A lot can be said as to why PEAC School for Elite Athletes closed its doors. Many parents have lost their investments altogether wondering if the same could happen again with other schools.
First of all, I do know Robb Nelson, the previous owner of PEAC. He frequents the store and gets his skates sharpened here. I knew when he placed an order for some hockey equipment with us for his school rep team that getting paid might be a problem. As it turns out he did not pick up the hockey equipment; it sat for two weeks before I decided to sell it. However, he still frequents the store.
When Robb Nelson told me he purchased PEAC School for Elite Athletes, the selling price was $1 million. He said goodwill and previous student Connor McDavid were enough for the business to succeed. I told him that elite schools do not make elite athletes, instead there’s an inner ability that encompasses an elite athlete’s body and soul. It is no different than a great economist or mathematician because it asserts the gift that one has to propel them to a level that no one can reach.
He laughed and asked how much I’d be willing to pay for it. I told him considering I had to pay rent, teachers, hydro, and business taxes, that I would pay nothing. He thought I was crazy and told me that the business would take home $400,000 in profit annually. I asked myself why anyone would sell the business if that was the case. I wished him the best success and left it at that.
My other friend Rob Knesaurek once worked very high up at the pharmaceutical company GlaxoSmithKline. He decided to spend more time with his family by getting into hockey instructing at PEAC. He left PEAC when the company was sold to Robb Nelson and decided to start his own hockey school. He became extremely successful with international students from all over the world. He’s now able to spend a great deal of time with his children and wife while nurturing them through the success of his business.
When Rob Knesaurek came over to Toronto Hockey Repair, I asked him if he ever had any intentions of buying PEAC when it was up for sale. He told me that indeed he did. However, after looking over the strategic scope and financial records, he quickly came to the conclusion that it didn’t align with his interests or the benefits of the students themselves.
Obviously the instructors who worked at PEAC were accredited qualified teachers who went through extensive background checks to get the position. Many parents have indicated that the teachers were competent and did care about the students' academic success. I assume that there may have been a polarization between academic success and athletic achievement within PEAC. The revenue may not have come as quickly as predicted, which is why the school had to focus on different sports rather than hockey itself.
Robb Nelson was not in the field of hockey and did not comprehend the amount of money he needed to keep PEAC afloat. Even though he had students paying $30,000, it did not justify the valuation of the company itself. When you buy a company you need a experienced forensic accountant to examine the books. Unfortunately, he found out that the $400,000 annual profit didn’t exist the hard way.
A father with his kid enrolled at PEAC phoned my store and asked me whether or not he should keep his son at the school. I told him, “You do have a choice.” When a father wants to elevate his son’s status in the community of hockey, that’s what happens, the doors get locked. Rob’s failure was based on exuberance and the dream he had for his son. It’s unfortunate that the dreams of many parents also came tumbling down along with PEAC and the high expectations the school came with. The key point is that a few NHL graduates will never automatically fix the administrative aspect of a business to guarantee its success.