Rogers and MLSE; Not About Championships

It's a story that hit the city like a tidal wave this morning.

That Rogers is looking to buy the 66 per cent stake in the Maple Leafs sports empire currently owned by the Ontario Teachers Pension Fund constituted a huge scoop, certainly big enough to drown out water cooler conversation about last night's cruel Leaf loss to the Tampa Bay Lightning.

But then, this is truly a business story more than a sports story. Really, it has nothing to do with wins or losses or championships.

It's about TV. And content. And hand-held wireless.

But not about Stanley Cups or any other trophies, for that matter.

It's a mind-boggling transaction, one that would theoretically put Rogers in charge of the Leafs, Raptors, Blue Jays and Toronto FC, a spectacular and unprecedented concentration of sports properties in North America. Where it would leave Larry Tanenbaum, owner of just under 21 per cent of Maple Leaf Sports and Entertainment, is unclear.

It would be a powerful collective, yet some would also fear such a gigantic sports conglomerate just as Teddy Roosevelt once fought against combines and railroads. Moreover, it's fair to say both Rogers, as owner of the Jays, and MLSE, as owner of the Leafs, Raps and Toronto FC, have more than their share of critics in a city in which none of those teams have won a championship since the early 1990s.

The Jays had a surprisingly good 2010, so maybe fans are feeling better about the ownership of that ball club. Certainly the ascension to power within Rogers of Keith Pelley is a positive sign given the good reviews Pelley received for running the CFL's Toronto Argonauts several years ago.

But then, of course, all of this is a totally different animal.

If Rogers were to be successful in its play for the MLSE sports properties as outlined first today in The Star by reporters Rob Cribb and Tony Van Alphen, the entire dynamic of the Leafs et al would change as the new organization would be built around a media content company, rather than a business increasingly into condominium construction and arena management.

But would sports fans get more? Or would this quasi-monopoly leave the supporters of each team dissatisfied?

Would the Leafs be king? Or would the Jays, Rogers' first love, be at the top of the pyramid?

Rumours of a monster transaction involving the Teachers pension fund's share of MLSE have been percolating on the street for a while now, along with the rumours of Richard Peddie's departure, which came to fruition on Tuesday. Nobody is denying this story, but if MLSE or the Teacher's fund tries to even play it down, it will ring hollow after the Peddie story was reported weeks ago and, after initial denials, proved to be true.

Now that the Rogers play is public knowledge, it could also bring out other bidders, possibly driving the price up.

It certainly adds a new wrinkle to NHL board of governors meetings scheduled for West Palm Beach on Monday, although the league was generally aware that Rogers had interest in MLSE's properties. Already this week, hot rumours about a sale of the Buffalo Sabres hit the headlines, and the NHL is already trying to conclude a sale of the Phoenix Coyotes by the end of the month.

Right now, Dallas and Atlanta are also on the market, so NHL owners will have a boatload of issues to deal with down in Florida next week.

As far as the potential sale of the Leafs and Raptors go, it seems unlikely that falling under the Rogers umbrella would dramatically alter their competitiveness, with both clubs again unlikely to be playoff teams this year. It's not as if some Mark Cuban-like tycoon wants to buy them, with an eye on stroking his ego by basking in the glow of championship success. Moroever, both play in leagues with salary caps, and Rogers has already demonstrated in cap-less Major League Baseball it cannot or will not spend with the big market clubs.

Really, this is a business deal that just happens to involve sports. It's as much about condos and TV programming as it is about pucks and balls.

That said, it could alter the contours of the Toronto sports landscape for years, possibly decades, to come.

 

Comments

[Frank]

Fans should call Rogers customer service and let them know that they will switch to Bell TV if the Blues Jays don't improve, and do same if Rogers buys MLSE.

[Carlos]

Damien, you mention that this information could potentially bring out other bidders. Has Balsillie burned all of his bridges with the Leafs and the NHL, so that they would never sell to him at any price, and the NHL would never accept him as an owner?

[david hyndman]

I am really starting to get sick of Rogers. When is Toronto's name going to be changed to Rogersville?

[croozer]

Of course Rogers wants to take over - who wouldn't want to earn top dollar on a crappy product that local fans are more than happy to buy?

[Paul]

I will feel bad for TSN and the Score

Rogers TV stations will dominate the sports TV landscape

[kneeboard85]

Finally someone has made the point I tell people every time they whine about the Teachers Pension. MLSE runs a business not a team, Rogers would run it very similarly. If I owned the Leafs (I am a die hard fan) aside from appointing myself GM that is where my influence ends, well that and selecting Brian Burke. It is not my job as Owner of the Leafs to fire Ron Wilson, that is a GM job. If people stopped buying tickets what am I gonna do? fire Burke to show everyone how committed I am to the team and how the pressure to put a winner has paid off. Not going to games or watching solves nothing.

[dv]

Teachers have milked this cow for everything the could. Rogers can take it to another level with tv sales. Content in the future is king. IMHO, as a fan, a sale to Rogers is both good and bad. It is bad because they are going to start charging huge dollars for leafs tv and possibly PPV leaf games (as does vancouver now!). However, they are going to want good teams because unlike the ACC always being full, regular people at home are not going to pay $$ to watch a loser on tv.

[The 5th Line Centre]

Very interesting development here, Rogers already has stranglehold on Jays games, I wonder how much it would alter the broadcast structure for the Leafs.
Right now Rogers refuses to broadcast games nationally, like TSN, so a total shift to them may mean no more Leaf games for anyone outside the region.
That way Rogers can demand you pay an extra $200+ to watch games from another city 82 times a year, in theory. More money into their pockets. In other words, no real change from current ownership.

[Dan]

I hate Rogers, they screw us over enough already and yet as polite Canadians we just take it.. They only care about their bottom line and corner every market they are in. The Jays have gone downhill ever since they were purchased by Rogers.. they already control most of the media in this country, it's ridiculous. If this happens I'm done supporting the Leafs and Raps and will move out of this country.

[KD]

Don't even think of Balsillie. The Leafs might be willing to sell to him (after all, they're after the highest bid, not the best owner). But as long as Buttman is still in the picture, his bid would have less chance of NHL approval than the Leafs have of winning The Cup this season.

[Buzz]

Funny, I read everything but the real estate is up
for sale so how is this deal just about condos?

[Aaron]

Doesn't Keith Pelley look like a genius now!

[Leaf shredder / Kid Delicious]

Boy...this is a mess. Going from one conglomerate to another. The Leafs need a private buyer...like the Habs and the Senators and most other NHL teams.
Nothing good will come of this if Rogers get's in.
Mark my words....all Rogers is interested in is their 'business' and Hockey is not their business. Too bad for Leaf fans.

[Krakondack]

Just a question here: What is it about running it as a business that is incompatible with being a sport franchise, and with winning? If they are spending up to the cap, and hiring an expensive management/coaching staff, plus keeping the facilities world-class, what else is missing? What are the businessmen holding back that would help matters?

An answer to this question might help me get past the notion that this is all sour grapes to blame lack of success on owners running it as a business.

[Rick Grace]

Leafs need to be on their own owed by one owner.
They don't need a basketball team or baseball team to make money.
But the baseball and basketball desperately need them.
And if Rogers buys them, hockey would take a back seat to the beloved Blue JAYS.
And if the Jays need that right handed free agent? Well hells bells, lets raise hockey ticket prices!
Hockey fans in Toronto are in for more of the same gouging.
This time from a different owner.
Winning is the least thing Rogers cares about when it comes to hockey.

[robert]

Should we expect an arena access fee if we go see their games?

[Billy Biroux]

If you ask me in a perfect world the two oldest Toronto franchises, the Leafs and Argos, would be in their own partnership. Both being owed by a good Canadian boy like Jim Balsille.
Instead it seems Rogers is trying to squeeze out the Argos.
And we know all they're going to use hockey fans for is to milk their wallets to support the other two failing sports of this sham of a partnership.
Hockey is being destroyed in Tranna by faceless corporations that only see dollar signs.
Makes ya long for the days of Pal Hal.
At least he cared about hockey.

[Green P]

Damien, your comment about the salary cap is an important one. As long as the Leafs spend as much as the salary cap allows, there's not much else an owner can do to get a winning team.

To the commenters: you all talk about fuzzy concepts like faceless corporations and milking the cash cow, but what does that actually mean? MLSE is spending the maximum amount on players that they can. They have a general manager who's regarded as one of the best and they've given him free reign to run the team. They have a big scouting staff and plenty of revenue to keep everything running.

Please somebody tell me, specifically, what would an owner who supposedly cares about winning do differently?

[chris]

Oh please Billy. Do you even remember the bad old days of Harold Ballard? He didn't care about the Leafs or hockey. He just used them to pimp his massive ego. And the hockey fans have been paying for it since.

[Johnnyk]

Grey suits out, blue suits in. No Cup in sight.

[Drew M]

Um...how many "championships" has Mark Cuban won? ZERO. Who would argue that egoistical owners like Al Davis and Jerry Jones has caused their teams a chance to compete? ZERO. Be careful for what you wish for.

Teacher's Pension never made the Leafs operate on a shoe string budget and prior to the cap, allowed them to spend as much as they wanted. Raptors could have had a pretty good run if bad luck didn't soil the franchise (if T-Mac didn't hate the cold and stayed, it would have been very different fate).

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[mark]

Don't know what effect if any this would have on wins/losses... but I gaurantee the price for fans to watch (TV or otherwise) will go up. Less games on CBC mean more games on Leafs/Raptor TV or SN1. Rogers will manage content to drive people to their services and increase their revenues. That is the only certainty of this crappy deal.

[Mike Higgins]

hate to get political but i do think this is relevant and I would like to hear Damien's view: i think it's part of bigger trend i see everywhere: a small number of huge corporations gobbling up other interests, becoming more powerful (see how many other outlets are part of the Rogers family---look at their site). Pro sports is only one small example of how this is affecting our lifestyle: they buy franchises and hike ticket prices and (most importantly) install private boxes for other corporations, and then ask governments for handouts or tax breaks to help subsidize the whole thing. Only governments, potentially at least, can do something about the centralization of power but as we continue to elect the Fords and Harpers and others beholden to the business elite nothing will change, it'll only get worse, (and i used to be a Conservative!)

[Ports]

The issue with the Leafs are many and deep rooted:

1. The curse of Stafford and Harold (one an alcohlic, the other a buffoon) who used the franchise as a personal piggy bank, abused the fans, and made a once proud franchise the laughing stock of the league.
2. A rich franchise that is too focused on the bottom line and other activities to compete against the more hockey oriented teams that need to win to survive.
3. A city that supports a team that doesn't reward their loyalty.
4. A team and city that over values their team's mediocre talent. (i.e. Tomas Kaberle who may be one of the worst top four defenseman in his own zone. Why can't they trade him - because nobody wants him.)
5. A GM who came in with a lot of fanfair but thought he was the show, made a lot of bold pronouncements about the ways his teams operate/play and has totally under delivered on these promises.
6. Started a rebuilding program and traded away top draft picks for a one dimensional player. We finally hit bottom as many of the top teams in the league had to do before rising to the top, and we don't have our first round picks - good strategy there.
7. Sign mediocre players for top dollar because the best players don't want to play here.
8. Fans at the games who would rather eat Suchi during games than sit in their seats and cheer.

I've been watching this team since the early 60's, and if anyone thinks we're heading in the right direction, they're kidding themselves. This team/organization/city is complacent, I'm glad I live in Phoenix now where they actually have to win to survive and have done what it takes to compete for years to come.

I'll always bleed Blue and White, but bleed it will be for there will be no parades down Bay St. until the culture is changed.