BOCA RATON, Fla. -- The Winnipeg Jets are a topic of conversation for lots of hockey fans and residents of our city but for team co-owner Mark Chipman, they have become a job and a legacy.

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BOCA RATON, Fla. -- The Winnipeg Jets are a topic of conversation for lots of hockey fans and residents of our city but for team co-owner Mark Chipman, they have become a job and a legacy.

Chipman now spends most of his working hours overseeing the business operation of the Jets. What was for a long time just a niggling impulse in the back of his mind is now currently the main focus in his windshield.

How the Jets play on the ice and operate financially are ultimately Chipman's responsibility. His focus and his vision has been to operate the club in a fiscally responsible manner while still trying to achieve success on the ice. To that end, the Jets operate on a budget handed down from Chipman to GM Kevin Cheveldayoff.

The oft-discussed draft, develop and retain model comes from Chipman's vision for how the Jets will operate as a company. The Jets are not a charity and Chipman's billionaire partner, David Thomson, isn't a sugar daddy. The business plan calls for the Jets to turn a profit and plow proceeds back into the organization for facility improvements and long-term stability.

So far, gleaned from anecdotal evidence such as the millions of dollars the organization has been spending on upgrading the MTS Centre, it's been, so far, so good.

The largest complaint from the fans has been the lack of success on the ice, but now in season four the Jets find themselves still in a playoff spot as Christmas approaches. Is the plan, both on and off the ice, taking hold? Chipman believes it is.

Scheduling conflicts prevented Chipman from travelling to the NHL's board of governors meetings but he agreed to set aside 30 minutes Tuesday morning for a telephone call and to answer a broad spectrum of questions on the operation of his business.

 

Free Press: Commissioner Gary Bettman's preliminary prediction is that the salary cap will rise to $73 million for next year and the floor to around $54 million. What do those numbers say to you?

MARK CHIPMAN: The league is growing as we expected it would. Revenues continue to grow and that's what we expected the league to do.

FP: You're able to spend more money on salaries next year? You're fine with this increase?

MC: Yes, we're fine. It all turns on a number of factors, not just the cap itself. It's the ceiling, it's the mechanism within the collective agreement including cost for distribution and escrow and all things that work together that establishes where we can land in terms of our player payroll. But nothing's changed. Just because the cap goes up, it's not just a singular metric that determines our salary structure. There are other factors. The whole system shifts and we're comfortable with that.

FP: The Canadian dollar has been in a state of flux and has dropped to around 88 cents against the U.S. dollar. Does this affect your business?

MC: It does, but not to the extent that people might think. Although we pay our salaries in U.S dollars, we also earn a significant amount of U.S revenue (broadcast, cost redistribution). There's an offset of U.S dollars coming in and there's a nature of the way the system works. You calculate everything in U.S dollars. For purposes of cost redistribution, you correct the U.S dollars. To the extent that foreign exchange takes a negative turn, our revenues are reduced on a notional basis, across the league and not just Winnipeg. So in our case, in Winnipeg, which wouldn't necessarily occur in every Canadian market, but where we fall in, there is a mitigation of the Canadian dollar decline. There's not nearly as much risk as you would think. It's not dollar for dollar risk. And on top of that, we hedge. We've been able to manage the currency fluctuation.

FP: Expansion to Las Vegas is being looked at and the league is open to a ticket drive to test the market. The last ticket drive that took place was in Winnipeg. What are your thoughts on Vegas?

MC: They're taking the temperature of the market there and that's all I know. It's not an expansion, it's a process underway. Merely a step to see if there is a real interest. I'm not surprised because back in 2007 when we were first invited to make a presentation on the viability of Winnipeg as a market, there were other cities there and Las Vegas was one of them. It's been a market that has been out on the periphery for a long time. I understand now that there's a credible potential owner and they're going to take a step with this gentleman to see if there's a legitimate interest in that market.

FP: Some say the honeymoon in Winnipeg is over. Have your ticket sales or corporate sponsorship indicated this in any way?

MC: No. Our corporate sponsorship is still at a level that exceeded our initial expectations. They continued to renew when their agreements came to maturity. There have been a couple national sponsors that pulled out of hockey, which affected us. But we've been able to replace those commitments with others.

In regards to ticket sales, we've renewed 97 per cent off our first renewal tranche last spring and we've got another renewal group coming forward this spring and we're confident that they will similarly respond. We've been able to maintain a strong interest on our wait list. There have been some games where there have been a handful of tickets that have been available on the day of the game. We only have about 300 tickets we can sell. I'm sort of uncomfortable with the term honeymoon. Honeymoon is a short period of time and we're well into this now. The honeymoon would have expired well before three years. We're well into it and we're becoming well entrenched. We remind ourselves how fortunate we are to have the sport in our market.

FP: No one knew what Winnipeg was going to be like as a market. Is Winnipeg a long-term viable NHL market in your view?

MC: Absolutely it is. We didn't know exactly how it was going to play out in the beginning but we had a pretty good sense. We were comfortable that there was a real demand for NHL hockey in Winnipeg. Did we expect to have a wait list of many thousand people on it? No.

That's been our reality since day one and it has sustained itself. What gives me confidence that it will work long-term is that we have a very solid collective agreement with the players, that has the mechanisms inside of it to ensure a market like ours can not only hang around and survive but can be extremely competitive and potentially achieve the ultimate goal.

FP: Are you comfortable with the approach your GM (Kevin Cheveldayoff) has taken? You were as involved in how your plan was going to be structured from the beginning as anyone else was, were you not?

MC: Yes. When I first spoke to Kevin on the phone of the possibility of him leading our team, I made it clear to him that it wasn't my expectation for him to come in Year 1 and start buying a team through free agency. In fact, that was the second phone call. The first phone call was, "would you be interested?" After I hung up the phone, I didn't think I'd made that point clear. So I called back and said, "By the way, Kev, while you're thinking about this, I don't expect you to come in here like some sort of gunslinger and instantly produce a championship hockey team." Craig Heisinger and I had been around the development of pro hockey players for 10 years, right? We were (able) to form some opinions on how long-term success is best achieved. Kevin was not relieved but comfortable that was the approach we wanted to take. We had a team with some good players on it but we needed to build around them.

FP: You have a hockey team that is in playoff position right now. How exciting is that for the people inside the organization?

MC: I think we have our feet on the ground. Our organization is pleased for the result thus far. But at the same time we have a long way to go. We have recently been hit with the injury bug, and we're dealing with that. I look not so much of where we are in the standings, but how we're playing. That's what I find gratifying. The fact that we're in games. I'm trying to think of the last time we weren't in a game going into the third period. That is the benchmark right now -- are we in these games, and if we continue to be throughout the remainder of the season, we will find ourselves in a good spot.

FP: When you look at the Jets as a business (all aspects and resources) is it gaining strength and is it going to get to a place where it's going to be more than just a young business and one that is able to contend?

MC: I really do, yes. I really like the direction in which the league has gone. I think our timing of getting back into the league has been good. We've caught the game on the rise. We were part of that. We have the capacity to compete and have an exciting product that fans can enjoy. I'm excited about the prospects of being in this league, and I like our model of draft and develop inside the greater model. That's it. It's a work in progress, trying to get better each day and each year.

FP: You say you like your model. Do you like the execution of your model and do you think your GM is doing a good job?

MC: Our model fits our market and I think our GM is doing a fantastic job.

 

gary.lawless@freepress.mb.ca Twitter: @garylawless