Connect with us
[bsa_pro_ad_space id=12]

Bruce Dowbiggin

Celebrity Owners– Fun, Yes, But The Equity Is Even Better

Published

11 minute read

In case you hadn’t noticed. Celebrity Sports Ownership is all the rage. When the Ottawa Senators were for sale Ryan Reynolds, Snoop and The Weeknd were all mentioned among the bidders (that eventually went to Montreal businessman Michael Andlauer). LeBron James now holds a minority position with Liverpool FC.

Jay-Z owns part of the Brooklyn Nets, Usher a piece of the Cleveland Cavaliers while Fergie of Black Eyed Peas fame also partly owns the Miami Dolphins. Gloria and Emilio Estefan, Marc Anthony, and tennis superstars Serena and Venus Williams are owners of pro sports teams. Famously, Elton John owned Watford FC, although he’s now just an honorary chairman.

And, of course, Reynolds and Rob McElhenney used a documentary TV series that showed their Welsh Wrexham soccer team promoted to the FA’s League Two. What’s the attraction?

Clearly a little PR is always a good thing. But sports team ownership has also become a lucrative equity play. As BMO reports, “The average compound annual growth rate since the last purchase price…  is 15 percent, a meaningful outperformance to the TSX and S&P.  Forbes estimates the Toronto Blue Jays are currently worth US$2.1 billion or roughly C$2.85 billion.

Based on recent sports franchise transactions, expansion fees and annual estimations of franchise values by Forbes Magazine, an $8 billion enterprise value is easily defendable for the Jays’ owners MLSE (who also own the Maple Leafs, Toronto FC and Argonauts).”

It’s the same across the major pro sports leagues. The estimated average franchise value in the NFL since 2013 is $5.1B with a compound annual growth rate (CAGR) of 16 percent; in the NBA it is $2.9B with a CAGR of 18 percent. For MLB it is $2.3B with a CAGR of 12 percent; the NHL is $1.0B with a CAGR of 11 percent; while MLS is $0.6B with a CAGR 21%.

But, BMO cautions, owning a sports franchise is considered “an equity investment strategy rather than a cash flow or income play.” In other words, don’t think that ticket sales and hot dogs are going to make you rich. (Although the NHL’s salary cap, which guarantees owners’ profits is a sweet deal.) The key is sports media which is thriving despite the move to cord cutting..

Sports media rights contracts have grown in tandem with franchise valuations. Not to be ignored in the advertising growth and viewer interaction is the bear knowns as legalized sports betting. Betting companies are flooding the airwaves with commercials while bettors tune in to watch how their selections work out. The casinos and online shops have replaced lower-paying traditional advertisers who’ve dropped off.

In Canada, league or team ownership of broadcast properties is still common. For that reason the real value of those broadcast rights is often opaque. (We had some irritated pushback from Rogers and Bell for writing on this tidy arrangement in the mid 2010s, forcing some limited disclosures). Rogers Sportsnet and TSN own (via MLSE) own a stable of teams in MLB, NHL, CFL and MLS. Good luck finding out what they pay themselves for media rights.

It’s more open in the U.S. Since the New York Yankees pioneered the YES network in 2002— sparking multiple imitators in other markets—the move in the U.S. has been away from outright ownerships of regional sports networks. A number of RSNs in the U.S. are either in bankruptcy or nearing it. Digital and network sources are now absorbing these sources. ESPN, via its owner Disney, is looking to find partners for its many broadcast properties as their bottom line in general has suffered.

Still, ESPN’s legacy business generates revenue and operating income of approximately $12.5 billion and $4.0 billion in 2023. It remains to be seen what new model emerges in the U.S. to answer cord cutting and the death of conventional TV. The NFL’s experiment on Monday, having two MNF games compete on separate networks is one experiment.

In Canada’s monopolistic market, “TSN/RDS penetration rates have declined at a quicker pace than ESPN over the past 10 years. ESPN penetration has dropped from 81 percent of U.S. households in 2013 to 56 percent in 2022, while TSN/RDS penetration has decreased from 89% of Canadian households in 2013 to 49 percent in 2022.

In addition, BMO admits that cord cutting is a thing. “SportsNet subscribers have decreased -23 percent to 5.8 million over the same period. Subscriber and advertising revenues are 60 percent and 40 percent of total revenue, respectively. Since 2017, TSN revenues have increased 13 percent. TSN subscribers have decreased -29 percent to ~7.8 million over the same period.”

But! In the last five years, TSN and SN have increased advertising revenues by 13 percent and 15 percent respectively. The same figure for the top five Canadian non-sports channels (collectively) is six percent. Thank you legalized wagering in Ontario. So who wouldn’t want a piece of this action, especially in Canada?

The red flag in this surging equity market comes in the form of smaller Canadian NHL markets. The Senators sale for $950 suggests a healthy interest in owning, but the Sens sale was also tied into the new LeBreton Flats arena. Ownership or control of a Canadian arena means more than NHL games. It also includes revenue from concerts, rallies, monster-truck events etc.

Even with that can Andlauer produce a winner just two hours from the Montreal Canadiens market? Likewise, the Winnipeg Jets are desperately in need of a larger arena to replace the 15,321 Canada Life Centre. Having Canada’s richest man, David Thomson, as an owner is no guarantee of getting one. And should Thomson tire of being the saviour of a losing Jets hockey property, who in that market has C$1-2B lying around needed to fund the franchise properly?

Likewise, the Calgary Flames. Despite the political press conference this summer about as new agreement the arena that management promised by 2013 has still not seen a shovelful of dirt turned over. The latest gaffe was architect’s drawings for the rink being rejected by the NHL due to inadequate dressing-room space. Start again.

Should the rink not be available till 2025-26 will an evolving ownership group still be interested in shelling out the money to keep the Flames (and Stampeders, Roughnecks and Hitmen) operating in Calgary? And if they don’t, because losing sucks? While energy-rich Calgary has plenty of billionaires, few will want to risk the money needed to keep a competitive team in a small market.

Connor McDavid’s brilliance plasters over the same small-market crack in Edmonton. Yes, they have their new building, but can owner Darryl Katz fund the moves need to keep his stars and build a winner? Vancouver, owned by the Aqulini family, has a larger market base, but with Seattle Kraken just two hours away can they too write the cheques needed to create the first Stanley Cup winner since the Canucks entered the NHL in 1970.

If these Canadian markets do survive longterm it might have to be with foreign ownership. Certainly there is money to be made riding the equity train. But there also no guarantees that those carpetbagger owners might replicate the Montreal Expos and scoot to richer markets.

Sign up today for Not The Public Broadcaster newsletters. Hot takes/ cool slants on sports and current affairs. Have the latest columns delivered to your mail box. Tell your friends to join, too. Always provocative, always independent.  https://share.hsforms.com/16edbhhC3TTKg6jAaRyP7rActsj5


Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. Inexact Science: The Six Most Compelling Draft Years In NHL History, his new book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via http://brucedowbigginbooks.ca/book-personalaccount.aspx

BRUCE DOWBIGGIN Award-winning Author and Broadcaster Bruce Dowbiggin's career is unmatched in Canada for its diversity and breadth of experience . He is currently the editor and publisher of Not The Public Broadcaster website and is also a contributor to SiriusXM Canada Talks. His new book Cap In Hand was released in the fall of 2018. Bruce's career has included successful stints in television, radio and print. A two-time winner of the Gemini Award as Canada's top television sports broadcaster for his work with CBC-TV, Mr. Dowbiggin is also the best-selling author of "Money Players" (finalist for the 2004 National Business Book Award) and two new books-- Ice Storm: The Rise and Fall of the Greatest Vancouver Canucks Team Ever for Greystone Press and Grant Fuhr: Portrait of a Champion for Random House. His ground-breaking investigations into the life and times of Alan Eagleson led to his selection as the winner of the Gemini for Canada's top sportscaster in 1993 and again in 1996. This work earned him the reputation as one of Canada's top investigative journalists in any field. He was a featured columnist for the Calgary Herald (1998-2009) and the Globe & Mail (2009-2013) where his incisive style and wit on sports media and business won him many readers.

Follow Author

Bruce Dowbiggin

Word Games: Why Liberals Scolds Are Offended When No One Else Is

Published on

Note to @FOXSports announcers. Francisco Lindor was never a Cleveland Guardian. He was a Cleveland Indian until white liberals– not Indians– decided it was a racist name.

With Cleveland beating the Detroit Tigers on Saturday in Gm. 5 of the ALDS, Guardians jars throughout baseball will be overflowing. That’s because most baseball media and fans will reflexively call the team the Indians instead of the pre-fab name they adopted in 2021. Each time they have to throw a quarter in the jar.

Little wonder for the persistence, as the Indians nickname was around since 1911, allegedly honouring player Louis Soxalexis who was a big deal for a time in Cleveland baseball. Opinions vary, except that sometime after Barack Obama won the presidency in 2008 it became fashionable in liberal circles to take scalps deemed offensive. Did we say scalps? Oops. Put a quarter in the jar.

In Obama’s rush of enthusiasm for defining the entire culture as a racial struggle session pudding heads like Bob Costas decided that natives names on teams in every sport had to go. Those of a tendentious nature also insisted the use of Indian symbols on helmets or jerseys is a case of cultural appropriation. At the head of the shit list was Cleveland Indians.

Agitation begun in college culture-studies classes spread like wildfire (oops, another quarter) through the Woke media until the club relented in 2021, choosing the anodyne nickname Guardians having to do with a statue on a bridge and Bob Hope’s father. Don’t ask.

It was the same for the NFL Washington Redskins who were relentlessly shamed about their team’s nickname, even though the team’s sober indianhead logo was respectful of a native man, drawn by a native man , approved by natives councils and was a symbol of pride in much of the community. After years of resistance the team name was changed first to Washington Football Club and then to the (gack) Commanders.

There were dozens of other long-established team names that took an arrow (Oops, this is getting expensive). In Canada the apogee of political correctness was the campaign by Edmonton politicians to change the name of the CFL team away from Eskimos. Because blubber eaters, condescension etc. (Eskimos is the chosen name for American natives in Alaska.) In a move that offended everyone but city councillors the club is now called the Elks. EE, get it? In a stroke of kismet the team has been hot garbage on the field ever since.

As we wrote first in 2016: It would seem from reading media accounts that a vast movement of native Americans and Canadians is underway. Yet, what’s unique about this struggle is the almost total indifference for these virtuous pearl clutchers among the people most affected by the alleged abuse. Polling consistently demonstrates that, as tempests go, this one is predominantly hot air.

A 2004 poll showed that 90 percent of those native Americans polled did not object to the Redskins nickname. A 2016 Washington Post poll which duplicated the poll question asked in 2004, produced an identical result. In another WaPo survey of native Americans “pride” was the word most associated with the team’s allegedly hateful name.

The general public was not gripped by the Redskins debate either. As DC journalist George Will reports, “A 2013 AP-GfK poll showed that 79 percent of Americans of all ethnicities opposed changing it, and just 18 percent of ‘nonwhite football fans’ favored changing it.” National public opinion polls find that a majority of the general public support the team’s continued use of the name, ranging from 60 to 83 percent in recent years.

Those white liberal protesters who object to the nicknames are no doubt sincere about their feelings, but as crusades go this one is several demonstrators shy of the Selma march of 1964. (Which never stops progressives seeking to educate the “deplorables” in American culture.) Sure enough, Canadian native activist Douglas Cardinal thought it was time to get his name in the media again. But his belated complaint was briskly shut down by a judge.

To be sure, there is a range of native symbols caught up in this debate. The Indians name, allegedly to honor native player Louis Soxalexis who played for Cleveland in the first decade of the twentieth century, might be fairly benign. The Cleveland caricature logo, Chief Wahoo, is offensive on just about every level. 

The NHL Chicago Blackhawks name and logo, by comparison, seem to be respectful of the culture. The name was originally to honour not the native tribe itself but a branch of the U.S. military who used the nickname during WW I. In fact, natives often wear the Blackhawks logo themselves as cultural symbols. Ditto for the Braves’ name— although the fans’ war chant owes more to Hollywood than native culture. 

Because the Redskins play in the political fever swamp of Washington D.C. they have naturally received the most attention from activists and from media slavishly following the latest glittering progressive/ left object. Which allows people such as native activist Amanda Blackhorse, a Navajo, to proclaim, without facts, that “the majority of Native American people who have spoken out on this” want the name Redskins banned. And not get laughed into the Potomac. (BTW: The high school football team at Miss Blackhorse’s reservation New Mexico? The Redskins.)

Other zealots prefer a more hands-on approach to convincing natives how badly they’re served by these nicknames.  Folks such as Bob Costas are free to use their platforms to make their feelings known. Which is their right. But it doesn’t mean that they’re aided by the facts. The media have leapt in feet-first to promote the right to First Amendment rights while ignoring data.

All of which begs the question: If so many of those affected by this supposed insult don’t see it as an insult… then who is the progressive culture industry doing it for?  I’ll take your answer off-air.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

Continue Reading

Bruce Dowbiggin

Saving CBC: Do The Liberals Believe They’re Saving Themselves?

Published on

News Item: A senior government official told CBC News the government is in the final stages of drafting “major legislative and regulatory changes” to better position CBC for the future as it grapples with seismic developments in the news and broadcasting space.

Having shovelled billions into the maw of CBC for almost a decade to keep its creaky mandate going amid “seismic developments” it seems an odd decision for the Liberals to now re-define that same mandate. With less than a year left till an election (it could be a lot less) in a bureaucracy where time is measured in decades (unless it’s climate) the idea of getting anything this profound done before Pierre Poilievre gets his hands on the Corp is risible.

Poilievre has made clear his intentions to stop the billion-dollar gravy train to CBC. Clearly the rethink is a political feint to assuage its aging progressive base that remembers the good old days of Peter Gzowski and Don Harron. Sure, the model is broken, but if we call Poilievre a mini-Trump and demagogue Elon Musk often enough (and have our paid scribblers repeat the charge) can we turn this scow around in time to save our hides? Desperate times call for disparate measures.

So what is going on here? Has Team Trudeau just realized that the gig is up for the CBC’s traditional media structure? Do the threats about jailing purveyors of alternate narratives indicate they’re doubling down for their pals in big Telcos? In dumping CEO Catherine Tait have they gotten the message that global communications giants don’t give a flip about the Liberals’ protectionist plans?

Example: Netflix is pulling its financial support of programs in the Canadian film and TV sector due to the new Online Streaming Act, Trudeau’s hapless attempt to make foreigners prop up Canada’s failing  print and TV production. Out of sight, out of mind. Spotify also announced it was increasing prices in Canada— because of you-know-what.

While French-language Radio Canada might still have a cultural argument in Quebec to make for its continued existence, no such imperative faces English CBC services anymore. The private production side and the digital world are perfectly capable of finding the next Schitt’s Creek or Pottery Challenge without air cover from the feds. So the Libs survival strategy now is attack, attack, attack.

Perhaps if enough captive media slappies demonize Poilievre (“The Conservative leader’s rhetoric seems tailored for a media climate that rewards maximum drama” whines CBC) protectionist intimidation could halt the growth of internet opposition.. Likely not. As blogger Mike Benz notes, “The best way to start the story of Internet censorship is with the story of Internet freedom.”

Will pumping CBC’s tires/ banning internet critics actually stem the tide? CBC’s national news division is compromised beyond recognition. In concert with the huge private telecommunications firms they’ve also hollowed out local/ regional economies, leaving skeleton operations beholden to head offices in Toronto and Ottawa. And now that independent podcasts and sites emerging since the 1991 privatization of the the internet are filling these gaps Trudeau thinks it’s time to re-think CBC so it can finish off his antagonizers?

While the precise strategy of Trudeau’s hubris remains opaque, in the United States the issue between old media and new media is now existential. With Elon Musk coming out in favour of Donald Trump and a new coalition with RFK Jr. Hillary Clinton has raised the banner of jailing those whom she believes purvey  “disinformation and misinformation” (translation: things she disagrees with) .

In the past the Grift Queen needed only to make some phone calls to insider media to get her agenda bannered across the major press. Her acolytes would go to the Sunday Morning TV panels to spin her take on affairs. The FBI would cower. Now she’s a remnant of a toppled order. She seems to be saying, why can’t they all be like Kamala Harris and follow my orders?

But new digital media defies her by aligning with Trump. One need only look at the polls indicating that the 18-35 year olds are moving toward Trump to see the demographic peril for the Clinton/ Obama insiders. No wonder the U.S. Defence department and Homeland Security are funnelling millions to prestigious American universities to “study” what can be done about “misinformation” from critics like Trump. Spolier alert: jail time.

Their old order is dying. Even reliable squishes like Facebook’s Mark Zuckerberg are having second thoughts about Harris. This past Saturday SNL savaged Harris, Biden and Tim Walz in a skit that was unthinkable even six weeks ago. And that pillar of Democratic orthodoxy 60 Minutes broadcast a damning clip with Harris in which host Bill Whittaker asked her tough questions— which she fumbled. (CBS quickly scrambled to bury the clips.)

You’d almost think the Media Party are looking to distance themselves from a Harris train wreck. So Clinton and her shell-shocked allies want arrests and pronto. Indeed Musk confessed this week that should Kamala Harris prevail next month he will probably be in jail in six months from the new administration taking office.

One of the favourite claims of the old media looking to rough up Trump/ Poilievre is the Hitler meme. We are told that they read his book, follow his agendas and want to eliminate their racial enemies. But the more apt comparison of eras is not Germany 1933-45 but revolutionary France in the late eighteenth century.

There, dissolute snobs with a hereditary claim to being obeyed suddenly found themselves outflanked by people they hardly deigned to acknowledge let alone understand. Expecting protection from the trappings of their power they never saw the Reign of Terror till it walked up the stairs of their palaces. The guillotine ended their pleas for privilege.

It may not be that bloody in modern terms. But the last gasp of a dying elite will look a lot like Marie Antoinette clutching her pearls on the way to meet Madame Lafarge.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

Continue Reading

Trending

X