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Replacing MLSE CEO Tim Leiweke will not be an easy task

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

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.

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.

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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.

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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.

What gave MLSE its renewed shine in the first place was the zeal Mr. Leiweke has displayed for the products MLSE puts on the ice, court and field. "In terms of the whole world of sport entertainment CEOs, I mean, he is the top, or at the top of the talent pool," Prof. O'Reilly said.

SPORTS FRANCHISES

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TORONTO MAPLE LEAFS (NHL) (since 1931)

Their last championship was in 1967, but the Maple Leafs remain the only franchise within the sports stable to have won a league title, and were valued at $1.15-billion (U.S.) as of 2013 – tops among NHL teams. The club is now led by president Brendan Shanahan, a Hall of Fame player recently hired away from the NHL head office.

TORONTO RAPTORS (NBA) (since 1998)

Despite winning two division titles, the Raptors have advanced past the first round of the playoffs only once in six tries. But the team, valued 18th among NBA franchises at $520-million, has seen its profile rise since sought-after general manager Masai Ujiri took the reins and superstar recording artist Drake came on board as a global brand ambassador.

TORONTO FC (MLS) (since 2007)

The team has yet to qualify for post-season play in seven seasons since joining the league, and attendance among its loyal fan base has dropped from a high of 20,453 in 2010 to a low of 18,131 in 2013. But the roster has undergone a multimillion-dollar overhaul that included the signing of stars Jermain Defoe and Michael Bradley, and the franchise was valued at $121-million (U.S.) last year.

TORONTO MARLIES (AHL) (since 2005)

The farm team to the Leafs moved to Toronto from St. John's for the 2005-2006 season, in part to control travel costs. The team, which had been named the Maple Leafs and traced its lineage to the New Brunswick Hawks, changed its moniker and has continued to provide the NHL Maple Leafs with a steady stream of call-ups.

FACILITIES MLSE OWNS OR IS INVESTED IN AND/OR OPERATES

AIR CANADA CENTRE (Maple Leafs & Raptors) (since 1999)

The successor rink to Maple Leaf Gardens cost $175-million to build, and is now home to multiple franchises and is a bustling concert arena. It hosts lacrosse and arena football as well as hockey and basketball, and has recently begun drawing large crowds even outside the building after a 9-by-15-metre video screen was installed on the outer wall.

BMO FIELD (TFC) (since 2007)

Sitting at Exhibition Place, on the site of the old Exhibition Stadium, BMO Field hosts FIFA international soccer events when not playing home to Toronto FC. After an earlier expansion to add seating, it is now expected to undergo a major renovation to include, among other things, a roof over most permanent seats.

RICOH COLISEUM (Marlies) (since 1922)

Situated on the Canadian National Exhibition grounds, the stadium has been the home of the Toronto Marlies since 2005. It also plays host to the Royal Canadian Horse Show during the Royal Agricultural Winter Fair and during the Second World War it was used as a training base for the Royal Canadian Air Force. A $38-million renovation in 2003 expanded capacity to 10,000.

MASTERCARD CENTRE (Maple Leafs & Marlies practice facility) (since 2009)

The practice facility for Toronto's main hockey clubs also operates as a community ice arena. The rink was built by the Lakeshore Lions Club at a cost of $43-million and was the subject of controversy in 2011 when it required a bailout from the City of Toronto after facing a series of cost overruns.

KIA TRAINING GROUND (TFC practice facility & home of TFC Academy) (since 2012)

MLSE and the City of Toronto invested $21-million to build this TFC practice facility, which also houses the Major League Soccer club's youth and development system TFC Academy. The sprawling Downsview Park complex replaced Lamport Stadium as the TFC Academy's home when it opened in 2012.

MAPLE LEAF SQUARE (since 2010)

MLSE is a part owner of this residential and commercial development across the street from the Air Canada Centre. Led by developer Cadillac Fairview Corp. along with Lanterra Developments, the complex includes condos, the restaurants e11even and Real Sports Bar & Grill, and the Real Sports Apparel store. Launched in 2005, the project was later valued at $500-million.

SPECIALTY CHANNELS

LEAFS TV, NBA TV CANADA, GOL TV

Subscription television channels dedicated to game broadcast and news and analysis on hockey, basketball and soccer, respectively. A 2011 valuation submitted to the CRTC put MLSE's interest in these stations at $51.1-million.

Christine Dobby, James Bradshaw, John Marchesan; figures from Forbes.com, the CRTC and MLSE.

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