Nova Scotia SPECIAL REPORT

A GLOBAL FINANCIAL SERVICES CENTRE

Nova Scotia’s financial services industry boasts over 3,000 domestic and international establishments that employ more than 18,000 people.

Photo by: David Chan

Industry-leading authorities recently recognized Halifax as the fastest-growing hedge fund administration centre in Canada. Nova Scotia’s educated and loyal Scoring position labour pool, proximity to major financial centres in the United States and Europe, If Bobby Smith has his way, loyal Moosehead fans will soon be rewarded with a and competitive operating costs continue to capture the attention of financial championship team. Because what’s good for the game is also good for business. services companies from around the globe. By Stephen Kimber

“So...” The new owner glanced around Bobby, credited his own three years as a ring as a member of the 1986 Montreal the room at the expectant faces of the junior player with transforming him from Canadiens. small group of front office employees he’d “a 17-year-old kid who played hockey into a When he retired in 1993, Smith Learn more about Nova Scotia’s inherited as part of his recent purchase of hockey player, and there’s a big difference.” returned to school (academically gifted, their company. “Who here handles group After breaking Ontario junior hockey his mother had been “disappointed” thriving financial services sector. sales?” league records for assists and points when he originally chose hockey over It was September 2003, and Robert that still stand nearly 35 years later, university) and squeezed four years of David Smith had just acquired 64 per cent Smith had been drafted first overall in undergraduate and graduate business of the Halifax Mooseheads junior hockey 1978 by the NHL’s Minnesota North education into just three years. The day team from Moosehead Breweries for what Stars. Over the course of a 15-year he graduated, the NHL’s Phoenix Coyotes was reported to be more than $3 million. professional career, he played in more hired him as general manager. Four years It seemed an excellent fit. Smith, better than a thousand games, scoring almost later, in 2001, “the owners sold the team Go to www.yournextlocation.ca known to a generation of hockey fans as a point a game and won a Stanley Cup out from under me” and Smith suddenly

Online extras: atlanticbusinessmagazine.com | 15 Smith, better known to a generation of hockey fans as Bobby, credited his own three years as a junior player with transforming him from “a 17-year-old kid who played hockey into a hockey player, and there’s a big difference.”

found himself out of a job. And at loose a child before his civil servant father ends. transferred the family to Ottawa, Which is when he began to “immediately called 4-1-1 and asked reconsider his own passion for junior for the number of the brewery in Saint hockey. Could it also be a good business John. I asked to be put through directly investment? He kicked the tires of an to the president.” Three months later, American team in the Western Hockey Smith had a hockey team to call his own. League, explored the possibilities of an Passion rekindled. But a business? Ontario franchise. Neither turned out Group sales? to be a good fit. Group sales — putting bums from Then one day in the spring of 2003, bowling teams, university engineering as he was finishing up a golf game in classes, boy scout troops and minor Scottsdale, Arizona, he got a call from hockey teams into arena seats every Jeff Hunt, a friend who owned the game, win or lose — is traditionally a Ottawa 67s junior team. Hunt told him critical revenue-building piece in the Moosehead Breweries would announce sales strategy of any sports franchise. the next day it was selling its Halifax But there was, Smith remembers, an junior franchise. Smith should check it uncomfortable silence in the room that out. day. Finally, someone responded. “Well, Smith, who was born in North Sydney um, I answer the phone when anyone and lived briefly on Sable Island as calls.”

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16 | Atlantic Business Magazine | November/December 2012

y the time he bought the team, By the spring of 2004, negotiations the Halifax Mooseheads were for a new contract had bogged down. Balready a Canadian junior hockey At one point, Smith says he suggested phenomenon — in the stands at least. extending the current contract for a year The season before when the Mooseheads while the two sides continued to hammer had come within a game of going to out a better deal. But when Metro Centre the Memorial Cup, the national junior officials coupled their two-word response championships, the team averaged 7,600 — “Not interested” — with a threat to fans a game, second best in the entire 56- start peddling the team’s scheduled team Canadian Hockey League. game dates to other customers, Smith During its first 10 years of operation, decided to play hockey’s version of hard those box office triumphs had helped ball. spawn a new Maritime division within Just weeks before the opening game of the Quebec Major Junior Hockey League, the 2004-05 season, he stunned Metro and the Mooseheads had even hosted the Centre’s operators, not to mention the 2000 Memorial Cup tournament. The team’s fans and the downtown restaurant team’s marketing success not only helped and bar operators who depended on its landlord, the publicly-owned Halifax game-night customers to boost their Metro Centre, finally become profitable own revenues. Smith announced he but it also made it possible for Halifax was moving the Mooseheads from the to land the rights to host the 2003 world modern 10,500-seat Halifax Metro junior hockey championships, the 2004 Centre with its comfortable seating and women’s world hockey tournament and new jumbo Silverscreen scoreboard to the 2007 men’s world championships. the crosstown down-at-its-heels 75-year- As majority owners, Moosehead old 5,500-seat Halifax Forum with its Breweries had done many things right, hardwood bench seating and obstructed including keeping ticket prices down views of the ice surface. Your new lodge is magical indeed. Your so games became popular family Three days later — after the ensuing entertainment. public outcry prompted frantic city But the brewery hadn’t really ever had to officials to step in and take over the face- run the team as a business. “Moosehead,” to-face negotiations — Smith had a deal

Smith says simply, “owned the team to sell he could live with. gift certificates as incentives, White Point 902.423.8887 to order beer.” The details of that 28-page agreement, The big reveal is guaranteed to be a jaw dropper! The view alone is breathtaking, but step on to the spacious newThe view deck alone is breathtaking, is guaranteed to be a jaw dropper! The big reveal and say hello to familiar faces – equally as one of the new toes by beach stone fireplaces, your Warm and soak it all in. Dan his new menu, and Sommelier to ooh and ah over wait for you Chef can’t White Point. happy to be back at at the beach. business as usual here it’s Yes, the warmth of Lodge. is stocked up with vintages – surpassed only by sales gatherings and family retreats. Eve, Year’s busy booking holiday parties, New We’re cottage. (newly got couples, anxious to see their favourite refreshed) We’ve they belong. back where White Pointers got bunnies – delighted to see And we’ve Call next business gathering. her magic on your and let Anne work whitepoint.com Although Smith is the first to admit which has since been renewed, are da! Ta owning a hockey team “is a lot more fun secret. But it’s believed Smith not only than investing in XYZ stock,” buying the got a significantly larger slice of the non- Mooseheads instantly made it his primary hockey revenue his team generated but investment vehicle, and he needed it run also a chunk from the annual rental fees on a business-like basis. for the 44 luxury skyboxes that ring the “One of my first decisions was that we arena. Smith himself won’t talk specifics, needed to hire someone new to handle but he does make the point the boxes group sales.” He was so impressed by two wouldn’t be nearly as attractive without of the applicants — Brian Urquhart, a the Mooseheads’ 40 home games a year. young accountant who would abandon his How profitable is the team? While C.A. studies to join the team, and Travis Smith dismisses recent speculation in Kennedy, fresh out of university — he the local online business publication, hired them both. Today, he says proudly, allnovascotia.com, that the team earned they’re both vice presidents “running the a profit of $700,000 “in its best years” team’s business side on a day-to-day basis.” — “They’re just plucking numbers out of But group sales wasn’t the only, or the air,” Smith says, “and they’re way off” most pressing, issue on Smith’s plate. — he declines to reveal much more. “In He quickly became convinced the team’s some years, we’ve experienced losses, lease with Halifax Metro Centre — the significant losses,” he says. “In other arrangement that set out not only how years, we’ve had some black ink.” much the team had to shell out in rent Though group sales and lease for each of its home games but also agreements may be keys to financial itemized its share of the arena’s take from stability, Smith knows the real ticket to everything from game-day sales of hot real financial success for the Mooseheads

dogs and beer to arena advertising — was is to consistently put a winning team on YOU

“the worst in the entire Canadian Hockey the ice. SEE SOON! League” and “could bankrupt the team” if He thinks he’s finally figured that one it wasn’t fixed. out too. he last season the Mooseheads were recalls, “we lost 16 players. That’s when I office. This year, with the team again a serious contenders for the Quebec made the decision that we were going to legitimate contender for the Memorial Cup, Tleague title was in 2007-08 when take our lumps. We were going to keep our Urquhart wants to convert last year’s walk- team management traded away their best draft picks.” up, check-this-out, one-game customers young talent along with future draft picks For the next three years, “we were one into 15-game package ticket buyers or in order to stack the team with veteran of the worst teams in Canada.” Attendance even season ticket holders. His goal is to stars for a run for the championship. That plummeted from close to its all-time high goose the number of season ticket holders didn’t turn out so well — the team was of 7,600 to just over 5,000 fans a game. by more than 1,000 to 4,000. And keep swept in four games in the semi-final and But then last season, the first bright them in their seats for next season when its star player, Brad Marchand, the future light escaped from the far end of the MacKinnon will very likely have moved on NHL star acquired in one of those trades, tunnel. Thanks to finishing so close to the to the NHL. was benched for the final game. bottom of the standings the year before, the The trick, Smith acknowledges, will “That’s when I decided enough was Mooseheads not only got to select second be to ice a consistent product on the ice. enough,” Smith says today. overall in the annual draft of midget “There will always be a certain amount of Like many junior hockey teams, the players but they’d also stockpiled enough up and down,” he says, “but you don’t have Mooseheads had operated on a boom-bust high draft picks and players of their own to manage boom and bust all the time.” cycle, taking two or three seasons to craft that they were able to trade for the number That said, he also knows that the team’s veteran teams that could — but never quite one pick who turned out to be Nathan loyal, long-suffering fans (the Mooseheads did — win it all, then starting all over again MacKinnon, a hometown 16-year-old have yet to win a league championship in the next season with a cast of no-names already being compared to Sidney Crosby. their 23 year history) want a championship and castoffs. “Before he even stepped on the ice,” team. When Smith bought the Mooseheads Brian Urquhart says, “the excitement level So does Smith. “I can remember the in 2003, in fact, the team was coming off picked up, business picked up.” heartsick feeling I had being eliminated its most successful season on the ice. The Led by MacKinnon and fellow first- from the [junior] playoffs in 1978, thinking next year, Smith’s first, the Mooseheads round draft picks forward Jonathan Drouin I would never have another chance at the finished dead last. and goalie Zachary Fucale, the 2011-12 Memorial Cup.” Up and down, up and down. Mooseheads over-achieved on the ice and And now he does. Business meets After the failed run in 2007-08, Smith — as word of mouth spread — at the box passion. | ABM

18 | Atlantic Business Magazine | November/December 2012