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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.

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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

Jerry Came to See The Babies. And They Walked Out On Him

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Cometh the hour, cometh the comedian. Or, you can learn a lot about a demographic by what makes them laugh.

The legacy/ lunacy media schvitzed itself over a few furious sociology majors and look-at-me drama queens walking out on Jerry Seinfeld’s commencement address at Duke University last weekend. But the significance of his admission that he was 70 was probably far more newsworthy to those now in retirement, binge-watching his eponymous TV series on one of those down-the-dial channels.

If we had a dollar for every Boomer who said, “Seinfeld is 70?” while watching the address we’d be Warren-Buffett-rich this morning. He doesn’t look like any 70 year olds we know. Fifty? Maybe. But listening to his familiar delivery, the mocking on his honorary degree costume, it was easy to believe that we, too, are much younger than our blood-thinner prescriptions say.

It also pointed out the evolution of Boomers’ comedic tastes. When they came of age in the late 1960s/ early 1970s Woody Allen best profiled as his generation’s comedic muse. With a dozen classic movies ranging from What’s New Pussycat (1965) through Play It Again Sam (1972) to Annie Hall (1977) Allen’s self-deprecating nebbish captured the romantic/ridiculous self-image of Boomers with “Some drink deeply from the river of knowledge. Others only gargle”.

The neurotic, insecure Allen then decided to become Ingmar Bergman, and Boomers— now assembling jobs, children and first spouses— moved on. But for that 12-year span the bedraggled standup comedian was the go-to with lines like “Just because you’re paranoid doesn’t mean they aren’t out to get you” and  “The only love that lasts is unrequited love.”

Woody’s pointed contemporary political references in those years were few (conflating “D’you” for “Jew” with Tony Roberts in Manhattan) and self-deflating (see Annie Hall). His most prominent political jabs were framed in absurdist material like Love And Death and Bananas. Culturally he was merciless but affectionate about his Brooklyn upbringing. In short his were perfect date movies for Boomers seeking love to advertise their pretensions.

Flash forward from Woody to Seinfeld (created with Larry David) which was anti-romantic in the extreme. The characters were sociopaths. The situations often cringeworthy. The 24-minute formula harkened back to Lucy and the Honeymooners. And while schlock like Friends trod the same ground it was Seinfeld that somehow captured the Boomer  zeitgeist. 

Why? Boomers going through middle age were too disillusioned with how life was turning out to romanticize anymore. The self-obsessed characters were people they knew from work, school and dealing with government. Smirking Bill Clinton was the face of an era. “When we did my show in the 90s, it was so easy to make fun of things. It was so easy,” Seinfeld told Amy Schumer.

Significantly, Seinfeld the Show was cultural. Or quasi-cultural. It was never about politics per se. It was about the people who thwart you in life. Whose vanity ruins your plans from school days. Who go 50 mph in the left lane. “When is Jerry going to see the baby?” It rarely challenged its fans on an emotional level. It was mostly about navigating madness.

And often about the most mundane elements of life. The address on the weekend contained The Seinfeld Doctrine of Lowered Expectations. “It’s easy to fall in love with people. I suggest falling in love with anything and everything, every chance you get. Fall in love with your coffee, your sneakers, your blue zone parking space. I’ve had a lot of fun in life falling in love with stupid, meaningless physical objects. 

“The object I love the most is the clear-barrel Bic pen — $1.29 for a box of 10. I can fall in love with a car turn signal switch that has a nice feel to it, a pizza crust that collapses with just the right amount of pressure. I have truly spent my life focusing on the smallest things imaginable, completely oblivious to all the big issues of living.”

Reaching across the generations Seinfeld delivered Dad jokes and bromides to kids who education probably cost $100 K a year. “I think it is also wonderful that you care so much about not hurting other people’s feelings in the million and one ways we all do that,” he said. Then he explained why that might be a fruitless pursuit. Not in Curb Your Enthusiasm darkness. But sobering.

That’s why it was in character for him to let the furious demonstrators depart at Duke without comment. So was appearing at Duke, the Ivy League of Tobacco Road, founded by the people who made jillions selling nicotine. And why he let them garb him like Thomas Cromwell in the absurd 16th century cape and hat so he could score few laughs.

Because laughter is his means of dealing with jerks like the outbound Hamas crowd. “What I need to tell you as a comedian: Do not lose your sense of humour. You can have no idea at this point in your life how much you are going to need it to get through. Not enough of life makes sense for you to be able to survive it without humour.”

Yes, He has been vocal lately about the effect of political correctness ruining TV comedy. Drawing flak from former friends and fans who are in the Biden re-education camps at the moment. But his annoyance at ruining an art form far outweighed any complaints about Covid and Ukraine.

As opposed to the nihilism of his former partner David, his insouciance and comic patter represent an antidote for where most of his original fans are at the moment. Woody Allen, their former idol, is now seen as a pedo and a failed nouveau vage auteur. Disillusioned with virus lies, electoral shenanigans and soaring prices, Boomers on a pension are unanchored, floating through what used to be North American society (when only women had babies).

In fact, Boomer spectators watching Seinfeld’s 17-minute speech maybe summed it up for themselves by recalling the Seinfeld mantra, “It was a show about nothing.” And they’d be right. Jerry is the man for those times.

Bruce Dowbiggin @dowbboy is the publisher 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. Now for pre-order, new from the team of Evan & Bruce Dowbiggin . Deal With It: The Trades That Stunned The NHL & Changed Hockey. From Espo to Boston in 1967 to Gretz in L.A. in 1988 to Patrick Roy leaving Montreal in 1995, the stories behind the story. Launching in paperback and Kindle on #Amazon this week. Destined to be a hockey best seller. https://www.amazon.ca/Deal-Trades-Stunned-Changed-Hockey-ebook/dp/B0D236NB35/

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Bruce Dowbiggin

Why Do The Same Few Always Get The Best Sports Scoops?

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The Toronto Maple Leafs made the “what colour is that green light?” decision to fire their head coach Sheldon Keefe last week. The removal of Keefe after five years followed a dispiriting first-round playoff series loss to a very ordinary Boston Bruins team. Coaching may or may not have been the root cause of that loss. (Keefe himself admitted “teams are waiting for the Leafs to beat themselves”.)

The real reason for the firing is 1967, and we don’t think we need add more than that.

In essence, the management of MLSE— the owner of the Maple Leafs and a lot of other sports stuff in Toronto— needed to throw a body to the baying hounds of disappointment. Also known as Leafs Nation. Newly minted CEO Keith Pelley, fresh from the PGA Tour/ LIV psychodrama, was certainly not going to pay the price.

Nor was GM Brad Treliving who has only been on the job for two seasons. The key decisions on Toronto’s lopsided salary cap were decided long before Treliving occupied his desk. That left two people in vulnerable positions. 1) Maple Leafs president Brendan Shanahan, who has been drawing an MLSE cheque for a decade. 2) Keefe.

When was the last time you saw a coach fire a team president? Precisely. Keefe joins the list of (briefly) unemployed coaches who circulate in the NHL like McKinsey consultants. Shanahan gets a lukewarm mulligan from Pelley. But after the failure of the Kyle Dubas experiment— “who needs experience?”— and now just a single playoff series win in a decade Shanny’s best-before date has arrived.

Toronto Maple Leafs president Brendan Shanahan attends a news conference in Toronto on April 14, 2014. Toronto Maple Leafs president Brendan Shanahan said Peter Horachek will remain the team’s interim head coach until the end of the season. Shanahan met the media Friday for the first time since coach Randy Carlyle was fired on Tuesday. THE CANADIAN PRESS/Chris Young

Depending on who he and Treliving enlist to coach— remember, Mike Babcock was too tough and Keefe was probably too player friendly— it had better produce instant results. Because Shanny, the pride of Mimico, is out of chances. The coach choice will also be affected by whichever player or players that management decides are superfluous to ending the Leafs’ ridiculous run of misery.

The Leafs brass’ press conference last Thursday did little to shed light on what happens after Keefe’s expulsion. Just a lot of MBA determinism on a bed of baffle gab. A crabby Steve Simmons question/rant briefly threatened the harmony of the moment, but order was restored. And the media bitching switched from the press box to social media and podcasts.

Speaking of the fourth estate, the other unmentioned aspect of this story— indeed every story in the NHL these days— is just how it was revealed to the public. When people sipped their morning Tim’s or Starbucks the (almost) coincident bulletins came down the social media pike about Keefe’s dismissal.

Predictably, Chris Johnston of Sportsnet and Daren Dreger of TSN announced the breaking news within heart beats of each other. While there had been speculation on Keefe’s fate for days, the announcement coming from the networks duo confirmed the story in the minds of the industry. That allowed everyone else drawing a cheque as a hockey journalist to pile in and swarm the dead body.

In today’s sports journalism, where social media has replaced newspapers, scoops are governed by a protocol. There are the heralds— in the NHL it’s currently Johnston and Dreger— and then there are the disseminators. The days of a rabble of reporters all scrambling to get a story bigger than who-will-play-in-tonight’s-game are gone. Today, it’s a very narrow funnel for scoops.

It’s the same in the NFL where Ian Rappaport (NFL Network) and Adam Schefter (ESPN) monopolize the tasty scoops on behalf of their employers, who also happen to be NFL rights holders. In the NBA, Brian Windhorst (ESPN) has the inside rail when it comes to the LeBron James/ Steph Curry scoops. In MLB… it’s probably Ken Rosenthal  (The Athletic) but no one cares about baseball anymore, do they?

The leagues like it this way, doling out stories to guys they can trust. None of this is criticism of Johnston or Dreger, who have deftly maneuvered themselves into the coveted “from their lips to your ears” spots. From our own experience we can remember the exhilaration of having the best source or sources on the really big stories. Like Johnston/ Dreger, we worked hard for a long time to develop those sources and only very reluctantly let anyone else horn in on our stories.

It was also our observation that this order of things journalistic suited a lot of reporters who either couldn’t get good sources or didn’t want the stress of being first on stuff. It was enough that, like the Keefe story, they’d get the goods eventually and most fans would not care who was first. So long as you had a take. So be it.

Some resentful types took potshots at our work if it upset their pals in the dressing room or the management suite. On the Stephen Ames/ Tiger Woods story in 2001, we had the late Pat Marsden tell us on air that we’d done a great job on Ames’ criticisms of Tiger. Only to hear him lambaste us— again on FAN 590— only minutes later as we listened driving home from the studio. But we digress.

Many reporters are complacent in playing the game, so long as their bosses didn’t enquire why they are getting scooped all the time by the same few rivals. With the death of daily newspapers that doesn’t happen much any longer. (Many editors today may only see stories when publication brings a libel notice.) For them a salty take is good enough.

The scoop business is also affected by the multiple roles now demanded of sports media types. In addition to their “day job” on a beat they also have to supply digital content and talk-back hits to the Mother Ship. Most also are feeding a weekly podcast, dictating time on air rather than time working the phone. There are only so many hours in a day to chase a story.

Better to play the Breaking News waiting game.

Bruce Dowbiggin @dowbboy is the publisher 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. Now for pre-order, new from the team of Evan & Bruce Dowbiggin . Deal With It: The Trades That Stunned The NHL & Changed Hockey. From Espo to Boston in 1967 to Gretz in L.A. in 1988 to Patrick Roy leaving Montreal in 1995, the stories behind the story. Launching in paperback and Kindle on #Amazon this week. Destined to be a hockey best seller. https://www.amazon.ca/Deal-Trades-Stunned-Changed-Hockey-ebook/dp/B0D236NB35/

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