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MLSE: Too big to win? Add to ...

"When the team is not winning I hurt on the business side and I hurt as a fan," Peddie says. "I don't like sitting through a game when we're getting blown out, I don't like sitting through games in April that mean nothing."

Why would he like it?

Each losing April means no home playoff dates which would generate about $3-million each in revenue, most of it profit. Winning generally translates to richer broadcasting deals, more lucrative luxury-suite contracts and more merchandise sales - and outside of cashing in on the playoffs, MLSE doesn't miss many opportunities. Consider that the Zamboni slush from the final game at Maple Leaf Gardens was put into clear plastic pucks and sold for $50 each.

"This notion MLSE doesn't want to win is bull," says Brian Burke, the president and general manager of the Leafs. Burke is 22 months into a six-year, $19.5-million (U.S.) contract, awarded with the expectation that he'll deliver a Stanley Cup to Toronto as he did with the Anaheim Ducks in 2007.

"They gave me complete support and independence and have given me the resources to fix it," Burke says. "If we can't turn this thing around, you can blame me. It's the best-run company I've ever worked for. I'm proud to work for MLSE, I'm proud to work for Richard Peddie."

Fans have no choice but to take Burke's word for it, but the problems on the ice, floor and field seem to drown out his defiance.

What price losing? Have Greater Toronto Area sports fans finally had enough?

There are small cracks in MLSE's financial facade: For the first time since the Air Canada Centre opened in 1998, it's had to advertise aggressively to sell luxury boxes to a corporate clientele finding it harder to justify the expense. Ticket revenue has largely flat-lined as even MLSE finds it difficult to keep raising prices that already are the NHL's most expensive and among the priciest in the NBA. Even Toronto FC, known for its rabid following, has had some empty seats this season, as fans have balked at paying premium prices for a team that struggles to put the ball in the net.

Off the field, the company continues to perform as a growth play.

"Obviously [the owners]still think there is some upside, that there's some value to be generated otherwise [they]wouldn't be holding it," says Erol Uzumeri, who was the primary representative for Teachers on the MLSE board for three years before leaving the pension fund and MLSE to co-found Searchlight Capital Partners, a private-equity firm that has raised $250-million since May.

The most telling recent example is Maple Leaf Square, the office tower and condominium project slated for completion this fall and five years in the making. It was a risky, $500-million project and seeing it through is one of the reasons Peddie, 63, has not yet taken up residence in his recently built retreat in Amherstburg, Ont., on the shores of Lake Erie.

Real Sports - there is a sports-clothing boutique of the same name adjacent to the bar - is the cherry on top of the sundae, and if the fake Stanley Cup offends the sensibilities of some, it doesn't seem to be a problem for the clientele that have flocked there since June, pushing revenues 25 per cent above budget. The building cost for the 25,000-square-foot venue was about $10-million according to a source close to MLSE, and revenue potential ranges to $1-million a month.

The 1,000 seats available represent an instant 5-per-cent increase in capacity for the ACC on game nights, when fans who can't get into the arena take the next best thing, a booth at Real Sports.

The irony is that now, with condos built, a sports bar opened and plans for a gourmet restaurant under way (called Eleven, for the 11 points on the Maple Leafs logo), the most obvious source of new revenues for the company may be deep playoff runs. Who knows? They may occur just in time for MLSE to launch its own sports network (working title: Real Sports) for which the company has secured a licence.

"Imagine a channel that had Leafs, Raptors, TFC and Marlies games on it," Peddie muses. "Imagine what you could charge for that."

The question remains, as obvious as the fake Stanley Cup in the bar: MLSE can build things, sure, but can it build a winner?

"I'm not sure there is anyone any better than us [at business]" Peddie says. "But we're not winning and that's a big part of the equation."

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