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Is Metro Atlanta Losing More Than a Hockey Team?

Why the failure of the Thrashers is a warning to all local businesses.

When the to Canadian-based True North Sports and Entertainment Limited, it seemed to have a virtually infinitesimal effect on the Cobb area. Here in SEC football and NASCAR country, who really cares about losing a pro hockey team? An unsuccessful sports team leaves Atlanta, and the impact on Kennesaw, on the surface, seems to be non-existent.

The Atlanta Thrashers boondoggle is perhaps the greatest testament to metro Atlanta’s commercial organization problems to come along in quite some time. Charting the Thrashers' disastrous 12-year stay in Atlanta tells you pretty much everything you need to know about operating a successful business in the metro area.

If you have any financial ties to Atlanta-based commerce, you’d be wise to take the failure of the team as a crucial lesson about modern metropolitan economics.

Business failures are always the result of poor management. In the case of the Atlanta Thrashers, the franchise was practically doomed from its inception, as team President Don Waddell vested the franchise’s future in Patrik Stefan and Luke Sellars, two highly-touted prospects that failed to live up to their sky-high hype. In fact, Sellars went on to play just one National Hockey league game in his entire professional career.

Slowly, the Thrashers began to amass standout players – Dany Heatley and Ilya Kovalchuk, most notably – but poor coaching and even poorer managerial decisions kept the franchise from becoming a contender in the league. By 2003, the team had been sold to Atlanta Spirit, LLC, a conglomeration of metro businessmen with little to no experience with the professional hockey industry. After trades galore, the Thrashers posted their first (and only) winning season in 2007.

By 2008, most of that core group had left Atlanta.

Although the double albatross of horrible management and horrible ownership strangled the life out of the team, regional demographics will tell you that even if the team maintained a consistent winning record, the franchise still would have faltered and underperformed financially.

There was a serious lack of planning on behalf of the original Thrashers investment group; not only did they overlook the town’s long history of pro sports apathy, they failed to take into consideration the metro Atlanta areas's largely transplant audience. Even if there were hockey fans in the area, they were more than likely supporters of their own hometown franchises, which made it incredibly difficult to establish a true fan base for the club. Case in point: at a fan demonstration last month, a paltry 200 people showed up at Philips Arena to protest the then-proposed sale of the franchise.

Although the metro Atlanta area is absolutely massive (it’s one of the 10 largest T.V. markets in the United States), the Thrashers executives failed to note the consumer habits of the region. Very few suburbanites desired to travel to downtown Atlanta, where traffic is congested and parking is an utter nightmare. Although metro Atlanta residents have a far higher per capita income than most pro sports markets in the nation, very few of those residents are hardcore fans of non-established, non-regional sports. The Braves and Falcons have proved profitable only under healthy management and consistent on-field production, not to mention the fact that in the suburbs, college football is still considered the only game in town.

The failure of the Thrashers is emblematic of commercial failure in the metro Atlanta area in general. Businesses with poor management seek to expand with little knowledge of the areas they wish to enter. The Thrashers are a solid example of the wrong product being sold to the wrong consumer audience, the equivalent of opening up an air conditioner store in the middle of Alaska. Inept executives not only expedited professional hockey’s failure in metro Atlanta, they pretty much assured it.

The Thrashers were brought to Atlanta as part of a business strategy to “Americanize” the sport of hockey. NHL Commissioner Gary Bettman wanted franchises out of small Canadian markets and tried to create sudden fiscal success in large U.S. markets where the sport was virtually alien to would-be supporters.

Twelve years later, modern economics have proved that particular expansion doctrine wrong, and now, the oversaturated, over-served metro Atlanta area is sans an NHL team while the small (yet thriving) Winnipeg market just purchased our former team.

For metro Atlanta businesses, both established and fledgling, take heed: if pro hockey can’t work in metro Atlanta, what other businesses are destined to fail over the next few years?

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