Less than two months after Rowe took the job, the Toronto Star reported that Rogers had bid $1.3 billion for Teachers’ 66% stake in MLSE, which, besides the Leafs and the Raptors, owns the Toronto FC soccer club, the 19,800-seat Air Canada Centre and three specialty TV channels—Leafs TV, NBA TV Canada and the all-soccer GOL TV Canada.
The relationship between Rogers and Teachers’ dates back a long time, as does Rogers’ rumoured interest in MLSE. Sources say there was no truth to the report that the communications giant had made a $1.3-billion bid. But it was sniffing around. And soon, so were many other prospective buyers, who called Teachers’ to see if they could get in on the action.
Since it seemed clear that the pension plan might be able to fetch a good price for its stake, Rowe decided to test the waters, hiring Morgan Stanley to run an auction. If the bids didn’t live up to expectations, she decided, Teachers’ would hold onto its marquee possession.
There are, broadly speaking, three types of owners in the sporting world. The traditional ones are the jock sniffers—the rich guys who become owners so they can fly on their teams’ private planes and pop champagne in the locker room. But Teachers’ was at the front end of a shift that saw more franchises bought by institutional owners that are more concerned with making money than partying with athletes. The third group is where BCE and Rogers come in: media conglomerates and other interests whose businesses are directly bolstered by owning a team.
While Rowe started to explore her options, Toronto fans were debating whether a new deep-pocketed owner would be able to help the Leafs score. Rowe still can’t get over criticism that Teachers’ was not interested in the team’s performance, which is most notable for being Stanley Cup-free since Confederation (or, to be fair, its centennial). The notion that Teachers’ was not willing to spend on talent is so ingrained among some fans that one popular Leafs’ blog is called .
“Did we not want them to win?” Rowe says. “That I find to be a very mind-boggling question. If a team makes it to the playoffs, it’s a far more valuable team,” she says. “Your fans are happier, your arenas are being filled more, your merchandise is being sold more, your food and beverages are being consumed more.” As if to prove the mind-boggling theory, however, the final season of Teachers’ ownership was, as of press time, as abysmal as ever for the Leafs, with fans successfully chanting for coach Ron Wilson’s head.
Stanley Cup or no, Teachers’ and the other part-owners of MLSE are widely recognized for having built a very profitable company. “I think that putting the Raptors and the Leafs together certainly was a coup, and it worked out very well, and making sure the arena [the ACC]was built where it is instead of having two arenas certainly worked out very well,” says Claude Lamoureux. MLSE also brought Major League Soccer to Toronto, developed a condo and retail complex near the ACC, and, crucially, created specialty TV channels.
It was those channels and the right to broadcast games that especially attracted the likes of BCE and Rogers. In the not-so-distant future, it seems, we will all be watching TV on our cellphones. One of the best ways to make money from that trend, as George Cope sees it, will be to own the right to broadcast live contests—from sports games to beauty pageants—that people don’t want to PVR.
As the prospective bidders were assembling their strategies, one of Rowe’s first major decisions in the auction process was to buy Toronto-Dominion Bank’s 13.46% stake in MLSE. That move meant that the only other owner left was Larry Tanenbaum, a member of Toronto’s monied elite with broad ties across the sporting world.
Being the chairman of MLSE has been a large part of Tanenbaum’s life, and of his image, since 2003. He began in the pro sports game by trying to bring an NBA team to Toronto in the early 1990s, and invested in a predecessor to MLSE in 1996. The chairman’s post meant he finally was living the dream—he became a governor of the NBA, the NHL and Major League Soccer.