National basketball league racking up brownie points in P.E.I.

Posted on February 23, 2012 | Atlantic Business Magazine | 0 Comments

Storm surge

National basketball league racking up brownie points in P.E.I.

You hear it all the time from new entrepreneurs: there are a lot of hoops to jump through on the way to getting established. While Duncan Shaw and Darren MacKay haven’t had to literally jump through those hoops, their latest start-up is consumed with shooting for them.

Shaw and MacKay are the proud co-owners of P.E.I.’s professional basketball team, the Summerside Storm. Neither had worked in the sports entertainment industry before founding the team last fall. They were, in fact, about as far away as you might get: owners of software development firm Cogsdale Corporation. Now, not only are they the owners of a new team in what is — to them — a new industry, they’re members of a new league too: The National Basketball League of Canada was founded in May of 2010, and is finishing its first regular season this March. If that name sounds familiar, that’s because there was a Canadian NBL once before, in the early ‘90s. That league folded before the second season ended, but this time, says Shaw, things look like they might be different.

“You are starting with established teams, which is different from other attempts. The business model is strong, we have a salary cap to keep costs under control, and we have some stuff that allows us to share revenue within the league if that comes to be and we have some national sponsors . . . so there’s certainly some strong reasons to think the league will make it and be successful.”

When it comes to jumping into a new business, starting a basketball team sounds like a pretty fun venture. And it has been, according to Duncan Shaw: “It’s a start-up business, so there’s real work to it, and there’s real issues. I don’t want it to sound like a trip to Disney. But yeah, it’s an awful lot of fun.”

Most of the frustrations are the same as you might have with any young business getting off the ground — principally, that everything takes longer than it should. Last fall, everything seemed to happen at the last minute, including a coach hired at “the eleventh hour” and a stadium contract signed only a week before the first game. With those hurdles out of the way, though, professional basketball has been very much “game on” in P.E.I.

As far as business models go, this one follows a “Field of Dreams” type of scenario: If the Storm is successful in attracting the fans, it’s expected the revenue will flow naturally. The team hopes to earn 40 per cent of its revenue from attendance, 40 per cent from sponsorships, and the final 20 per cent from merchandise and incidentals.

Surprisingly, however, Shaw says that making money was never his or MacKay’s primary goal when they took on the Summerside Storm. He says they bought into the league because they believed it would be an important community-building initiative. And community they have. Talking to the co-owners, it sounds as if team members spend all their time visiting schools and hospitals, leading reading programs or fundraising for breast cancer research and youth basketball.

The game held on January 20 was an apt case in point. That night, the Storm won their first home game in seven weeks, on a league-wide “Cure on the Court” breast cancer awareness night, in front of a 75 per cent capacity crowd of 3,094 fans at Credit Union Place. It was a close match, with the Oshawa Power starting strong, then lagging in the last quarter.

During the game, Shaw and MacKay announced that they would personally match fan donations, which totaled $2,200 by the end of the night. At the same game, in an entirely different fundraising venture, the Storm presented P.E.I. minor basketball with a cheque for almost $5,000. Final score: 129 to 121 for the Summerside Storm and an unbroken winning streak for the community.

By Martin Connelly

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