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Pegula Sports Entertainment, behind the scenes

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I was tempted to start this with something more negative but I will let others make that decision. All I can say is that the PSE we see publicly is clearly not the PSE that really exists. I have fewer questions about recent decision from ROR all the way to the in game presentation and completely vanilla marketing. 

https://theathletic.com/1758235/2020/04/20/as-pegulas-face-business-challenges-employees-describe-a-toxic-culture-at-pse/

Quote

Last January....

"Over the course of a few days, Pegula addressed various departments via video conference from the family’s home office in Boca Raton, Fla. She explained raises and bonuses should not be expected aside for those, such as coaches and players, contracted to receive them. Budgets would be scrutinized.

Times ahead were going to be difficult, Pegula stressed, and sacrifices must be made. The tone underscored worries that had been circulating among workers at various Pegula Sports and Entertainment properties. They already feared Terry and Kim Pegula were eyeing additional cutbacks to right-size a sports, media and hospitality empire that expanded too rapidly.

Kim Pegula’s video presentation included a rundown of organizational objectives. One particular slide, titled “Pegula Family Goals,” shook executives and lower-level employees alike. A handout version of the slide, obtained and verified by The Athletic, listed the Pegulas’ three chief objectives: win championships, sustainability, return on investment.

Pegula, current and former employees say, explained that return on investment included maintaining the family’s lifestyle."

 

I encourage you all to read the full piece at the athletic. 

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You know how we have been really confused... I am 100% less confused now. This organization is a mess. I don't expect the Sabres to win a playoff round anytime soon. 

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All I have to say is that a lot of the signs of dysfunction that many identified here years ago (especially the stuff @josie heard/suspected about the way PSE was operating) are pretty much laid bare in this article.

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Tim Graham took submissions from current and former PSE Employees and also had questions answered via email from Kim Pegula here are some excerpts from the Article

Kim Pegula’s video presentation included a rundown of organizational objectives. One particular slide, titled “Pegula Family Goals,” shook executives and lower-level employees alike. A handout version of the slide, obtained and verified by The Athletic, listed the Pegulas’ three chief objectives: win championships, sustainability, return on investment.

Pegula, current and former employees say, explained that return on investment included maintaining the family’s lifestyle.

“People were walking out of those meetings like they’d been punched in the gut,” a Bills management source said. “We just made the playoffs in the NFL, where it’s impossible to lose money. We’re firing on all cylinders. Now we have to pinch pennies?

“The morale after those meetings was lower than the day Ralph Wilson died.”

Spirits within PSE’s other properties were depressed before that. The Buffalo Sabres have been among the NHL’s worst clubs for nearly a decade, missing the playoffs nine straight seasons (presuming the 2019-20 regular season standings hold true)while employing six head coaches in that time. A source with knowledge of the numbers said the Sabres have been losing between $40 million and $60 million the past few seasons.

 

The Athletic interviewed 39 current and former full-time employees by telephone, text and verified direct message. All have worked for PSE, the Bills or the Sabres within the past 14 months. All but five were on the staff directory within the 2019 Bills or 2019-20 Sabres media guide. Their names are being withheld because of their concerns over reprisal.

“Toxic culture” was the most repeated phrase from those interviewed. They detailed being overworked because of continual downsizing while dealing with chain-of-command breakdowns, poor communication flow and interdepartmental disorder.

The most common observations made from the perspective of those interviewed:

The Pegulas’ resources and attention are stretched too thin by businesses not related to the core mission of winning games.

There is a lack of faith in the shrunken executive leadership team: executive vice presidents Gregg Brandon (legal), Frank Cravotta (creative), Chuck LaMattina (finance), Mark Preisler (media and content) and Ron Raccuia (licensing and brand merchandise).

High job turnover is coupled with little explanation for it.

Family and close friends receive positions of growing influence or are allowed pet projects.

Employees conveyed support and sympathy for their coworkers along with resentment that upper management takes their efforts for granted. 

A pandemic is not the sole reason the Pegulas have dismissed so many people.

Furloughs and salary reductions for top executives are one thing. But those who have been fired would have been gone regardless of COVID-19.

Kim Pegula said as much Tuesday in an email to the remaining employees.

“Layoffs are always difficult and not something we take lightly,” Kim wrote in the internal email. “Over the last year, Terry and I have been analyzing all levels of our businesses to truly understand their viability and sustainability. We have slowly been making changes over the last several months, and feel it’s necessary to continue with planned moves based upon the conclusion of the scheduled Sabres season.

“We thank and acknowledge these people for the work and contributions they made to the organization and wish them well. We are providing severance, knowing that this is not the best time to announce these changes.”

But word circulated swiftly through PSE, Bills and Sabres offices that three vice presidents among the 21 firings would receive only two weeks of health insurance.

Among those let go: vice president of tickets and service John Sinclair, vice president of live events Jennifer Van Rysdam and vice president of media relations Chris Bandura. They combined for 72 years of Sabres service.

Seymour Knox IV, son and nephew of the Sabres’ co-founders, posted The Athletic’s article about the firings on his Facebook page. He added the message: “A very sad day in Sabreland.”

In the comments underneath, recognizable names lashed out at the Pegulas.

Former Sabres minority owner and president Larry Quinn called the moves “baffling,” said Kim Pegula was “making a horrendous mistake” and blamed “sneaks (who are) hiding and assassinating good people.”

A source confirmed Bonny Seiling, wife of French Connection right wing Rene Robert, called Thursday to cancel her family’s season tickets, as she stated under Knox’s post. Sabres Hall of Fame goaltender Don Edwards called Sinclair’s dismissal “very disheartening. … Despite the current pandemic, looking optimistically ahead to when it ends, common sense, loyalty and appreciation for someone’s many years of devotion and dedication is the strength of any organization.”

The ousted Sabres vice presidents did receive severance pay, unlike Wheat. After 20 seasons with the Bills, he was informed the day before his contract expired in February that he would not be renewed.

Two sources said Wheat was resistant to PSE synergies and fought to keep the Bills an isolated organization, that he didn’t want the problems at PSE or the Sabres to be felt in Orchard Park.

“We have invested almost all profits back into the Bills,” Kim Pegula wrote. “We have renovated locker rooms, training areas, clubs, suites, our cafeteria, scouting room and most recently funded a new sports-training center along with all the normal capital expenditures needed for an almost 50-year-old stadium.

“With the pandemic and the uncertainty of sports in the near future, we instituted a hiring freeze, freeze on raises and bonuses as well as reassessing discretionary spending. We, along with many other teams, put into place these same guidelines so that we could plan for uncertain times.”
 

A league source took note of that proclamation, saying “That’s the Pegulas sending a message to their NFL peers that theirother business decisions are not impacting their competitiveness. Roger Goodell pays attention to things like that.” No NFL team has announced cutbacks due to the pandemic.

“The culture is legitimate,” a Bills source said. “Whatever’s going on with the Sabres, I don’t care. That’s their problem. Their ***** better not affect what we built.”

In response to a question about their plans with their struggling hockey club, Kim Pegula said, “We are not looking at selling the Sabres. We are looking at the best way to operate the club so that it’s viable and sustainable.” 

She conceded future stadium and arena costs — newly built or renovated — already have been incorporated into their business decisions.

As the NFL’s second-smallest market, every dollar will count. The outlook for state and county tax dollars has darkened during the pandemic.

“We are trying to correct our mistakes and the mistakes of others with the goal in mind that we need to be better in many areas to not only survive but to thrive,” Kim Pegula concluded in her email to The Athletic.

 

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The quote we are looking for ways to operate the Sabres so they are viable and sustainable is concerning to me 

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The article certainly doesn't paint a pretty picture.  It sounds like there are a lot of employees who don't like or trust the Pegulas, and that the Pegulas feel the same way about a lot of the people they've let go.

A few more nuggets:

 

Quote

A source with knowledge of the numbers said the Sabres have been losing between $40 million and $60 million the past few seasons.

 

Quote

 

The Bills, though, essentially had been insulated from the PSE melancholy until January.

Two sources close to Bills head coach Sean McDermott say the January meetings left him concerned about low morale eroding the culture he and general manager Brandon Beane have cultivated over the past three years with a meticulous, holistic attitude.

 

 

Quote

 

The Athletic interviewed 39 current and former full-time employees by telephone, text and verified direct message. All have worked for PSE, the Bills or the Sabres within the past 14 months. All but five were on the staff directory within the 2019 Bills or 2019-20 Sabres media guide. Their names are being withheld because of their concerns over reprisal.

“Toxic culture” was the most repeated phrase from those interviewed.

 

 

Quote

 

Upheaval within the Pegulas’ inner circle began when managing partner and president Russ Brandon resigned in May 2018 after an internal investigation into inappropriate sexual relationships and workplace misconduct. Two trusted HarborCenter executives, Michael Gilbert and Nik Fattey, resigned in January 2019 after an internal investigation into sexual harassment claims.

Three PSE executive vice presidents exited in February 2019: chief operating officer Bruce Popko, chief administrative officer Brent Rossi and head of business development Erica Muhleman. No reasons for the moves were revealed.

“We kept people in leadership roles because we trusted them to have our interests and the interest of the teams as their number one priority,” Kim Pegula wrote. “We were wrong.

“We fully admit we put trust in some of the wrong people and made decisions based on information that was given to us by them. It’s our fault. … We allowed them more leeway than clearly they deserved. We kept them too long, and we’ve paid the price. It’s a lesson I’ve learned over the last couple of years.”

 

 

Quote

 

“The culture is legitimate,” a Bills source said. “Whatever’s going on with the Sabres, I don’t care. That’s their problem. Their ***** better not affect what we built.”

In response to a question about their plans with their struggling hockey club, Kim Pegula said, “We are not looking at selling the Sabres. We are looking at the best way to operate the club so that it’s viable and sustainable.” 

 

 

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The Sabres are a mess and I am starting to understand why. Clearly they are not a priority and are operating with contraints. I find it interesting a Bills employee made it a point to say they didn't want the Sabres "s#hit" impacting what the Bills had built. 

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I guess I'll say one more thing, which is that no matter what the Pegulas do they always come off as wildly incompetent. Imagine being Kim Pegula and saying "we trusted the wrong people", and having "the wrong people" be like..half your business management people? Across multiple entities in your "portfolio".

How does that happen? How do you fail to set up a logical organizational structure? Don't they teach this sh*t in business school? Isn't this stuff "being a job creator 101"?

I bet you could pick 5 people from this forum, give them total control over the Pegula empire, and it would work out fine.

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Thanks for posting this. What a mess. This fits perfectly with what people I know that work at PSE have been saying. Toxic and dysfunctional.

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As negative as this appears could there be the silver lining that their hiring practices have been bad and failed and they have seen the light? Let's hope so. What is surprising is the difference between the Bills and Sabres outwardly as far as results. My impression has been Terry was more into hockey than football. Frankly, I've lost a lot of interest in Buffalo sports. I find this forum more entertaining than the teams.?

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4 minutes ago, Radar said:

As negative as this appears could there be the silver lining that their hiring practices have been bad and failed and they have seen the light? Let's hope so. What is surprising is the difference between the Bills and Sabres outwardly as far as results. My impression has been Terry was more into hockey than football. Frankly, I've lost a lot of interest in Buffalo sports. I find this forum more entertaining than the teams.?

I dunno, their only response to getting grifted by the people they hired was to go out and hire their friends and family members. That's not better, that's worse! That's saying "we can't pick the right people from a vast talent pool, so we're just picking people we know." 

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Toxic culture. Nepotism. Overreaching. Audacious to the point of failure. Bloated. Run by committee. Doomed for mediocrity.

Why hire talent when you can hire relations? Because that always works out. 

I'm talking about my first job. And my current. And this. Why is this so prevalent? Oh yeah, because empathy and hard decisions are difficult and not within practice for many people. Because it's easier to recite corporate slogans than it is to practice humanity. Because that "vacation in Tahiti" is possible if you just squeeze a couple more lemons a liiiittle harder- there'll always be more for your unlimited lemonade. 

 

Sorry, I'm just tired of working for/seeing others work for companies where we all have 1-2 side jobs/parttimes in addition to the 8 hour full time and still can't afford a house but the bosses really want that new beach house to supplement their old one. Tale as old as time, I guess. 

If you need me, I'll be relaxing in quarantine on my superyacht*

*pool floatie in a kiddie pool drinking a genny kolsch 

 

But hey
Knowing is half the battle. This *****'s in the light now. We've all felt it. We've all had a squirmy sensation. Now it's out there, and maybe something can be done about it. Or at least we can all gnash our teeth and direct our frustrations through our keyboards, our wit as sharp as guillotines. 

 

Edit: one of my aerial students' father's is in the org. Lower rung, but been there awhile. I got excited, oh that's so cool, the mother got this uneasy look on her face and said "well, it's tough. it's a tough place to be. but yeah yeah it's totally cool". I told her I'd gotten a phone interview with them back in the day and she said she was kinda glad it didn't work out for me. I thought of her when I saw this quote: 

"I used to feel proud to tell people I worked for PSE," said a current employee. "Then there was a point I just had to force a smile when talking about my job. Now, when people ask me about openings, I tell them not to apply."

Edited by josie

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12 minutes ago, josie said:

But hey

Knowing is half the battle. This *****'s in the light now. We've all felt it. We've all had a squirmy sensation. Now it's out there, and maybe something can be done about it. Or at least we can all gnash our teeth and direct our frustrations through our keyboards, our wit as sharp as guillotines.

I was thinking the same thing -- maybe this embarrasses them enough so that they prioritize bringing in good people to run things.

 

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Tbh, seems like the source had some sort of vendetta for the organization. I personally would take this article with a grain of salt

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1 minute ago, Theana745 said:

Tbh, seems like the source had some sort of vendetta for the organization. I personally would take this article with a grain of salt

Vogl was a dutiful lapdog for them as recently as a year and a half ago, the way he ran with the ROR stuff was disgusting. If he's turned on them, there's probably a reason for it 

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5 minutes ago, nfreeman said:

I was thinking the same thing -- maybe this embarrasses them enough so that they prioritize bringing in good people to run things.

 

I don't know, they've publicly announced that they've made the classic pivot to hiring "people they trust" which is just another way of saying they can't or don't know how to find good people. Turning inward doesn't feel promising, it's what you do when you're paranoid.

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"Kim Pegula has taken on the role of president for all five of PSE’s teams and with an inner circle that has gotten smaller and less experienced over the past two years."

I find this chilling. No person could be president of five large entities and serve any of them well.

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1 minute ago, Don Dokken said:

"Kim Pegula has taken on the role of president for all five of PSE’s teams and with an inner circle that has gotten smaller and less experienced over the past two years."

I find this chilling. No person could be president of five large entities and serve any of them well.

Unless she's pulling 500 hour weeks 

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Cheeses.  One good owner in all these years.  We knew we had it pretty good.  We never knew how good.  Thank you Knoxes for being what this community always deserved.

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12 minutes ago, Randall Flagg said:

Vogl was a dutiful lapdog for them as recently as a year and a half ago, the way he ran with the ROR stuff was disgusting. If he's turned on them, there's probably a reason for it 

Things are different now. Less stories now, less league action. Someone in the pegulla organization could easily be mad about COVID and the current state of affairs in regards to wealth in the country, hence deciding to come forward. Again not saying that as the definitive truth, but something we all need to consider when analyzing this news piece 

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This all reinforcers the worry I posted awhile back: Pegula's won't keep taking on dead money and will therefore keep Botterill

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