported $4 million in revenue last year, has had back-to-back seasons without attendance growth. Moreover, the decades-old business model for junior hockey is being challenged in several class-action lawsuits working through Canadian courts. Players are seeking at least minimum wage and back pay.

Unlike past seasons, the off-ice business of the Silvertips likely will attract as much attention as how many pucks get to the net.

The business

The Silvertips shocked the WHL world as an expansion franchise in 2003-04, winning the U.S. Division and their only Western Conference title to date. The Tips averaged 5,663 fans attending each game that season.

The Tips rode that wave to an average of 6,390 fans in their sophomore season, third highest in the WHL. Attendance peaked at 6,460 during the 2006-07 season in which Everett claimed its only Scotty Munro Trophy for the best regular-season record and finished fourth in attendance among all WHL franchises. That season also saw Constantine’s first exit from behind the Everett bench.

The team’s attendance since has pretty much followed what has been happening across the league. It’s generally declined slightly each year.

Constantine returned in the 2013-14 season. There was a slight uptick his second year back. At the end of last season, Everett was the seventh top-drawing team in the league, despite a franchise-low average attendance of 4,865 per game.

“It’s down in most sports,” Rajcic said. “You’ve got NFL teams that aren’t selling out their facilities in some cases. Not all of them, but some cases there. Major League Baseball has had the same thing and us in junior hockey. It just levels off.”

Day-of-game sales and group packages have actually been on the rise, while season-ticket packages have gone down, Rajcic said. Some of that could be the changing demographic of Everett fans. Rajcic offers one scenario: a four-person family with young kids and four season tickets during the inaugural season in 2003 might now be a pair of two-ticket empty-nesters with adult children away at college or living elsewhere.

Consequently the Silvertips have added the six-game mini-plans and sought to minimize mid-week dates at home. They have nine Sunday home games this season, with 31 of their 36 home dates on weekends.

House money

Constantine grew up in the “Land of 10,000 Lakes.” The Minnesota native has indulged his love of water at virtually every stop he has made on a nomadic coaching career that has taken him to the East Coast, France, Canada, California, Switzerland and Texas.

Everett was no exception.

Constantine’s winning ways played a big role in drawing fans through the arena doors. More than a decade ago, he evidently was so beloved by Silvertips ownership that they put up hundreds of thousands of dollars to help him build a summer getaway on Center Island. The exclusive private community west of Anacortes in San Juan County is accessible only by boat or charter airplane.

During the 2005-06 season, the Silvertips were in their third year, had earned their second U.S. Division title and reached the Western Conference finals.

In February 2006, Constantine and another Yuill-owned company, Big Bear Developments, entered into a complicated transaction that resulted in the coach becoming legal owner of a lot on the island that had previously been acquired by the company. Public records don’t spell out all of the details, but make clear the real estate deal was well into the high six-figures. On that land, Constantine built a stunning retreat that in future years would become a place where he would gather and relax with his players.

But if Silvertips ownership had hoped the island house would give Constantine a reason to stick around, that didn’t happen. A year after securing the property, Constantine left to take over as head coach of the American Hockey League’s Houston Aeros.

Fans rejoiced six years later when Constantine returned. The move also confounded some. The popular coach’s style of play seemingly reflected his own past as a goalie and tended toward the defensive side. General manager Garry Davidson had made clear he wanted a faster, more offense-oriented game. Some speculated Yuill may have had a hand in bringing Constantine back.

When Constantine’s contract wasn’t extended this spring, despite a division-winning season, rumors swirled that something had gone wrong between Yuill and Constantine. Some pointed to the Center Island property deal.

The parties wouldn’t talk much about the house. On April 2 in Victoria, Yuill unequivocally told The Daily Herald, “it’s (Constantine’s) house.”

Constantine said he didn’t know why his contract wasn’t renewed.

“You’re asking questions from someone who was more than willing to do whatever it took to remain as a coach in Everett,” he said. “All I can tell you is I wanted to be here and I was more than willing to do whatever it took. As far as why they did what they did, you’re making me try to guess that and I never guess things. So you gotta ask the source.”

The lawsuit

Perks such as Constantine’s house deal are part of amateur athletics. In addition to big salaries, coaches in NCAA Division I football and basketball lay claim to country club memberships, use of vehicles and airplanes and even booster-paid-for homes.

Junior hockey is big business. Just how big, and what should happen to that money, is now the focus of lawsuits in Canada.

Sam Berg, a former player for the Niagara IceDogs of the Ontario Hockey League, initially filed suit against the Canadian Hockey League and OHL in 2014. He alleged that major junior hockey players have an employer-employee relationship with the clubs and are entitled to minimum wage. Separate lawsuits have been filed against the WHL and Quebec Major Junior Hockey League.

Canadian courts in 2000 declared that players are employees. However, the CHL has maintained that the Silvertips and other major junior franchises play in development leagues comprised of amateur student-athletes. They argue that exempts club owners from paying players more than the small weekly stipends meant to cover gas and occasional food purchases during the season. Clubs also provide room and board for players using billet families.

The leagues claim many teams lose money or break even, and forcing them to pay minimum wage would cause teams in smaller, less-profitable markets to fold. Fewer teams would mean less opportunities for players.

Judges in Ontario and Alberta have certified the lawsuits as class actions, allowing them to proceed in Canadian courts. All former OHL and WHL players going back to the 2012-13 season are automatically plaintiffs unless they opt out. U.S.-based teams, including the Silvertips, are exempt from those rulings.

“We feel strongly that the case doesn’t have any merit because our players are amateur athletes and are registered as part of the Canadian and U.S. amateur hockey system,” WHL commissioner Ron Robison said last week. “… However we respect the court’s position and we’re working through that process right now.”

In 2015 the Washington Legislature passed a bill memorializing amateur status for Silvertips and players for other in-state teams. It exempted the clubs from paying minimum wage. Similar laws have passed in British Columbia and Saskatchewan.

The WHL is now working with people in Oregon, Manitoba and Alberta on similar legislation.

How much money?

WHL teams were required last year by Canadian courts to turn over tax returns and financial statements.

An analysis commissioned by the CHL and a report released in February indicated that most teams break even or lose money. The players’ analyses call that math into question.

Teams reported their expenses and revenues in a variety of ways, without fully explaining where the money came from or how it was used. For example, one OHL team reported leasing four BMWs for its employees, identified in court papers only by their first names.

A plaintiff’s expert said that right now it is impossible to determine how paying minimum wage would affect clubs because there simply isn’t enough information.

According to a report by TSN, a Canadian-based media outlet, the Silvertips in 2016 claimed revenues of $4 million and profits of nearly $264,000. The Seattle Thunderbirds reportedly generated a WHL-best $5.6 million in 2016 and claimed a profit of nearly $1 million. The Edmonton Oil Kings claimed $6.6 million Canadian in revenue with a profit of $1.4 million. Yet 11 of the 21 WHL franchises that provided information (Portland declined) said they lost money, led by Victoria’s $1.5 million.

Still, the plaintiff’s expert noted, a number of teams that reported losses sold for millions of dollars in the period studied.

“The records they are keeping are not really instructive of what they are making,” plaintiff attorney Ted Charney told the Winnipeg Free Press last month. He told the newspaper that’s because of “accounting stuff” designed to limit tax exposure.

It’s clear from the clubs’ revenues that they are bringing in a lot of money, the attorney said. And it’s just as clear that it isn’t going to the players.

The unseen costs

One of the main player benefits touted by the WHL is its scholarship program that pays for a year of tuition and books for each season an athlete competes in the league. In addition, the clubs are responsible for paying for players who take college classes while in the league.

Former Silvertip Tristen Pfeifer completed two full years of college while playing for Everett as an 18- and 19-year-old and is expected to complete his undergraduate degree for free by the age of 22.

That’s one advantage league proponents say could go away if teams are forced to pay their players. Both sides agree that each team would be out about $300,000 a year if required to pay minimum wage.

One criticism of the WHL scholarship program is that players must use the package within 18 months of completing their junior eligibility. That means players on the fringes of professional hockey often have to make that call after only a year of playing in the minor pro ranks. Robison said the league is open to change.

“Over 50 percent of the players graduating now are accessing the scholarships,” said Robison, the WHL commissioner. “It’s the largest and most comprehensive of its kind in Western Canada and I think has served the players’ interests extremely well. At the same time we continue to look at our benefit program overall and will continue to make improvements.”

There remain other costs borne by WHL franchises. They are responsible for travel, hotels, sticks, skates and other equipment, as well as insurance, medical care and rehabilitation that comes with the physicality of hockey.

Additionally, athletes don’t have to pay to play major junior hockey. That’s a significant shift from the midget ranks, where elite programs can cost families tens of thousands of dollars. For example, it can cost $15,000 per year to play for the 16-U Junior Silvertips of the Everett Youth Hockey Association, according to Rajcic.

The future

The litigation in Canada has been slow moving, but already is fueling big concerns — and not only for hockey.

“I know that other levels of junior hockey and other levels of amateur sport are very concerned with this,” Robison said, “as it would set a very significant precedent, which would have a broad impact adversely on the amateur sports system not only in Western Canada, but throughout the Pacific Northwest as well.”

Constantine’s departure signals a new era. No longer will the Tips look to the past to gain inspiration.

As camp begins, it remains to be seen how the coaching style of Dennis Williams will affect the gate and by extension the bottom line.

Follow Herald Writer Jesse Geleynse on Twitter or email him at: jgeleynse@heraldnet.com.