December 2006 Skating on Solid Ice David Poile’s performance as GM of the Nashville Predators makes him this year’s CEO of the Year By Drew Ruble
Photo by JOhn Schweikert
Forget that his industry is sport—thought of more often for its fantasy appeal than as
a business enterprise—and that his job title is general manager—a moniker more befitting a mall supervisor than a corporate powerbroker—David Poile of the Nashville Predators professional hockey club is a bona fide CEO. And, in fact, Business Tennessee’s top CEO for 2006.
If plans unfold as Poile and the Predators hope (and Poile has largely orchestrated), the Predators’ CEO could soon be doing his industry’s equivalent of successfully launching an IPO, topping $100 per share or selling the business for double its book value. In hockey terms, that would mean hoisting the sport’s championship trophy, the Stanley Cup,
victoriously at center ice of the Gaylord Entertainment Center in downtown Nashville. Reaching that pinnacle would be a business accomplishment recognized around the world—a global conquest by one of Tennessee’s most “public” companies.
Even should Poile come up short in this current season’s quest for Lord Stanley’s Cup, it won’t affect his status as one of the executive elite in Tennessee. Still doubtful? Consider Poile’s job description, job performance and high standing in his industry of choice. By any yardstick, Poile measures up.
While short leashes on sports executives are the norm, Poile has never been out of a top job in 23 years. Only Glen Sather (26 years) of the New York Rangers has a longer consecutive tenure streak in the sport than Poile. And there are currently only 30 such jobs available in the Western Hemisphere.
Such longevity is uncommon. Consider that
Neil Smith, recently hired by the New York Islanders, lasted only 40 days in the GM’s post before being dismissed.
At present, a large percentage of Poile’s contemporaries in the league are not under contract beyond the current season, as team owners wait to see how their chosen CEOs perform under the new constraints of the salary cap. Last year, the first with a cap, a total of 14 coaches and general managers in the league were fired—nearly 25%. This year, the carousel has already begun. A mere seven games into the current season, the Flyers purged themselves of both their head coach and GM.
Poile, meanwhile, though this fact has not been previously reported, has signed a long-term extension with the Predators. (Terms were not disclosed.)
“Know yourself. Know your business. Know your men.”—Lee Iacocca
As the organization’s highest-ranking executive, Poile’s vast responsibilities for owner Craig Leipold’s franchise, valued roughly at $150 million, include all budgetary and
personnel decisions (including contract negotiations with multimillion dollar employees), all “mergers and acquisitions” (a.k.a., trades and player transactions), and oversight of the company’s key subsidiary, the Milwaukee-based Admirals minor league club.
As a talent scout, Poile’s responsibilities extend to Finland, Slovakia, Sweden and Canada, in addition to the United States.
“It’s truly an international game,” says Poile, the man who drafted fan favorite Jordin Tootoo, the first ever NHL player of Inuit descent. “If you’re not there then you’re missing something.”
Global research has been especially important for Poile given that the Predators—a startup business when he came aboard the expansion franchise in 1997—have by necessity been more dependent on the amateur draft to build a team than has its competition in the league. Prior to the recent introduction of a salary cap in the NHL, peer businesses in major markets like New York and Detroit had far greater resources (mainly money from local TV contracts) than the Predators, allowing them the luxury of making up for scouting and drafting mistakes by outspending less mature hockey markets like Nashville on the player free agent market.
The recent introduction of a $44 million salary cap
leveled that uneven playing field. As a consequence, the job of professional hockey franchise GM also became yet more challenging. Already a complex job, the position now requires mastery of the art of “capology,” or piecing together a winning team in such a way that all the right pieces are in place without “busting” the cap on payroll. Amid that new landscape, Poile has put together a team for significantly less than the cap that is considered by industry analysts (read: sports prognosticators) among the league’s best.
“Patience and perseverance are rare commodities in the impatient world of professional sports,” says NHL commissioner Gary Bettman. “In David Poile, the Nashville Predators found the consummate practitioner of each: He had the patience to build through the draft, plus the perseverance to weather the growing pains
that had to be endured, and the result is a burgeoning hockey powerhouse.”
“Our favorite holding period is forever."
—Warren Buffet
That the Predators with their $37.7 million salary (third lowest in the league) are considered Cup contenders is a testament to Poile’s ability to maximize shareholder value. But in fact, Poile has shown the ability to create and maximize shareholder value no matter what cards he has been dealt.
As a new NHL franchise with one of the league’s lowest payrolls, the Predators became the first expansion team in league history to win at least 28 games in each of its first three seasons. By 2003, Poile had built the Predators into a playoff team even though it boasted a mere $23 million in payroll. That squad stood toe to toe with a $78 million payroll Detroit Red Wings franchise before exiting with two home wins from the first round of the playoffs.
“We’re not in the hamburger business.
We’re in show business.”—Ray Kroc
Following a yearlong lockout after that 2003 season, one in which players and owners fixed the league’s economic structure, owner Craig Leipold’s purse strings loosened. Poile has since smartly layered in experienced, higher priced talent like Paul Kariya and Jason Arnott making the Predators more competitive both on the
ice and at the gate.
Having star power on the roster is smart marketing and ends the days when local fans were reluctant to show up at games unless an opposing team’s star was in town. In the words of former Predators president Jack Diller (who hired Poile but is now no longer with the team), “I’ve worked with GMs who have no overall feel for the business. David understands the bigger picture.”
“Luck is the residue of design.”—Branch Rickey
Poile has been quoted stating that Kariya “chose” the Predators while a free agent prior to the 2005 season.
It’s a statement that many have wrongly construed to mean the Predators’ front office lucked in to the signing of Kariya, one of the most exciting and recognized players in the entire sport.
By contrast, players league-wide talk amongst each other and know where good corporate cultures can be found. They also know what teams are up and coming and have a chance to be good. With all things equal financially, they want to be a part of that. It’s a credit to the job Poile has done in Nashville that players like Kariya and Arnott smell a championship brewing in the Music City.
“Willingness to change is a strength, even if it means plunging part of the company into
total confusion for a while.”—Jack Welch
It’s not the first winning culture created by Poile, who got his first job as an NHL GM with the Washington Capitals when he was 33 years old. In the seat just 10 days, he executed one of the biggest trades in that franchise’s history, a multi-player deal that greatly improved Washington’s prowess but sent one of the Capitals’ star players, Ryan Walter, the team captain, to Montreal. Walter also happened to be the favorite player of Capitals owner Abe Polian.
“I didn’t really know Mr. Polian very well at the time. I remember him shouting into the phone, ‘You did what?’” Poile recalls. “I had to hold the phone away from my head. Then he said ‘I hope you know what you’re doing,’ and he hung up.”
Poile didn’t stay in Polian’s doghouse for long. The trade catapulted the Capitals to their first ever playoff appearance, the first of 14 straight under Poile, whose overall record with the Caps ranked in the top five of all franchises during his tenure.
“Don’t be afraid to give up the good
to go for the great.” —John D. Rockefeller
There has perhaps been no more beloved member of the Predators hockey fraternity historically than Scott Walker. And yet this off-season, Poile traded Walker, the interim team captain whom Poile describes as “our heart and soul player,” to Carolina in exchange for a bigger, younger center in Josef Vasicek, who addresses a clear team weakness (lack of size at center).
“Letting go of players is the worst part of the job,” Poile says. “But if you’re not doing anything, if you’re not making changes, you’re not getting any better.”
Worst part though it may be, Poile has a history of making aggressive moves as Predators CEO. Entering the 2003 season, he let go of all of the team’s veteran defensemen (with a combined 1,890 games of NHL experience) opting to go with three first-year defensemen instead. The team went on to win 38 games and make the playoffs for the first time.
Poile also traded away longtime goalie Mike Dunham—at the time the Predators’ marquee player—and handed the awesome responsibility of guarding the franchise’s hopes to goaltender Tomas Vokoun, then a young, unproven player. Vokoun quickly blossomed into an elite goaltender in the league and is today a primary reason Nashville is considered a Stanley Cup candidate.
“Good leaders are open. They go up, down and around their organization to reach people.
They don’t stick to the established channels.”
—Jack Welch
With Walker’s departure, the team recently named defensemen Kimmo Timonen, the franchise’s all-time leading scorer, as team captain. It is a designation made
possible by candlelight discussion.
A few years ago, Poile traveled to Toronto with longtime assistant GM Ray Shero for a player arbitration hearing with Timonen, whose contract had expired.
The two were busily preparing briefs on the 25th floor of a bank building in advance of the hearing when suddenly all the electricity went out in Toronto.
“All of it,” Poile recounts.
With elevators out of use, Poile and Shero descended the 25 floors to the streets below. After walking several blocks back to their hotel, then climbing to their 35th floor room, Poile called Timonen by cell phone to suggest one last attempt at negotiating a contract before heading to arbitration. Timonen agreed and asked Poile and Shero to meet him and his agent at his uptown hotel. Poile and Shero promptly descended 35 floors and began their uptown hike.
Once on location, the four men congregated in the lobby. Evening set in, and the place began getting dark. The group lit a half dozen candles, setting them up around the perimeter of the negotiations.
“You’d have thought we were having a séance,” Poile relates. “Long story short, we came to an agreement and shook hands. Then Ray and I went back out in to the pitch-black dark and headed back to our hotel. There was still some wax left in the candles!”
That contract expires after the curret season. No word yet on what environment Poile may create in an effort to get Timonen’s next deal with the team completed.
“My main job was developing talent.
I was a gardener providing water
and other nourishment.”—Jack Welch
Earlier this year, the Pittsburgh Penguins named Shero the team’s new GM. Shero says he’s already applying a lot of what he learned from Poile, including an emphasis on clear communication with ownership. “Because of that, everything runs smoothly there in Nashville,” Shero relates. “What David has done in building the Predators from an expansion team to now has been textbook.”
Poile calls the experience of mentoring young executive talent by far the most rewarding aspect of his job.
“It’s the only good thing about getting a little older,”
he says. “That’s real job satisfaction. It’s as meaningful as anything I’ve accomplished.”
“You need to learn from those who have
blazed a trail before you.”—Donald Trump
Poile himself studied at the feet of a master hockey CEO—his father, Hall of Famer “Bud” Poile, who served as inaugural GM of the expansion Philadelphia Flyers and Vancouver Canucks.
“If he had to do it over again I think he probably would have done or changed a few things,” Poile says. “I’ve benefited from that perspective.”
In 2001, Hockey Digest named the Poile family name one of the sport’s 10 most influential, alongside hockey brands like Hull, Sutter and Howe. “The Poile approach is to take a cerebral and dignified attitude to the executive suite,” the Digest wrote, “and to always do what is in the best interests of the game, never losing sight of the big picture.”
“You can’t build a reputation on what
you are going to do.”—Henry Ford
As such a fixture in the league, it’s no wonder the league recently chose Poile as one of just nine individuals to study and adopt rule changes intended to add excitement to the game and improve the fan experience. Changes implemented by Poile, which include regular season shootouts to avoid ties, freer passing and bigger offensive zones, have ushered in a new era in NHL hockey.
“To me, hockey was played at its best and finest level ever,” Poile says.
Poile was also instrumental in the league’s adoption of an instant replay rule in 1991. Given those contributions past and present, and the current emergence of the Preds into a Cup contender, it wouldn’t come as a surprise if Poile received accolades from the league for his executive work this season. It wouldn’t be his first recognition. Poile was the first NHL GM to be named NHL“Executive of the Year” by The Sporting News two years in a row (1983 and 1984).
“No great thing is created suddenly.”
—Epictetus
Cementing the Preds as a cultural fixture in Nashville would perhaps be CEO Poile’s greatest accomplishment. But in many ways, Poile has already achieved that goal.
While the Predators may not win a Stanley Cup this year, or the next, Poile has built a team that can compete with the best in the league and should be able to sustain that competitiveness for years to come. By building a cost-efficient, youth-driven, marketable product, Poile has made the Predators a viable business in Nashville. And with every new success, Leipold’s commitment to the Nashville market surely grows deeper and his asset value higher.
But Poile’s influence is more profound than simply padding his owner’s pockets. From an industry perspective, Poile’s role as caretaker of one of the league’s expansion franchises, located in a nontraditional market where growth in the league’s appeal is at stake, has been crucial.
“The Predators, the Nashville hockey community and the National Hockey League are extremely well served by his outstanding efforts,” Bettman says.
This past October, on opening night of the Predators’ season, retired Predator Tom Fitzgerald returned to the rink to drop the ceremonial puck and kick off the season. It was an event heavy with metaphorical implications. Fitzgerald, who played 17 seasons in the NHL, including four with Nashville, was never a great NHL player. But in the early years of the Preds organization, when budgets were smaller and wins harder to come by, Fitzgerald was Nashville’s team’s captain and resident star.
As Fitzgerald dropped the puck on a season where expectations surrounding the team Poile built are at an all-time high, one could argue that the expansion era
has ended and Nashville has turned the corner from “nontraditional market” to true hockey town. A deep playoff run could seal the transformation. And all
indications are that CEO Poile has assembled the parts
to do just that in 2007.
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