Bruce Dowbiggin
Celebrity Owners– Fun, Yes, But The Equity Is Even Better
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
The Pathetic, Predictable Demise of Echo Journalism
It can be safely said that the 2024 U.S. presidential election couldn’t have gone much worse for legacy media in that country. Their biases, conceits and outright falsehoods throughout the arduous years-long slog toward Nov. 5 were exposed that night. Resulting in the simultaneous disaster (for them) of Donald Trump winning a thunderous re-election and their predictive polling being shown to be Democratic propaganda.
Only a handful of non-establishment pollsters (Rasmussen, AtlasIntel) got Trump’s electoral college and overall vote correct. Example: One poll by Ann Selzer in Iowa—a highly-rated pollster with a supposedly strong record—showed a huge swing towards Harris in the final week of the election race, putting her three points up over Trump. He ended up winning Iowa by 13.2 points (Selzer now says she’s retiring.)
Throughout, these experts seemed incapable of finding half the voter pool. By putting their thumb on the scale during debates, the representatives of the so-called Tiffany networks and newspapers signalled abdication of their professional code. Their reliance on scandal-sheet stories was particularly glaring.
Just a few lowlights: “the brouhaha over a shock comedian at a Trump rally calling Puerto Rico “a floating island of garbage”. Unhinged outgoing POTUS Biden then called GOP voters “garbage”. So Trump made an appearance as a garbage man, to the snarky disapproval of CBS News chief anchor Nora O’Donnell.
Then there was Whoopi Goldberg on The View predicting Trump will “break up interracial marriages and redistribute the white spouses: “He’s going to deport and you, put the white guy with someone else… The man is out there!” Media ran with this one, too.
Worse, disinformation and lying reached such a proportion that Team Trump turned its campaign away from the networks and legacy papers down the stretch, creating a new information pathway of podcasts and social media sites (such as Joe Rogan, Theo Von and Adin Ross) that promise to be the preferred route for future candidates looking for non-traditional voters. A few prominent media owners sought to save themselves by refusing to endorse a presidential candidate, but the resulting tantrum by their Kamala-loving staff negated the effort.
In the past, poor performances by the Media Party might be dismissed or ignored. But the cataclysmic ratings drops for CNN and MSNBC paired with collapse in sales for blue-blood rags such as the New York Times, Washington Post and L.A. Times spoke to the public’s disgust with people they’ve always trusted to play it straight.
(Now Comcast has announced it’s spinning off MSNBC and its news bundle to save their profitable businesses. Staff members in these places are now panicking. As such the new administration promises to be indifferent to the former media powers-that-be as Trump mounts radical plans to recast the U.S. government. )
As noted here the disgraceful exercise in journalism was cheered on by their compatriots here in Canada. “In the hermetically sealed media world of Canada, natives take their cues from CNN and MSNBC talking points both of which employ Canadians in highly visible roles. (Here’s expat Ali Velshi famously describing on NBC that the 2020 George Floyd riots that burned for weeks— destroying billions in damages while resulting in multipole deaths— as “generally peaceful”.)
The narratives of Russiagate, drinking bleach, “fine people” to Hunter Biden’s laptop— long ago debunked down south— are still approved wisdom in Canada’s chattering class. Especially if America’s conflagration election can be used to demonstrate the good sense and judgment of Canada’s managerial and media class.
The clincher for star-struck Canadians was the overwhelming Kamala love from the Hollywood crowd. Virtually every high-profile actor/ singer/ writer embraced the woman who was parachuted into the nomination in a coup— even as the same glitterati raved about anti-democratic Trump. From Beyoncé to Bilie Eilish to Bruce Springsteen, their support was been a winner in Canada’s fangirl/ fanboy culture.”
Talk about backing a loser. Which leaves us asking what to expect from formerly respected media in the upcoming (it will come, won’t it?) defenestration of Justin Trudeau and Jagmeet Singh, probably in spring of 2025. One Toronto Star piece might provide a clue to the bunkered approach of Canada’s globalists. “Europe is leaving Donald Trump’s America behind. Should Canada do the same? As American democracy dives into darkness, Canada is facing difficult choices.”
CPC leader Pierre Poilievre has made it abundantly clear his thoughts on the bias of media. To save billions, he is making a major overhaul— even closure of CBC (not Radio Canada)— as a campaign pledge. He’s also said he will remove the slush fund now propping up failed establishment news organizations that employ unionized workers bent of crushing the Conservatives.
His scorn is obvious after watching media’s reverential treatment of Trudeau’s fake “murdered” Rez children stunt or the silence accompanying PMJT’s sacking of his indigenous Justice minister Jodie Wilson Raybould. Lately, a deadpan Poilievre humiliated a callow CBC reporter quoting “experts” by asking her “what experts?” Her unpreparedness leaves her floundering as Poilievre calls her question another “CBC smear job”.
Perhaps the classic Poilievre humbling of a reporter occurred in 2023 in a Kelowna apple orchard when a reporter seeking to score points with his Woke colleagues saw the bushwhack rebound on him. After numerous failed attempts at belling the cat, the local reporter played his ace card.
Question: Why should Canadians trust you with their vote, given … y’know … not, not just the sort of ideological inclination in terms of taking the page out of Donald Trump’s book, but, also —
Poilievre: (incredulous) What are you talking about? What page? What page? Can you gimme a page? Gimme the page. You keep saying that … “
No page was produced and the cringeworthy interview collapsed.
Needless to say, the reporter was absolved by his water-carrying colleagues. Here was Shannon Proudfoot of the Toronto Star: “Kicking a journalist in the shins over and over then turning the exchange into a social-media flex is telling on yourself…” Venerable CBC panelist/ Star columnist Chantal Hébert echoed the pauvre p’tit take. “Agreed”.
For these press box placeholders it’s all too reminiscent of the acid-drenched style of former PM Stephen Harper, a stance that turned them to Trudeau cheerleaders in 2015. Which is to say we shouldn’t have high hopes for balance when the writ is finally dropped.
Poilievre has several more ministers (Melissa Lantsman, Garrett Genuis) skilled in exposing media imbalance, so we can expect full-blown pushback from the paid-for media from the usual suspects when Trudeau finally succumbs to reality. One drawback for the Conservatives could be the absence of national podcasters such as Rogan or Von to which they can pivot.
But make no mistake, However much Canada’s press corps denies it, the public has turned away from Mr Blackface and the politics of privilege. They’d best anticipate a rough ride ahead.
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.
Bruce Dowbiggin
CHL Vs NCAA: Finally Some Sanity For Hockey Families
In forty-years-plus of covering sports you develop hobby horses. Issues that re-appear continuously over time. In our case, one of those issues has been pro hockey’s development model and the NCAA’s draconian rules for its participants. Which was better, and why couldn’t the sides reach a more reasonable model?
In the case of hockey the NCAA’s ban on any player who played a single game in the Canadian Hockey League created a harsh dilemma for hockey prodigies in Canada and the U.S. Throw your lot in with the CHL, hoping to be drafted by the NHL, or play in a secondary league like the USHL till you were eligible for the NCAA. Prospects in the CHL’s three leagues — the OHL, QMJHL and WHL —were classified as professional by the NCAA because they get $600 a month for living expenses, losing Division I eligibility after 48 hours of training camp. The stipend isn’t considered income for personal tax purposes.”
Over the decades we’ve spoken with many parents and players trying to parse this equation. It was a heartbreaking scene when they gambled on a CHL career that gave them no life skills or education. Or the promised NCAA golden goose never appeared after playing in a lower league for prime development years.
There were tradeoffs. NCAA teams played fewer games, CHL teams played a pro-like schedule. The NCAA awarded scholarships (which could be withdrawn) while the CHL created scholarships for after a career in the league (rules that players getting NHL contracts lost those scholarships has been withdrawn). There were more contrasts.
As we wrote here in 2021, it might have stayed this way but for a tsunami created by the antitrust issue of Name Image Likeness for NCAA players who were not paid for the use of their NIL. When the U.S. Supreme Court ruled on the issue in 2015 it warned the NCAA that its shamateurism scheme had to change. That created revolution in the NCAA. Athletes now receive healthy compensation for their image in video and digital products. They can also take million-dollar compensation from sponsors and boosters.
Portals allow them to skip from team to team to find millions in compensation. One of the many changes in the new NCAA was its prohibition against CHL players. To forestall future lawsuits costing millions, it recently made hockey players eligible for the same revenues as football and basketball players. Now the NCAA has voted to open up college hockey eligibility to CHL players effective Aug. 1, 2025, paving the way for major junior players to participate in the 2025-26 men’s college hockey season.
Which, we wrote in 2022, would leave hockey’s development model vulnerable. “As one insider told us, “The CHL model should be disrupted. Archaic and abusive.” NIL won’t kill the CHL but it could strip away a significant portion of its older stars who choose guaranteed money over long bus rides and billeting with other players. It’s early days, of course, but be prepared for an NHL No. 1 draft pick being a millionaire before his name is even called in the draft.”
As we wrote in May of 2022 “A Connor McDavid could sign an NIL styled contract at 16 years old, play in the NCAA and— rich already— still be drafted No. 1 overall. Yes, college hockey has a lower profile and fewer opportunities for endorsements. Some will want the CHL’s experience. But a McDavid-type player would be a prize catch for an equipment company or a video game manufacturer. Or even as an influencer. All things currently not allowed in the CHL.”
Effectively the CHL will get all or most of the top prospects at ages 16-19. After that age prospects drafted or undrafted can migrate to the NCAA model. Whether they can sign NHL contracts upon drafting and still play in the NCAA is unclear at this moment. (“On the positive side, we will get all the top young players coming to the CHL because we’re the best development option at that age,” one WHL general manager told The Athleltic’s Scott Wheeler.
One OHL GM told the Athletic “As the trend increases with American players looking for guarantees to sign, does a CHL player turn down an opportunity to sign at the end of their 19-year-old year with the hopes that a year at 20 in NCAA as a free agent gives them a better route to the NHL?”
The permutations are endless at the moment. But, at least, players and their families have a choice between hockey and education that was forbidden in the past. Plus, they can make money via NIL to allow them to stay for an extra year of development or education. The CHL will take a hit, but most young Canadian players will still see it as the logical launching pad to the NHL.
Now, for once, families can come first on the cold, nasty climb to the top hockey’s greasy pole.
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.
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