Second Team In Toronto? Don’t Hold Your Breath

Great piece by David Shoalts in today’s Globe and Mail. The tongues are a wagging everywhere this morning that meetings have taken place between a group interested in building a second arena in Vaughn for a 2nd NHL team and the NHL and the NHLPA. Shoalts has obviously done a ton of digging to get this information, as no one else had it. I don’t think the question coming out of this is would a second team work. In my humble opinion it absolutely would. The questions to me are:

1. Where
2. Who
3. When

Shoalts made one small gaff in his otherwise great artricle:

“Vaughan may be that much farther removed from the Air Canada Centre, home to the Maple Leafs in the downtown core, to make a second team acceptable to Maple Leaf Sports and Entertainment, owner of the Leafs”

Nothing in the GTA or golden horsehoe will make this acceptable to Maple Leaf Sports and Entertainment. When the Washington Nationals moved back to DC the concessions it took over a year of court threatened negotiations to get the Baltimore Orioles to concede, it was and remains fairly costly:

” In exchange for allowing the deal to go thorough, MLB gave Angelos and the Orioles the television rights to the Nationals. MASN is now the only television network with a contract with two MLB franchises. While might not sound like much of concession, the New York Yankees-owned YES network is estimated by Goldman Sachs – which is a part owner of the network – to be worth three times the original price of $850 million, nearly $3 billion. And, by some estimates, the Boston Red Sox are worth $200 million more because of their ownership of the New England Sports Network. MLB Commissioner Bud Selig gave the Orioles 90 percent control over the regional television market.According to figures released by MLB, the Orioles must pay the Nationals a $20 million broadcast fee for this season and next. The fee then jumps to $25 million in 2008 and continues to rise based on the market value of the television contract. Eventually, the Nationals will own 33 percent of the network.”

Now, put some cash in MLS&E’s pockets and give them a huge stake in the tv revenue of the 2nd team and you may be on the right road. The buds apparently put in over $20m in television revenue from TSN alone, (over $35 million in tv, radio and merchandise in 2007) that doesn’t count sportsnet or Leafs TV, which i know is one hand paying the other, but revenue nonetheless. This isn’t MLB numbers, but significant still. MLSE has television properties and would benefit from controlling a second team’s television rights.

Where should the team play? From my perspective Hamilton would be ideal except that you would then have to appease Buffalo too. I think Vaughn isn’t north enough in my mind.

The who is interesting too. I am told Jim Jim Balsillie, of RIM fame is not involved in this at all. There are lots of people out there with a lot of money(less of it, these days). I would imagine the group would have to carry some serious clout to get an audience with Bill Daily and Paul Kelley. The shareholders in MLS&E (regardless of what Bill Watters thinks of them- another useless rant yesterday by the way) have made serious money over the last couple of years and others know this and want a piece of it.

When, is the most interesting question. Jim Balsillie is laughing somewhere. He has to be. Teams, and note the S in the word, as in multiple, are drowning out there. What would have cost him a fortune with Nashville only a few years back wouldn’t cost nearly as much now. The books are so bad in Phoenix that potentially interested parties are laughing at the league. Bettman is clearly in survival mode. He needs to wait this out, and try to keep all the balls in the air while the recession runs it’s course. That may not be easy. The last thing he will want to do in this environment is piss off one of the teams that is carrying a ton of the weight of those dying. If the NHL announced a new team for Toronto it would take at minimum 12-24 months of discussions with MLS&E. If it went to the courts, double that estimate. Then they need to put a shovel in the ground. There aren’t too many empty arenas around to house this team in the short run either. Carolina played in a temporary home before, as did the Sharks. This team I guess could play in Hamilton for a spell. The ACC would be an option, as likely as peace in the middle east.

So this could happen, if the stars were perfectly aligned. I doubt it will happen for a long, long time, irrespective of what the talking heads say.

Damien has already piped in with his 2 cents:

“The fact the NHL is at least willing to discuss the issue opens a new chapter in this story, and is likely connected to the fact that several U.S.-based franchises, notably Phoenix, are in severe financial distress. New York Islanders owner Charles Wang has said his team is losing upwards of $20 million a season and has threatened to move the team if he can’t get clearance for a new arena, while the Tampa Bay Lightning are rumoured to be in the red to the tune of $25 million per season just a year after being sold to Hollywood producer Oren Koules and former NHL player Len Barrie.”

Shoalts piece is here
Cox is here
figures from Nationals/Orioles is here

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Daniel
Daniel
April 23, 2009 11:12 am

Both may not happen, but how crazy would it be if in 5 years Toronto (or Hamilton) gets a second NHL team and an NFL team?

Toronto is a huge market, with a lot of big business, so I see no reason why they couldn’t be supported here. But still…including the Argos and FC that’s 7 teams! If all franchises were sound that would be fun!

CD
CD
April 23, 2009 1:55 pm

I would think that the MLSE concern might not be entirely the impact of a new team on the Leafs…but instead its negative implications to the Raptors. No one really ever talks about this but think how a second hockey team might suck a lot of people away from a mediocre raptors team. Especially if the second hockey team was a team with lots of young talent with substantial upside. A competitive team, and a more reasonably priced ticket could seriously impact MLSE bottom line with respect to the Raps.

Daniel
Daniel
April 23, 2009 2:51 pm

That’s a good point – I would really hope that’s not the case though. I like the idea of Toronto having lots of sporting options..maybe even becoming a good sports town.

I think the Raptors would be ok. They don’t have the biggest fan base – but the base they do have is pretty passionate (though I think a lot of people who read this blog don’t believe that). They get great attendance. I think they do a good job of tapping into Toronto’s huge minority population that aren’t brought up with that ingrained Canadian hockey culture. It’s interesting to see how different the crowd is at a Raptor game compared to a Leaf game.

furcifer
April 24, 2009 10:27 am

I don’t want another Toronto Sports Team. I’m still trying to get over the fact that they awarded a team to the cesspool that is Ottawa.

furcifer
April 24, 2009 10:30 am

Also we have enough cities which have inferiority complexes(?) towards Toronto that we don’t need another one. What kind of city defines it’s motto based on its proximity to a bigger and better one?

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