Rome Burns: Part III

There is no proven model for what type of owner most
successfully runs a professional sports team in the long run. There are teams
owned by corporations and investor groups. Some are family owned, sometimes on
their second or third generation running the team. Then there are
owners as individuals who own the team and call all the shots themselves.
Sometimes running the team is their primary profession, sometimes it isn’t.

It’s all over the map. There are no clear best practices to follow.

Daryl Katz is the Owner and Governor of the Edmonton Oilers and the head of the Oilers Entertainment Group. He is also the Chairman of the Katz Group of companies with over 8,500 staff as well as a burgeoning real estate portfolio that will ultimately rival Rexall Drugs in value. He is also overseeing
the construction of an arena, an arena district including two towers and
casino.

So long on dollars, short on expertise and time – what does a guy like Katz do to run his empire most efficiently? He hires executives by the bushel to run
the team and replace the skill sets and time he lacks. Then he trusts the executives to ensure they are hitting their marks with regular reviews and updates. Small business owners
feel they have to do everything themselves. Big business owners know they have
to hire the best people available and make sure they have all the resources
they need to do their jobs.

Now whether or not they do a good job is an entirely
different matter as anyone watching the experts running the Oilers in the last
decade can tell you.

Therein lies the problem for Katz or the owner of any other
company that requires deep knowledge of an area that is not the day to day
mechanics of running the business. You need to rely on experts in that field –
in the nerdy world of the internets we call this “domain knowledge”

Condensing that gibberish into English it basically means
“you can be a kickass bakery owner and never have baked a loaf of bread in your
life. As owner you know how to operate the business properly and hire the best
bakers in the world.” It also means that owners don’t make good GMs and GMs don’t become owners. 

Each has their role in the play.

When Daryl Katz concocted this Oilers master plan long ago,
surely he imagined winning all the time, Kevin Lowe presenting him with the
Cup in his luxury box and bashfully declining all interviews while parades were
held and children named in his honour by the school busload.

He ceratainly wasn’t like, “You know what I’ll do? Drop 210
million on the team, pay Cam Barker 100 trillion dollars for two great years and miss the
playoffs nine consecutive seasons. Then I’ll have the entire city hate me, which
is great considering I am already not the most social guy at the best of times. 

The glares and hatred of my fellow man will keep me warm as I go about my day. Plus I can
conveniently stay off the internet for fear any search will route me to message
boards and articles where I am being called every name under the sun.” 

Generally speaking if you have 200 odd million lying about
and a burning desire to get lambasted by your hometown citizens as an NHL team
owner you haven’t been spending the bulk of your career learning what makes up
a good powerplay, or how to identify “glue guys” in the room. You can’t draft
players, examine the “Corsis” or the “plus minuses.” You don’t know if Frederic
Chabot would be the ideal goalie coach*

Instead you probably have substantial domain knowledge of
your own – say how to build a company that makes you rich enough to be able to
buy an NHL team at your leisure for example. That billion dollar company that
pays for your hockey team has tons of domain experts on it’s payroll too, be it
Pharmaceuticals and Real Estate like Katz’s operations or running 99.4% of all
the pizza restaurants in the world like Mike Illitch in Detroit. You learn to trust your domain experts as you can’t be everywhere at once in your sprawling business empire as much as your controlling tendencies want you to be. 

Consequently, there is a gigantic gap between hockey people who have long been in the game and are perfectly suited to running a team and the people who actually have the cash to buy a team. It’s the
case with most franchised businesses – Tim Horton’s managers are rarely able to
buy Tim Horton’s franchises and Tim Horton’s franchisees have rarely worked in
a Tim Horton’s prior to buying a franchise and entering their training program.

One has to think that the NHL franchisee training program
consists of “do you want a franchise?” and “please deposit massive cheque
here.” Hell I bet Tim Horton’s franchisees actually get a lot more training
than someone buying a $200 million franchise. Funny that. So buy a team and you learn on the fly. Or you don’t and your team languishes. 

On paper Kevin Lowe and Craig MacTavish are exactly the right
people to run this team. Long time hockey men who have bravely waved the Oilers
banner since the franchise basically started. Smart dudes who won repeatedly at the highest
level as players and have put in many years since retirement in all levels of
the Oilers franchise. And they have already made an indelible mark on Daryl
Katz and are friends away from the rink.

From what I can gather from talking to older Edmontonians and
random people at the bus stop Katz grew up roughly the same age as the 80s Oilers when they were drinking from Lord Stanley’s silver chalice every 12 months
or so. 

Imagine being a young Katz and witnessing all this success in his
twenties. Surely his buddies winning cups at will in his formative years had some impact on the young man before he went out and
took the corporate world by the tail. 

When things came full circle and it was he who was entering into the hockey world with the purchase of the Oilers it seemed a natural fit to keep the same men on who were already running the team. They were already doing the job and seemingly well at that point.

But these same winners, these same close friends for almost 30 years, these same guys who “know a thing or two about winning” have done a spectacular job
of failing Daryl Katz since the day he bought the team. There have been no free agent signings of note, no blockbuster trades bolstering the lineup. Just trip after trip to the Entry Draft and bringing home the best prospect that you get for being worst.

The ties that bond this crew of the Boys on the Bus seem to be some of the strongest ties one could ever see.
They were exposed to a tremendous amount of success early in their lives as a
team, stuck together then and now and
continue to stick up for one another non stop. 

Gretzky himself was giving the Oilers management glowing praise amidst a nine game losing streak the other night when the Blues unkindly interrupted him by scoring on the hapless Oilers. This from the Greatest player ever who hasn’t even suited up for the team in 26 years.

They are all thick as thieves this crew and this loyalty is what made them one of the best teams in hockey history. (Side bar: know who isn’t thick as thieves and won’t be even speaking to each other in a few years let alone when they are old men? The 2010-2015 Oilers lineups. You watch.)

But when loyalty to the people involved with the team takes priority over success and accountability the machine will surely jam. Thus what we see in our Copper and Blue.

They say that those who can’t do teach. Perhaps those who can do cannot teach. This is a big problem for the Oilers. Success on the ice as former players seems to have little to do with
success in the boardroom, behind the bench or in the GM’s box. 

Hell the
greatest player of all time (and legitimately one of the best human beings of
all time) ran a 142-161-24 record as an NHL Head Coach in Phoenix. If that doesn’t drive
home the point that not everyone twirling around Northlands Colisuem in the 1980s raising
Cup after Cup will do well as a Coach or Executive nothing will.

That they have been unable to deliver anything resembling a
winning record in a decade is a calamity of epic proportions. The time span of futility goes beyond a rebuild or a bad stretch of player development. This is now stretching into “something is very wrong” territory. 

TPTB are unable to get the job done. They have been at it
too long, with too much frustration and rage. 
Their high expectations of winning haven’t translated into much of
anything in the last 10 years and that is more than enough of a data set to
conclude they are incapable or unable to do the job that is required of them.

And you know it must be killing everyone involved. I’ll bet you one Canadian Dollar that Lowe has probably tried to quit many times and Katz is
having to talk him into staying on the regular. He is an exceptionally proud
man our Kevin and staring failure in the face this many times and being unable
to coax similar levels of output out of kids that you put in when you were their age must
be horrible.

Has the Daryl Katz era of owning the Oilers seen any level
of mild success on the ice? No. Has he kept people in key roles long past their
expiry date? Yes. Have people who left strangely been brought back into the fold? Yes. Has an extensive search for outside talent been conducted when roles become available? No. 

Has Katz been sold a bill of goods by his domain experts for almost 6 years now,
involving long term success at the expense of short term wins? Yes. Has this worked? No.

This will never do. The Oilers have become that team that
the Harlem Globetrotters bring on tour to routinely kick the crap out of. I hate the Generals.

Next up: This tire fire of a team ultimately comes down to the best players on the squad and the leaders. How they have failed spectacularly too. (FUN!)