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Bruce Dowbiggin

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

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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.

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Bruce Dowbiggin

Taylor Made: Time ‘s 2023 Person With A Uterus Is A Cultural Swiftie

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It’s a sitcom worthy of Norman Lear. Young woman aspires to be a country singer. Winds up instead— oh, the laffs— becoming a cultural icon for other young women with her confessional songs (“Look What You Made Me Do“), sold-out concerts and distinctive fashion choices.

She has a lunkhead football boyfriend with heart of gold (he pushes Covid vaccines). She flies in to watch him play his games. She writes songs like “We Are Never Ever Getting Back Together“. And she’s a Victim! “(The fight with Kim Kardashian) took me down psychologically to a place I’ve never been before. I moved to a foreign country. I didn’t leave a rental house for a year. I was afraid to get on phone calls. I pushed away most people in my life, because I didn’t trust anyone anymore. I went down really, really hard.”

Naturally, Time Magazine votes her 2023 Person The Year. Taylor Swift was (pun alert) tailor-made for the legendary TV producer of All In The Family, Maude and The Jeffersons. Just as Swift defined 2023, Lear defined white urban liberal sensitivities in the late 1960s and onward. His cutting portrait of redneck Archie Bunker was the template for today’s lecture-in-30-minutes TV culture.

The Jeffersons was the epitome of Great Society pandering for white 1960s progressives. Maude was Bea Arthur chewing on the scenery in aid of first-generation feminism, when burning a bra was the funniest thing anyone had ever heard of.

So it’s kismet that the news of Lear’s death and Swift being anointed as Time’s 2023 Person With A Uterus align on the same day. For the crumbling legacy media the empowerment of Swift encapsulates all that they stand for in their opposition to the boor Donald Trump. Waif-ish, cute, fashion-trendsetting— Swift rules the world of their favourite voting demos. “You go, girl!”

The death of Lear at 101, meanwhile, is a nostalgic reminder of the days when three major TV networks and a handful of NYC-based newspapers and magazines determined the culture. When Walter Cronkite declared Viet Nam over on CBS, Lyndon Johnson had no FOX News channel to defend his policies.

(Which inadvertently opened the door for Richard Nixon. Meanwhile, the heavy-handed Bunker parody politicized many rednecks, leading to Ronald Reagan’s accession to POTUS in 1980. But we digress.)

The complacency of the Clever Culture— in the person of Lear protegé Rob Reiner—has been stultifying and self-reinforcing. Eventually most of those captured by it fell wordlessly into the coma of non-binary, cisgendered, trans-accepting, Hamas-has-a-point acceptance that Trump threatens.

It was the same in Canada where for decades CBC dictated the progressive sensibilities to a nation that not only accepted the dogma but paid for it. The appearance this week of their magenta-haired, Brooklyn-based president and CEO perfectly captured that bubble in the 2020s.

Even as Catherine Tait announced that the failing broadcaster was punting ten percent of its workforce, she sniffed when asked by her own National anchor Adrienne Arsenault if Tait and her fellow executives would forgo bonuses as others hit the sidewalk. No comment, replied Tait.

Back in the day when Don Cherry was a thing at @CBC a haughty snob like Tait could brag about the CBC’s inclusivity to justify the Corporation’s billion-dollar grants. “See! We have redneck losers on our channel! We’re diversified.” We wrote about this loss-leader funding strategy in our 2000 book The Meaning Of Puck.

But CBC lost the blue-collar demo when they canned Cherry in 2019 for comments about “you people”. The triumphalism of Cherry’s firing was like the Munchkins in Wizard of Oz celebrating the nasty death of The Wicked Witch. Freed from the bombastic Cherry the Corp was now free to lecture its viewers without interruption.

But that’s not quite how it worked out. Now when Tait and her Woke sensibilities show up it’s just a Brooklyn toff with a $5.4 million home pretending to understand Canada with her hand out. There’s no ornery guy left espousing Remembrance Day poppies and fighting in hockey to prove her Canadian bonafides.

It shows in the TV ratings for The National where audiences of two million are now in the low hundred-thousands (on a good night). Abandoned by traditional viewers uncomfortable with the NDP sensibilities of the news and current affairs departments, CBC has furiously sought to ensnare the younger demographics in its social media operation, (funded by starving its traditional services).

“@jkay Even in my left wing neighborhood, it’s hard to find anybody who watches the CBC. To the extent they still defend it, it’s the CBC they remember from 25 yrs ago, when Peter Gzowski was still around, instead of Carol Off hectoring us about how we’re all racists & garbage feminists.”

Good luck with that, especially if Pierre Poilievre wins a predicted crushing majority and acts on his stated goal of defenestrating the home of announcers who think the Truckers Convoy was a Putin plot. Again, Tait was at her most tone-deaf, calling Poilievre out publicly for his plans for the Corp.

She then doubled down on her gaffe, telling journalist Paul Wells— who’d been hand-selected for a media exclusive—“I understand that my remarks may have caused trouble for some of the journalists who have struggled to get access to this leader and others in the party, and I regret that, of course… Do I regret calling out the wrong of defunding the public broadcaster campaign? Absolutely not.”

She then reinforced her commitment  to producing more of the hectoring, ESG/ Woke crap that no one wants already. While Tait seems oblivious to losing her sinecure as the commuter CEO, most of the employees remaining after this latest cut will be updating their resumés and escape tapes.

No one expects that Poilievre will completely gut the Corp. There’s talk of a buffet of current services— local radio, weather, children’s programming and especially social media— surviving.

But the days when the Corp— like Norman Lear— could force its politics on an inert population are done. Maybe Taylor Swift can write a sing about the CBC’s plight. Wait, she already did: “Is It Over Now?“.

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

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Bruce Dowbiggin

Rahm Gone: We Should LIV So Long

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Rahm, Rahm, Rahm, you’ve been gone so long, you’ve been gone, gone, gone so long. — Chilliwack (sorta’)

Anyone who says they understand what’s happening in golf world doesn’t understand the golf world. To understate the case, these are not the best of times for the Tiger Woods-dominated PGA Tour. First, Tiger is hardly playing, and he’s still the biggest asset they’ve got. Second, Greg Norman’s LIV Tour is hemorrhaging money but still has a fortune to lure Jon Rahm. Third, NBC punted announcer Paul Azinger for not putting talcum on the backsides of players before he criticized them.

Fourth? Well, consider the past nine months:

After swearing a blood oath to players that he would never make any deals with the renegade LIV golf operation, commissioner Jay Monahan then cut his biggest loyalist, Rory McIlroy, off at the knees in June by announcing he’d secretly concluded a merger deal with the Saudi Arabian Investment Fund that underwrites LIV. (A deal that’s yet to be finally consummated.)

The pampered U.S. darlings of Tiger’s Tour were then eviscerated in September’s Ryder Cup in Italy, an event defined by Patrick Cantlay refusing to wear a team hat. Depending on whom you consult it either tore apart the U.S. dressing room or was no big whoop. (Cantlay lost his Goldman Sachs sponsorship soon after)

McIlroy— who almost came to blows with caddie Joe LaCava during the Ryder Cup— later announced that he was removing himself from his role as a dominant voice on the Tour Players Council. He claimed fatigue and frustration over dividing his concentration from golf itself. Jordan Spieth was announced as a short-term, very reluctant replacement.

That was followed by news that Monahan was out as commissioner just as soon as he completes the negotiations with LIV for the anticipated merger. A likely replacement will need the approval of the oft-injured Woods whose TV star power still dominates the Tour’s television ratings.

However Tiger’s game-but-lame performance last week on one good leg at his own event The Hero Challenge meant that his long domination of the Tour is probably dead and buried. As much as GolfChannel tries to put a smiley face on Woods playing once a month, there is no one to fill the celebrity gap that he leaves.

Which brings us to the worst news for the Tiger Tour: Spaniard Jon Rahm, arguably the No.1 player of the Tour, is taking his act to the dreaded LIV Tour— perhaps as soon as this week. After fervently committing to the Tour earlier this year, Rahm has apparently tired of the Woods/ McIroy cabal that dominates the Tour. Stories have circulated how he’s been frozen out of the south Florida cliques that dominate the Tour.

If he can get some adjustments made to LIV’s format he’ll be paid a reported a staggering $600 M to join his countryman Sergio Garcia’s team at LIV. Remember that Rahm doesn’t need money. He’s got tons. So this move would solely be about pride and reputation.

Perennial grouchy Golfchannel analyst Brandel Chamblee finds it distasteful to do business with the sheiks. “If it were offered to me by the mafia, or in this case at the behest of MBS/Saudis, knowing the money was derived from corruption and used for the benefit of some very bad people, the decision would be very simple. There is a difference between value and values.”

Not that he will disappear into the discotheque world of Phil Mickelson and Greg Norman. Rahm could still qualify for all the Tour majors next year while wearing short pants the rest of the time. The absence of the mercurial Spaniard at the rest of the Tour’s top-level events will leave a huge gap on a charisma-challenged tour. Current No. 1 Scottie Scheffler is about as exciting as The Weather Channel.

While LIV is still an unwatched work in progress, powered by the vast wealth of SA, a Rahm signing shows that the sheiks have no signs of  backing off their challenge to the comfy traditionalists of the Tour. As we see in Gaza, memories go back a long way in the Middle East, and slights aren’t forgotten easily.

Then came the news that the PGA and the R&A in Britain have finally announced that the juicing of golf balls will be stopped. Going forward balls used in competition will have five percent less distance, reducing the threat the supersonic balls pose to the traditional golf courses on Tour, which bombers have brought to their knees with driver/ wedge strategies.

This satisfies Woods, the Tour’s upper echelon and some golf-course architects. For the rest of humanity the decision to remove the most visceral thrill in the sport— knocking the daylights out of your driver—is less positive. Once again, Chamblee is leading the snark (although we agree with him this time). “I appreciate the governing bodies and what they mean to the game, but on the roll back issue they are not only out of touch with the game they govern, but the people that play it. It is a very small number of people that are in favour of a roll back…

“But take the fun out of the game ( FYI, long drives are fun), and demand falls. And, there is absolutely no reason to lengthen golf courses to challenge the best players. Lengthening golf courses is a knee jerk reaction that only makes the “problem” of distance gains worse.”

One small ray of sunshine for Canadians. The Tour has finally gotten the Canadian Open away from its slot the week before the U.S. Open. This year’s week-long celebration ion Nick Taylor’s 72-foot putt will go in the last week of May. Hopefully this will bring a better field. So we got that going for us.

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

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