League reacts to parents' complaints

While National Hockey League owners and players battled last season over revenue-sharing, the Greater Toronto Hockey League (GTHL), one of the world's largest amateur leagues, struggled with its own financial dilemma - profit-making in kids' hockey.

During the 2004-2005 season, the GTHL faced a public outcry from parents complaining about the high cost of registering their children for clubs controlled by Toronto businessman Stuart Hyman.

Since the late 1990s, Hyman, who is a real estate broker, had acquired control of 10 minor hockey organizations and about 80 teams.

Fees for some of the 8,500 players registered in the GTHL's elite leagues, mainly for clubs that were operated by Hyman, had increased by 30 to 40 per cent. The annual fees in the elite leagues ranged from $750 to $1,600 per player.

In March, the GTHL approved bylaw and regulation changes, including a requirement that all clubs be registered as not-for-profit. The GTHL has a total of about 40,000 registered players, the majority of whom are recreational house-league players and not affected by the cost increases.

The not-for-profit requirement will accelerate Canada's decline as a hockey nation, Hyman says.

"Canada has been falling behind in producing talented players," he says. "We're competing against the U.S. hockey development system. In cities like New York, it can cost $10,000 a season to play and teams get professional coaches and trainers. I tried to adopt the American business model to Canadian minor league hockey."

He says the lack of proper coaching in minor hockey has resulted in fewer Canadian players being taken in the NHL draft. Canadian players used to make up almost 100 per cent of the NHL draft, but now represent only about 30 per cent, he adds.

"Minor hockey should be run like a business so players can get better training and coaching," Hyman says. "We charged more because players were getting more. We had paid coaches and trainers. Players in my clubs get scholarships to colleges.

"Under the current system of the GTHL, some clubs can hardly pay for the cost of ice," he says. "They operate like a mom-and-pop store. One of the clubs hadn't paid its bill for a year. They were going to be shut down."

The public debate centred on the difference in player fees between clubs and teams involved with Hyman and those that were not.

"They wanted to know how their money was being spent," says GTHL president John Gardner. "Some parents might pay $800 to $1,200 at the start of the season, then halfway through the season they are asked for another $500. The concentration of club ownership was a concern."

During discussions between Hyman and the GTHL over club ownership, Toronto city council voted to examine whether some clubs were charging players more for ice time than they were paying the city. Renting ice time is the biggest expense for a team.

"Some teams have to pay twice as much as others for practice ice. There is no clear-cut formula. There is no standard price for ice," Gardner says.

Gardner dismissed claims that minor hockey has been turning into a profit-making centre. "There might be a small minority of clubs which were in for a profit. That is why we are now requiring clubs to register as not for profit."

A 2004 GTHL bylaw required control of clubs to be restricted to no more than one hockey organization in each of the three elite tiers. Hyman acquired his group of teams before the league passed the new bylaw. He now operates only four clubs.

"I'm stuck," he says. "I can't expand and I can't move into any other leagues. From a business point of view, it doesn't make sense to invest in minor league hockey because you're going to lose money. Running a hockey club in Canada under the current circumstances, you're lucky to break even," Hyman says.

"You don't make money in minor-league hockey in Canada by organizing teams and paying for professional coaches and trainers," Hyman says. "Money is made in arenas and by equipment manufacturers."

Hyman says player fees for his teams were below what parents pay for coaching and training for their children in other sports such as swimming, tennis or golf.

"If your child is an elite swimmer, you pay thousands of dollars for qualified coaches," he says, and adds: "If players in my clubs couldn't afford the program, they were not charged."

Hyman says some of his elite teams charged players $750, among the lowest fees in the league.

Chris Chard, a professor in the department of sports management at Brock University in St. Catharines, says it is not clear why making money in kids' hockey is an issue.

"Profit-making in amateur sports seems to be an issue in Canada unlike in the United States," says Chard, who played hockey in Europe.

He adds that amateur sports at the post-secondary level in the U.S. operate as profitable businesses and that football and basketball finance other programs.

"But, feelings get particularly strong when our national sport is involved," he says. "It's a culture difference."

Parents may feel they don't want their children involved in what has essentially been a not-for-profit volunteer sport, Chard says. "But there is nothing inherent in children's sports that precludes someone from making money."

"Hockey has become a lot heavier load to run than it was 10 to 20 years ago," the GTHL's Gardner says. "Most of the big clubs have full-time paid staff because it is difficult to find enough volunteers."

"If parents have choices about where their children can play and it isn't limited only to people who can pay the higher costs, there shouldn't be a problem with someone making money in children's activities," Brock's Chard says. "Walt Disney did."

(Charles Wyatt can be reached at wyatt@businessedge.ca)