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Tim Leiweke, president and CEO of Maple Leaf Sports and Entertainment, takes a call outside Toronto's Air Canada Centre on Wednesday. Mr. Leiweke is set to leave the sports empire no later than June, 30, 2015. (Chris Young)
Tim Leiweke, president and CEO of Maple Leaf Sports and Entertainment, takes a call outside Toronto's Air Canada Centre on Wednesday. Mr. Leiweke is set to leave the sports empire no later than June, 30, 2015. (Chris Young)

Replacing MLSE CEO Tim Leiweke will not be an easy task Add to ...

As Maple Leaf Sports and Entertainment begins looking for a new chief executive, the search could turn on a key question: Can its owners agree on what they want in a leader?

The announcement on Thursday that CEO Tim Leiweke is planning to step down no later than June 30, 2015, roughly two years into a five-year term, leaves the Toronto-based sports empire facing another shift in direction. Mr. Leiweke arrived in 2013 with great fanfare from Los Angeles, where he ran the Anschutz Entertainment Group, which owns the Los Angeles Kings hockey team, the LA. Galaxy soccer club, part of the Lakers basketball team and an entertainment complex.

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Finding a replacement with the same profile and experience won’t be easy. MLSE, which owns the Toronto Maple Leafs, Raptors and TFC soccer team, will have to find someone who can maintain the momentum Mr. Leiweke has built around its sports franchises, but who is diplomatic enough to navigate a boardroom where fierce corporate rivals, BCE Inc. and Rogers Communications Inc., sit around the same table.

The unusual board room is the result of a change in ownership at MLSE, which was struck in December, 2011, and closed in August, 2012. Rogers and BCE each acquired half of a 75 per cent stake in the company from the Ontario Teachers’ Pension Plan, for a combined $1.07-billion, and they oversee it as a joint venture. At the same time, Larry Tanenbaum, a Toronto businessman, increased his stake to 25 per cent from 20.5 per cent. The sale left MLSE with an eight-person board, consisting of three representatives each from Rogers and BCE, Mr. Tanenbaum and Toronto lawyer Dale Lastman, who has no ownership stake. BCE owns 15 per cent of The Globe and Mail.

“I think, as the CEO, you spend more time managing up than you do down,” said Brian Cooper, president of Toronto-based sports marketer S&E Sponsorship Group Inc. “You have [BCE chief executive] George Cope on one side, Larry Tanenbaum in the middle and [Rogers CEO] Guy Laurence on the other. They’re all powerful guys and they all have their own set of values and egos – it’s a very tricky thing.”

Mr. Leiweke said his decision to not stick around longer stemmed from unspecified “new opportunities on the horizon” and a desire to try his hand in a more entrepreneurial role, and not from any sort of friction. Inside MLSE, some contend Mr. Leiweke’s commitment to the job was always in the two-year range, and the news was not a shock. The leadership group he assembled remains relatively intact.

Now the crucial task for MLSE’s ownership will be deciding what they want from the next CEO, and how much leeway that person will have to chart his or her own course, while avoiding signs of discord.

“As long as Bell and Rogers, albeit competitors, stay on the same page in terms of what they want the teams to do, and succeed, then they should be fine,” said Norm O’Reilly, a professor of sports business and chair of the Department of Sports administration at Ohio University.

That may be easier said than done. After striking the MLSE ownership deal, the CEOs of BCE and Rogers made it clear that winning franchises were a priority. Successful teams would also bolster both companies’ broadcast and distribution businesses by securing viewership and subscriptions among cable and wireless customers.

“It’s all about winning, it’s all about championships and there’s no confusion from that perspective we have a common interest,” said Nadir Mohamed, then CEO of Rogers, after the deal was first announced.

Since then, however, Rogers’s has spent $5.2-billion to snatch national NHL broadcast rights in Canada for the next 12 years, cutting BCE out in the process. And that may have tilted the landscape inside MLSE. Mr. Cooper said the rights deal likely strained relations at the board level.

Still, Mr. Cooper does not believe the ownership structure should stop MLSE from recruiting a new star .

“Anyone would want this job. This is a sexy job and they’ll say they can handle this board, whoever it is,” he said.

In the interim, Prof. O’Reilly expects Mr. Leiweke could be on “a tighter leash” , while in the short term, his decision not to commit to MLSE could dent the company’s image. “When you have a high-profile, exciting leader who by most accounts is making positive change, from the organization perspective you assume there’s some disappointment, or some negative branding,” he said.

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